Sendo
31st August 2008, 12:19
Sorry if this is the wrong forum....
I've been reading a lot on finance and banking lately, documentary "Money as Debt" and reading stuff from guys like Michael Hudson.
Given the host of bubbles in the USA economy lately, especially in the things that don't really produce anything (like houses) I' can't help but feel one bubble might be left. The student loan bubble.
Given, not everyone has ran up $90,000 plus...but a lot of students have debts that are really up there and college tuitions are still (thank you lobbyists and conservatives) going up at alarming rates. The job market is shit, there is almost nothing productive left anymore, and the best jobs are just parasitical jobs on what is a below zero-sum economy (thanks to money policies, profits from finance, externalization of waste, sucking of resources, bad worker productivity from low wages, job outsourcing, war machine, etc). When I get back to NA I'll be doing (ugh) one more year of school (public this time) to get qualified for teaching...but what does that mean for me? More debt or more piling of debt's interest b/c I lose my current income (saving about $900 / month)?
I also think of all the people who have useless pieces of toilet paper we call bachelor's degrees. They've become the new bare minimum like the high school diploma. We worked hard to get our degrees, we know a good deal of stuff, but now what? We don't stand out enough for the good, middle-income jobs or jobs that can pay enough to get out of debt. What do we do then....continue the higher education rat race with the grueling, soul-sucking process of getting a PhD?
So we have a large chunk of a generation spending 6 years plus at school, eventually working for depressed wages (given post-1973 stagnation and current inflation). If even people don't default, is it possible that the banks are again, "banking" on revenue that won't come as nicely as expected? The economy is collectively taking out loans and paying loans with more loans on an IOU on fiat currency which doesn't exist. B/c of "fractional reserve" a bank with $100 can loan out $1000!!!!! Worse yet that $1000 loan can be deposited in another bank and that bank can loan out $100 and so on......So as if it isn't bad enough that banks are getting rewarded for taking "a risk" on money which isn't just no theirs, but not even in existence, we also have the profit motive and the wonderful pattern of selling mortgages and loans and basing revenue forecasts on it, etc.
What does everyone think, will this be the next crisis? A bunch of bachelor and graduate degree-holders unable to pay back monstrous loans? Admittedly the fact that this disaster in higher education is limited to just the USA.
I've been reading a lot on finance and banking lately, documentary "Money as Debt" and reading stuff from guys like Michael Hudson.
Given the host of bubbles in the USA economy lately, especially in the things that don't really produce anything (like houses) I' can't help but feel one bubble might be left. The student loan bubble.
Given, not everyone has ran up $90,000 plus...but a lot of students have debts that are really up there and college tuitions are still (thank you lobbyists and conservatives) going up at alarming rates. The job market is shit, there is almost nothing productive left anymore, and the best jobs are just parasitical jobs on what is a below zero-sum economy (thanks to money policies, profits from finance, externalization of waste, sucking of resources, bad worker productivity from low wages, job outsourcing, war machine, etc). When I get back to NA I'll be doing (ugh) one more year of school (public this time) to get qualified for teaching...but what does that mean for me? More debt or more piling of debt's interest b/c I lose my current income (saving about $900 / month)?
I also think of all the people who have useless pieces of toilet paper we call bachelor's degrees. They've become the new bare minimum like the high school diploma. We worked hard to get our degrees, we know a good deal of stuff, but now what? We don't stand out enough for the good, middle-income jobs or jobs that can pay enough to get out of debt. What do we do then....continue the higher education rat race with the grueling, soul-sucking process of getting a PhD?
So we have a large chunk of a generation spending 6 years plus at school, eventually working for depressed wages (given post-1973 stagnation and current inflation). If even people don't default, is it possible that the banks are again, "banking" on revenue that won't come as nicely as expected? The economy is collectively taking out loans and paying loans with more loans on an IOU on fiat currency which doesn't exist. B/c of "fractional reserve" a bank with $100 can loan out $1000!!!!! Worse yet that $1000 loan can be deposited in another bank and that bank can loan out $100 and so on......So as if it isn't bad enough that banks are getting rewarded for taking "a risk" on money which isn't just no theirs, but not even in existence, we also have the profit motive and the wonderful pattern of selling mortgages and loans and basing revenue forecasts on it, etc.
What does everyone think, will this be the next crisis? A bunch of bachelor and graduate degree-holders unable to pay back monstrous loans? Admittedly the fact that this disaster in higher education is limited to just the USA.