Sunday, October 30, 2011
President Obama has just enacted his latest raid on the American treasury. It's designed to benefit the president by pandering to the student vote at the expense of the American taxpayer.
President Obama has announced that he intends to issue an executive order for the federal government to reduce student loan payments to 10 % of a borrower's income above the poverty line, and for total debt forgiveness after 20 years, regardless of the outstanding balance.
"We're just going to do this by ourselves. We can't wait for Congress, we're just going to act," said Education Secretary Arne Duncan on CNN.
And of course, the president is putting this out there at universities all over the country.
To see how insidious this really is, let's take a look at how this works in the real world. Let's say Jane Jones borrows $150,000 to obtain a liberal arts undergraduate degree at your typical university. Her repayment is based on what she earns, if anything. Let's say Jane gets a job as a community organizer at $30,000 per year. Factor out the $10,800 for a single person under the federal poverty guidelines and her total annual repayment is $1,600 per year, or only $133.33 per month.
Twenty years later, she's only repaid $32,000 on her loan. And the balance? it doesn't 'dissolve' as the Obama Administration's rhetoric suggests. It gets picked up by the rest of us and gets added to the national debt.
Yes, fellow citizens. If some of the people the president and his minions feel are more deserving than you are want to go to academia for a 4-year funfest and pick up an overpriced diploma in ethnic or womyn's studies, you and your children are footing the bill.
The tenured radicals installed in the university system working to destroy America one mind at a time always had their six-figure lifestyles subsidized by the rest of us, but the bill just increased a hundred fold.
This is by no means small change. Americans currently owe over $1 trillion in college debt, and some 1.6 million have subsidized student loans, which Obama had the federal government take over in 2009.
Now that it's essentially going to be a free ride, that $1 trillion is going to look like pocket money.
College costs have increased nearly 600 percent since 1980, far ahead of inflation and price increases on cars, homes, and medical care. But for some strange reason, no one is suggesting cutting tuition, limiting tenure, creating alternative programs like apprenticeships, eliminating programs of dubious value or other steps that could make college more affordable. Instead, this president is inflating yet another bubble, since more money directed at the same commodity means schools can increase their prices, based on the 'bigger fool' theory that worked so well when it came to real estate. Remember how people bought homes at inflated prices they couldn't afford because they were always going to appreciate and they could always flip them for a profit in a few months? Remember how realtors always told people that now was the time to buy, before prices went up again?
President Obama is doing exactly the same thing here. He's deliberately setting another time bomb for the economy and creating another megabucks unfunded entitlement for the sole purpose of trying to slither back into office for another four years.When it explodes, he'll be long gone and away from the scene of the crime.
At least with real estate, the private sector was involved, or at least it was until the Obama Administration essentially took over the mortgage industry. Here, the debt bomb is already going to be absorbed via executive order without benefit of any congressional oversight, and it will increase to toxic levels as universities hyper-inflate their already obscene costs.
Ironically, the entire thing is a Ponzi scheme in reverse. The same students crying 'whoo hoo!' as they listen to President Hope n' Change haven't figured out that the small amount their loan payments are going to be lowered is going to be eclipsed by the increasing amount of taxes they'll have to pay to cover what the federal government eats in debt forgiveness, the increased cost of a college degree for their children, and the diminished employment opportunities as more and more economic activity is swallowed up by yet another unfunded federal mandate.
The idea of a sitting president deliberately doing something like this via executive order simply to benefit his own election prospects at the expense of the nation is something new here. But that's what we have.
Along with all the other episodes of this abysmally failed presidency, this latest horror makes it clear that not only does this president not deserve re-election, but that he was unworthy of his office to begin with.
As the ancient Greeks said, character is destiny.