This New Bubble Is Even Bigger Than The Subprime Fiasco - Politics Forum.org | PoFo

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#14789551
In the UK at least the real estate bubble is far from fully crashed we will hopefully see that this year or if not within a few years. On the other hand I don't think the UK's student loan bubble is nearly as severe as that of the US.

Fiat currency which comes into circulation by being issued by banks as loans with no practical limit as to the total quantity of money that may be issued this way except that the loans must be repaid in order to balance the creation of money with the destruction of money. In this way the issuer is eager to lend (because he does so at virtually no risk to himself since it is not real money) but in general the borrower is not keen to borrow (because he must repay it with real effort). So that should be fine except sometimes the borrowers get the idea that for certain things borrowing is like a sure fire leveraged investment and they cannot lose... Then both lender and borrower get real silly to the point of irresponsibility how much money they will jointly create through making the loan. And of course those certain things (real estate and university tuition as classic examples) when subjected to a torrent of newly minted loan money go up in price as a consequence which makes the loans expensive for subsequent loan takers requiring them to borrow even more but now with the illusionary persception that the thing they are buying with this leverage is getting more valuable (thought it isn't) and thus you get a bubble.
#14789554
This bubble is different in that it was deliberately created by conservative legislators - it is basically a one-off profit extraction scam. Once the bubble deflates, the state university systems will be destroyed; that is a feature, not a bug. As part of the ongoing privatization project, state schools were revamped to become money-making profit centers. Large and risky loans to students and their parents were promoted with zeal. After the crash, state universities will face massive and nationwide cutbacks. An entire industry will be destroyed.

The insane idea that everybody has to go to college is an ingenious feature of the privatization scam. High School counselors funnel unsuspecting rubes into the system, and even help them fill out the loan paperwork. The kiddoes and their parents aren't really understanding that that these are not no-recourse loans. They will be paid back out of your tax returns and pensions. Not only will the students be impoverished, but their parents will be as well.

BTW, your friend and mine Betsy DeVos was one of the designers and major profiteers from this system.
#14789647
quetzalcoatl wrote:This bubble is different in that it was deliberately created by conservative legislators - it is basically a one-off profit extraction scam. Once the bubble deflates, the state university systems will be destroyed; that is a feature, not a bug. As part of the ongoing privatization project, state schools were revamped to become money-making profit centers. Large and risky loans to students and their parents were promoted with zeal. After the crash, state universities will face massive and nationwide cutbacks. An entire industry will be destroyed.

The insane idea that everybody has to go to college is an ingenious feature of the privatization scam. High School counselors funnel unsuspecting rubes into the system, and even help them fill out the loan paperwork. The kiddoes and their parents aren't really understanding that that these are not no-recourse loans. They will be paid back out of your tax returns and pensions. Not only will the students be impoverished, but their parents will be as well.

BTW, your friend and mine Betsy DeVos was one of the designers and major profiteers from this system.

It sounds like a conspiracy theory but there may be a nugget of truth in it. Mandatory secular free at the point of use education provided by wholly owned by the state enterprises itself was originally a conspiracy concocted by Britain's modernist industrialists aimed at the Church which hitherto was the default educator of the poor. See education isn't necessarily just a business providing skill transfer it can also be a means of indoctrination. Providing super cheap education was the primary means for the Church to cultivate and to keep their cult membership going and with it funds and political support. To break the church you have to break their market share on education but undercutting them is hardly viable as they can play a very long game and collect the returns decades later than at the point of cost because they aren't just passing on skills but a cult membership from which they can extract donations and support from the recipient of their education for the rest of their lives. No industrialist can really work on such long time scales using their own resources, that and competing in this manner will hardly be decisive enough. But with the aid of the state and its massive force anything is possible and a hard reset in favour of secularism becomes feasible. Hence the Education Acts of the 19th century that birthed modern secular state education.

The religious institutions know what they are doing with education and they know that their congregations will continue to hemorrhage without regaining the lion's share of the education market which is currently forcefully denied to them by the secular favouring state so of course they will try to concoct schemes to wreck it. A debt bubble is a wickedly ingenious method though.

Betsy Devos is Christian as was Tony Blair (he is a member of Opus Dei a very secretive and influential catholic agency) who was the primary agent of the introduction of student loans in the UK.

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