Stop Paying On Your Student Loans!!

It is time to make student loans dischargeable again.

There are several arguments that can be made for the ability to discharge student debt in a bankruptcy filing, but I believe that the strongest argument has to do with the economy in general. We are looking at an economy in which “full employment,” the rate of unemployment which most economists would consider to be normal, will go from four or five percent to around ten percent. We are looking at an economy in which credit is harder and harder to get. We are looking at minimum wage planet. How am I supposed to pay off $100,000 in student debt with a job that only pays $9 per hour?

The abundant availability of credit has kept this retail-based economy that we call “America” from feeling like a third-world economy has dried up. All that this huge expansion of credit has done is postpone the inevitable and the inevitable is occurring right before our very eyes. It has served as sort of a pillow between the harsh reality of globalization and what was the American Dream. Almost overnight, the purchasing power of the American consumer has been significantly limited and yet the banks continue to act as if we can easily pay on loans that were made before the collapse with the same inflation-adjusted stagnant wages that we’ve had since 1975.

It is time to stop the madness and live within our means. It is time for the former students who are currently paying on their loans to stop making payments. If I do it all by myself, I’ll continue to be in default, but if we all do it, then that’s a revolution.

Some may say, “Well, if you do that, then your credit will be damaged,” to which I say, “Who needs credit?”

Houses can be rented.

A huge investment in public transportation, including high-speed rail, and the designing of walkable communities can significantly reduce the need for the automobile.

All levels of education, from pre-K to PhD should be publicly-financed. And when the government begins to address Obama’s third policy initiative of education, we should all stand up and demand it.

With housing, transportation and education taken care of, what does the consumer need credit for? Do you REALLY need those shiny trinkets and fashionable clothes down at the mall? Then, do what others who are not able to get the credit you have do…save your money for it!

There is currently around $600 billion in outstanding student loans and right now, they have us enslaved by having us pay for something that should be considered a human right…the right to better oneself. But when we act together, that $600 billion becomes our weapon, not theirs.

Stop paying on your student loans until the government changes the bankruptcy laws…even if it means bringing the whole economy down with us.

Reinforcement has arrived!!!

GO ANN MINCH!!!

Thanks to this woman, for having the guts to get on YouTube and take the Bank of America on!

We don't have to take this. The banks make this money out of thin air. They don't have what they lend. It's time to get that changed. It's time to live within our means.

They're FINALLY getting it!!!

I think they're finally beginning to see the connection between the employee and the consumer....

WASHINGTON – Household income in the U.S. is essentially stagnant, raising doubts about whether consumers already hurt by job losses can sustain an economic recovery.

A Poor Man's Debit Card

Recently, I purchased a debit card from Walgreen's with the hope of not having to open a bank account. I wanted something I could put my money on that would be universally-accepted as a means of exchange.

I was amazed at how much it cost to buy a piece of plastic with embossed numbers--about ten dollars. But then I thought, "Well they gotta pay their employees and carry out the system effectively." So I didn't think too much more of that.

Then they want to hit you with a monthy "maintenance" fee. I guess they figure they need to account for all the work that their computers do when they're flashing numbers between one another? But the most unforgiving of these fees is the fee I have to pay EACH AND EVERY TIME I put money on the card. There's no redeeming economic value that is captured with such a fee besides out and out greed.

What I propose is the creation of a "poor man's card." This card would be a store of value, universally-accepted and free of any unnecessary fees. It would be issued by a nonprofit organization that would work in conjunction with government and retail entities, ensuring compliance with all pertinent laws and contracting fee agreements with the major merchants. Smaller businesses would certainly be welcome to join, but in the initial implementation, a goal of securing such contracts with the major merchants would be advisable in terms of marketing the card and getting the consuming public familar with the card.

The banks would not like this because it would take a lot of their low-income customers away, but low-income people have only a need for a store of value and universality.

Keeping my eye on the employment picture

The reason I haven't been posting is because they've won, or rather they THINK they have.

The bottom line is, "Can you produce enough jobs for the masses to sustain this lie?"

Everyone's thinking that the job losses are slowing. I'm not convinced. No new lending has occurred.

We'll see when next month's jobs report comes out. But we can also get some indication in the weekly report for initial claims for unemployment insurance set to come out this coming Thursday.

And if you think lending is going to save the day, think again

Check this graph out over at Econbrowser. It really puts to rest any possibility of a substantial increase in lending any time soon.

The Big Picture

Every once in a while, the powers that be manage to get people to take their eyes off the ball....including people like me. That's when, in my rainy day walk to the library today, I retrace the logical steps I made in the conclusions that I have...outloud...with my lips moving...making the driverbys think I'm crazy.

First, the housing market became saturated. They had finally reached a point where they couldn't sell anymore houses.

When word got out that they couldn't sell any more houses, banks couldn't package any more mortgages to investors.

But by then, investors didn't want the loans because the homebuyers weren't paying on the loans anyway. They were merely paying the interest.

When investors didn't invest, banks cut back on all kinds of credit, not just for homes.

Well, why did we need so much credit in the first place? Wasn't it because of stagnant wages caused by global competition? Wasn't it due to the fact that there was nothing that we could do that couldn't be done by someone else on the planet for cheaper, better and faster?

So, when the credit crunch happened at a time when we were experiencing stagnant wages, what is the only possible result?

Weak demand.

A very substantial portion of the economy was based on debt and when that credit dried up, the current price structure has no basis.

Obama and the Federal Reserve are trying to make up for that difference between wages and reality with stimulus packages and increasing the money supply. True, federal spending would normally have an effect on the economy in terms of inflation, but the banks are hoarding more than the amount that the government is spending. So they cancel each other out and the economy continues to fall towards its real value--real wages minus the credit. The hope is that the federal spending will have a snowball effect on the economy. This may be the hope driving the recent stock market rally.

More currently, however, there appears to be an increase in the price of oil brought on by a weaker dollar, like it did last year. The weaker dollar appears to be as a result of federal deficit spending. But wasn't mighty oil brought down last sumer by ....weak demand? What makes us think that demand has increased? Has there been an increase in wages? No. Has there been any substantial new lending? No. Demand has not changed.

I don't expect the oil rally to go on much longer....even in the face of deficits. The new deficit spending is not the independent variable in all of this. Weak demand isn't the independent variable. The credit crunch isn't the independent variable. What's the problem? Stagnant wages.

Either we sit down with other countries and tell them that they're not going to be able to sell their products in our country unless they have similar wages or we must accept a lower standard of living. That's the bottom line.