Sunday, November 20, 2011
Something for nothing
This past week the OWS in Cleveland moved some of their people out of downtown. They moved to the yard of a foreclosed house where the women was to be evicted. They got her another month living in a home that she isn't paying on any longer. There are sympathies to various degrees with OWS movement and the idea that the regs are skewed right now towards the investment bankers and Wall street. However the protesters always seem to come back to the idea of something for nothing, Forgive our student loans, living in housing we don't pay for, etc. Even the idea of taxing the rich more is just wanting someone else to pick-up the tab.
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I think student loans should be as bankruptable as any other debt. i'm not sure why they are excluded.
ReplyDeleteD & S,
ReplyDeleteWith that thought (bankruptable student loans) in mind there should be and would be no more student loans. It would be nothing less than theft. Kids racking up students loans to pay for four years of pizza and partying paid for by taxes from people who went to work (plumbers, machinists, etc) instead of college. All decent people should be offended by the very notion of forgiving loans of any type.
Outside of medical bankruptcy should be almost impossible to file for, and very rare in medical cases. Bankruptcy raise costs for everyone thus increasing the financial strain on the poor and everyone else.
ReplyDeletemy carefully thought out comment just got eaten... i do agree that college is not a necessity and think loans for that purpose are too large and are sometimes misused.
ReplyDeletei believe that debt should be harder to incur and that companies that allow folks to rack up huge unpayable student loans, mortgages and credit card debt should pay a price for unwise lending practices. i believe bankruptcies should be allowed but should not be easy to get, i believe student loan debt should not receive special protection and i think lenders bear some responsibility.
"Kids racking up students loans to pay for four years of pizza and partying paid for by taxes from people who went to work (plumbers, machinists, etc) instead of college. All decent people should be offended by the very notion of forgiving loans of any type."
ReplyDeleteSo, let's talk about "Robin." Robin works for me. She's in her mid-forties. Robin graduated high-school and immediately went to work back in the late 80s. Somewhere in there, she got in a few college credits, but for the most part, she just worked. And worked. And worked. Restaurants, Walmart, wherever she could find a place. After a few years, she had her mother (whose health was never great) move in with her, as all the other siblings were out of state. She remained single, worked, took care of her mom. About 8 years ago, she got a job at my agency. Not a great, high-paying job, but a decent job, decent pay. She liked doing Human Services, was good at it, so she enrolled in online college courses. Continued working, continued taking care of her mother, and got a Bachelor's Degree in Human Services Management. Unfortunately, around the time she got that degree, the economy started tanking. In the past couple of years, there have been MASSIVE cuts to agencies like mine, so there aren't a whole lot of jobs available that pay more than what Robin already makes. She took out a lot of student loans to cover the cost of college, and has been working hard to pay them back. A couple of months ago, Robin's mother had some more health issues come up, some serious stuff. Due to income, she doesn't qualify for a whole lot of assistance (Robin doesn't make much, but apparently just enough not to get any help here). So Robin has had to use up all her vacation and sick time to take care of her mom, and is part way through her allotted FMLA time (which is of course entirely unpaid). She never had a lot of money-- now she is broke, with very little income (I let her work from home when she can, but it's no more than 10 hours per week usually), all her old bills, and some student loans on top of it. There's really no end in sight-- things will continue to be difficult, she will be more and more buried in debt.
It's easy and fun and gives one a nice self-righteous tingle to complain about kids eating pizza and partying and leaving us to pay off their debts, but that's kind of divorced from reality.
You can't get nearly the same self-righteous tingle bitching about an extremely hard-working, self-sacrificing forty-something trying to take care of her mother and better herself, falling behind in times of crisis.
I don't know that "all decent people" should be offended by forgiving loans of any type. Sounds kind of... I don't know... unBiblical...
For a second example, how about me, me, me!
ReplyDeleteI won't cry or tell a sob story.
But...
I did eat pizza in college. Truly. I confess. I'm a vegan now, but back in the day, I ate pizza. While in college.
And if you dig deep enough, you will find that I went to some parties. Even hosted a couple. (Not many while I was actually enrolled, because I spent three out of four years at a conservative evangelical college that didn't allow such things; in that other year though, party, party, party.)
I didn't ask anyone at all to pay for my partying or for my pizzas (okay, sometimes I asked my roommate to pay for the pizza). I paid for that myself. Along with rent. Groceries. I worked two jobs in the summers. I cleaned toilets in the dorms to have enough money to be able to occasionally go to the diner with friends. I worked hard in high school, I worked hard in college, I worked hard after college.
I graduated with a lot of loans. When I first got out, I had $375 per month in loans, and was making $6.90 an hour. I fell behind often.
Was it irresponsible to accept those loans? Sure. I suppose. But the reality isn't so neat and clean. When you're a 17 year old kid (or 18, or 19) standing in the financial aid office, and the worker there is saying you don't have enough money to stay, BUT that if you sign this stack of papers, everything will be taken care of... well, I think you kind of trust that. After all, they know what they're talking about. After all, they do this all the time. After all, everyone at every stage has told you that this degree is going to get you a great job, that you've got potential. After all, you've never had to handle decisions that involve more than a few dollars at a time.
Not blaming those college employees. I'm sure they believe it too. But it's easy to make decisions as a teenager-- especially when all the educated adults around you are supporting it-- that you wouldn't make with a little more experience.
I've never asked anyone to pick up the tab for school. Now that I have a decent job, I pay that big bill every month, though I did often fall behind and get those threatening letters in younger years.
Just saying that it's not so black and white. You're trivializing the realities that people deal with.
Again, fun to get that tingle by bitching about all those spoiled-rotten freeloaders. And there are some of those types out there. But let's not paint with too broad a brush.
Jockeystreet, it's not a matter of not feeling for someone deep in debt it's a matter doing the right thing. When someone borrows money the lender should have reasonable assurance that most loans will be repaid.
ReplyDeleteUniversities should give a little more guidance on career opportunities as they pertain to given courses. Another idea would be to limit loans to courses with the greatest opportunity for employment.
"When someone borrows money the lender should have reasonable assurance that most loans will be repaid."
ReplyDeleteand so they should be much more responsible in their lending.
student loans should not be protected from bankruptcy. they should be just as bankruptable as any other loan, no matter what the money was used for. students have to eat, after all.
bob, are you arguing against bankruptcies for anything other than in very rare medical cases? no second chances at all? financial institutions get their blood from the turnip no matter how irresponsible their lending practices are?
Divers and Sundry Irresponsible lending practices are tough but it still amounts to theft if someone borrows and doesn't repay. Fraud on the other hand is a whole other matter but even there bankruptcy shouldn't be the answer. Fraud should be handled by civil suits and criminal actions.
ReplyDeletei wholeheartedly disagree that it is theft if someone borrows money in good faith and then later finds themselves unable to pay. and i believe banks' lending practices can be risky and unwise without being outright frauduleent. i can't imagine a world that allows lending and debt without allowing bankruptcy. would you bring back debtors' prisons?
ReplyDeleteI believe a better option than bankruptcy would be a hiatus on payments for a specified time period.
ReplyDeleteI don't guess we'll agree on this but to me it doesn't matter what a persons intentions are if they acquire something without paying for it that's wrong. Theft might not be the best word but what would you call it.
i would call it poor judgment and bad planning on the part of both parties to the loan.
ReplyDeletedon't get me wrong, i don't think lenders should finance my preferred lifestyle on the off-chance i might decide to pay them back someday. i'm a firm believer in paying back loans, but when loans can in no way be paid back, what are you gonna do? sometimes there's no money and no prospects of money. what would you do in cases like that? bankruptcy serves a purpose.
My problem is with the way bankruptcy is structured. Corporate bankruptcies allow for mismanagement and no consequences. I can't tell you how many times companies have order work done by the company I work for and then went out of business without paying. Now this is not a small matter these orders will total 50-100,000 dollars with little chance of selling the material elsewhere.
ReplyDeletePersonal loans aren't much better, people scam the system to keep as much as they can. I worked with a guy who went bankrupt now this guy was making 40 grand a year. I asked him what he was going to lose in the bankruptcy and he said nothing. You are supposed to inventory your possessions when you file and he did, he just didn't mention his thousands of dollars worth of hunting gear and anything else they might make him sell.
You see I think a majority of bankruptcy filers are not the truly destitute but those who don't want to change there lifestyles.