Government-Pumped Student Loan Bubble Sets Up Next Financial Crisis

By Stefan Gleason – Re-Blogged From Silver Phoenix

Presidential candidates Bernie Sanders and Elizabeth Warren are promising as much as $1.6 trillion in student debt forgiveness for millions of borrowers. Critics smell a cynical campaign ploy to try to buy the youth vote.

How is it either realistic or fair to declare an entire category of debt to be assumed by taxpayers?

Regardless, pie-in-the-sky proposals to cancel student debt shed light on a very down-to-earth problem for not only college students and recent graduates – but also for the economy and financial markets.

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Think College is Expensive Now – Wait Until its Free

By The Common Constitutionalist – Re-Blogged From iPatriot

There is a well known saying which most of us have heard. It goes: “You think it’s expensive now. Wait until it’s free.”

We heard it from those darned conservatives and fiscal hawks prior to the passage of ObamaCare, and the left claimed we were crying wolf. We said: “you think health insurance is expensive now – wait until it’s free.” And the left laughed and called us fearmongers.

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Missing Paperwork May Erase $5 Billion in Student Loan Debt

By F McGuire – Re-Blogged From Newsmax

Missing paperwork reportedly may ultimately erase $5 billion dollars of debt for loans that tens of thousands of former students took out over a decade ago.

National Collegiate Student Loan Trusts — a 15-trust company that purchases private student loan debt — reportedly lost the paperwork documenting these loans’ chains of ownership, according to cases brought forward in Pennsylvania and Delaware, the New York Times reported.

The shoddy record-keeping means that if the trust tries to come after students who default on them, they may see the entire debt written off. Judges have dismissed dozens of lawsuits against borrowers who defaulted on student loans from private creditors, the Times reported.

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Why Inflation Is Unlikely To Return

By Rick Ackerman – Re-Blogged From http://www.Silver-Phoenix500.com

Is it possible that wage inflation is re-emerging in the US after a 35-year hiatus? That’s what the experts seem to believe, but there are good reasons to think they will be wrong. Consider the substantial pay increase that minimum-wage workers received in many cities and states where this issue was on the ballot in November. In theory, they will have more money to spend, and this will push the prices of goods and services higher.  In practice, because their employers, particularly those in the fast food business and brick-and-mortar retail, are in a last-ditch fight for survival, it is far more likely that a vast number of low-wage jobs will be eliminated. Even now, we are seeing workers who received raises in 2017 ask their employers to reduce their hours so that they can continue to qualify for food stamps and Obamacaid.

This is the reality of the minimum wage world, and arbitrarily boosting hourly pay to $15/hour will only make things worse for employers and employees.  At best, the economic result will be a push with the broad benefits of higher wages offset by a reduction in entry-level and low-paying jobs. In any event, the day is surely coming when McDonald’s will be able to operate a busy franchise with just two or three employees behind the counter. Amazon is already making similar strides in the grocery-store business. And Uber, having already made taxicab medallions worthless in many cities, could someday displace half the taxi drivers in America with driverless fleets like the one they are testing in Pittsburgh.

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Next Big Shoe To Drop…Student Loans

By Jeffrey Lewis – Re-Blogged From Silver Coin Investor

More than 40 million young Americans carry federal and private student loan debt – amounting to over $1 trillion. Defaults are on the rise and the issue has grown to become a nasty wealth transfer mechanism, as well as sad example of the failure of finance in general.

This week, President Obama announced a new initiative framed as a way of addressing the issue. Sadly, it is far from the mark, and just one more indication that monetary masters are the real puppeteers.

Many have pointed out that the student loan debt bubble could be the next subprime crisis.

Perhaps so, but it is potentially much worse, acting as an anvil when considered in the context of other consumer debt like car loans and credit cards.

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A Simple Solution Ends The Problem Of Student Debt

By Sol Palha – Re-Blogged From http://www.Gold-Eagle.com

The real issue is that there are college students that don’t want to work…but want to go to the best colleges money can buy. Moreover, the parents are encouraging this. What happened to the day you went to the college you could afford, and you worked to pay for all of it or, at least, helped your parents.  The problem lies with the parents and the kids – i.e. the parents are encouraging this asinine behaviour.  Today’s generation believe that they are entitled to the best of the best without having to work for it.   College Graduates that are drowning in debt, but still refuse to give up on luxuries is a perfect example of this principle in action. Instead of tightening their belts, they continue to add to the debt…and then cry wolf when everything starts to fall apart.

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