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Comment by wildmusings | Hacker News Reader

The problem is that these measures leave out most people's most valuable asset, their future earning potential. There's nothing wrong with having a serviceable mortgage or car payment. I think you misinterpreted me.

Yes, people do profit from that debt. Good! Because otherwise you wouldn't be able to turn some of that future earning potential into buying power today. This ancient innovation, the loan, allows us to do that. If the lender didn't stand to profit from interest, he wouldn't lend. It's a triumph of capitalism.

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I did not misinterpret you, I understand fully what you are trying to say. I disagree with you. You and I are in the fortunate positions of being able to service debt and even avoid it entirely. Many people are not. Lenders have the ability to take advantage of social and financial systems that require debt, and through the application of their profits can alter those systems so that more debt is required to survive. In my mind, that is capitalism's failure. Spending your future earning potential is fine, buy a boat or a house bigger than you need if you want to, but if you need to go into debt for employment, education, or health care as many in the U.S. do now then something is very wrong. Furthermore, servicing that debt can keep people stuck in debt or poverty and reducing their spending potential, which is destructive to the economy. All of these things can be fixed fairly cheaply but the solutions are being suppressed for the profit of a few.

I don't get your logic, that it's okay to go into debt for a boat but not your education, an investment in your future earning potential.

The problem with education loans is that they're not real loans. The government gives them distortionary financing that inflates tuition. Everytime the government raises the max loan amount, tuitions rise to match it. The college bureaucracies grow to match revenue. It's the same that happens with any bureaucracy that gets unearned money.

Everyone should pay the full price of their college education, either up front or in the future. That's the best way to keep college affordable.

Free markets work, why is there this presumption against them?

I think the other commenter may be suggesting that it's wrong for life's bare essentials to require large amounts of debt, but beyond essentials a well-informed person should have debt as an option.

I've agreed with your general direction in this thread, but here you've tied yourself in a knot. If the un-"real loans" you cite weren't available, far fewer people would be willing to attend college, prices would fall, and far less would be loaned and spent on education. In other words, without the distortions introduced by lobbyists and politicians, all this wonderful education debt wouldn't exist. So we have indeed identified a case in which lenders "through the application of their profits can alter those systems so that more debt is required to survive."

Germany has fully free college education and labor fully involved in management. It is a good example of capitalism that benefits the middle class rather than the US system that increasingly feels rigged against the common man. It is great that a smart poor man can become a billionaire- but what about the rest.

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