Except debt can be exactly due to some random accident like getting hit by a car while crossing the street and you don't have the insurance to pay for the medical bills.
I'm not saying that this is true for all of the OWS debts: probably not even the majority. I'm just saying that it's not as easy as "it's your fault you're in debt".
That's why we have bankruptcy laws.
From what I heard at the time, the big hobby horse for the OWS people was student debt, which can't be forgiven in bankruptcy. And that kind of debt is entirely optional.
That's why we have bankruptcy laws.
It was widely claimed by advocates of BAPCPA that its
passage would reduce losses to creditors such as credit
card companies, and that those creditors would then pass
on the savings to other borrowers in the form of lower
interest rates. These claims turned out to be false.
After BAPCPA passed, although credit card company
losses decreased, prices charged to customers
increased, and credit card company profits soared.
And that kind of debt is entirely optional.
That's a self-refuting argument. If your degree was really the ticket to a "vibrant middle class" job you'd be able to pay off your student debt.
The reality is not all degrees are created equal, and people should think a little bit before they go $200k into debt for a degree that's going lead to a $40k job. Granted, 18 year olds aren't very good at this kind of reasoning, but that's what parents are for.
On top of that, for a lot of fields a degree from a public university is just as good as one from an Ivy. Nobody is entitled to a pricy private college education. Either you go on family money or you think very carefully about how those loans are going to get repaid.
http://www.motherjones.com/politics/2011/09/gi-bill-for-prof...
"Last winter, the Department of Veterans Affairs tasked its newly hired blogger, a cantankerous Iraq vet named Alex Horton, with investigating the website GIBill.com, one of many official-looking links that come up when you Google terms like "GI Bill schools." With names like ArmedForcesEDU.com and UseYourGIBill.us, these sites purport to inform military veterans how to best use their education benefits. In reality, Horton found, they're run by marketing firms hired by for-profit colleges to extol the virtues of high-priced online or evening courses. He concluded that GIBill.com "serves little purpose other than to funnel student veterans and convince them their options for education are limited to their advertisers."
http://www.motherjones.com/media/2012/08/explosive-growth-pr...
"The for-profit higher education industry was the target of a bruising report issued last week. Based on a two-year effort, the report detailed high rates of loan default, aggressive recruiting, higher than average tuition, low retention rates, and little job placement assistance. It was spearheaded by Sen. Tom Harkin, D-Iowa, a longtime critic of the industry. (ProPublica has written a number of pieces looking more closely at the explosive growth sector, including questionable recruiting and marketing.)"
And finally -
http://www.motherjones.com/politics/2009/11/university-phoen...
"After federal regulators accused the University of Phoenix of systematic enrollment abuses in 2004, the school's parent company paid out nearly $10 million to resolve the allegations.
Phoenix allegedly had broken the law by tying recruiters' pay to enrollment numbers, U.S. Department of Education investigators found, creating pressure to sign up unqualified students.
In the years since, Phoenix cemented its stature as the nation's largest for-profit school and the single biggest recipient of federal student aid. But some of the school's recruiters have continued to use high-pressure, deceptive tactics, according to a dozen current and former students and two former recruiters who spoke to ProPublica and Marketplace as part of a joint investigation."
The difference is nobody goes into $200k debt studying at the University of Phoenix, whereas people who go to lower tier Ivies on student loans and get less marketable degrees have literally sold themselves into debt slavery.
And talking about parents isn't helpful. Parents are the ones watching the State of the Union address where the President talks about higher education and competing with China and then go out in the town and talk to the other parents about where their children are going to college and what their children are doing with their degrees. Thinking that only 18-year-olds can be fooled into saddling themselves with excessive debt is nonsense.
Yes.
>And those people who sold themselves into debt slavery, by going to an extremely good school, may actually still hold jobs that will allow them to repay their loans eventually.
Well then, there's no problem, is there?
>Thinking that only 18-year-olds can be fooled into saddling themselves with excessive debt is nonsense.
At some point people have to think for themselves.
That's a self-refuting argument. If your degree was really the ticket to a "vibrant middle class" job you'd be able to pay off your student debt.
You just failed at basic logic.
Saying that jobs of type X require a degree IS NOT saying that getting a degree guarantees that you will get a job of type X. As an example, a law degree is required to become a lawyer. But only something like 70% of people graduating with law degrees will pass the bar, and be put on a track to a job where they can reasonably expect to pay back their debts.
I also see that you are happy to blame the victim. Yet many victims are not to blame. Let me take a real example, my wife. She got an MD. She went into residency. She got injured, had to take time off then leave residency. She is in another residency now. She still does not make enough to contribute towards her debts, I've been doing it instead.
She did nothing wrong. Yes, the degree was expensive, but an MD is generally a worthwhile investment. Yes, she got injured. But that was not her fault. There are no guarantees in life. Bad luck will happen to a certain fraction of people. It happened to her.
Now you have a lot to say about planning. Well back when she took on that debt, bankruptcy could discharge it. It was not until after she had the MD that the rules changed on her. Thanks to me, she's not in trouble. But when she took on the debt, the bank agreed to one set of risks, and then Congress changed the terms of the contract out from under her later. In what world is it fair that you sign one thing, and then because the right politicians got bribed, you're bound to a different thing?
No, but he was talking about the majority of jobs. I understand people get unlucky. That's life. But there's a huge disconnect between what the population of college students is paying for degrees and what the job market is paying for labor. This isn't a question of some small percentage of people getting unlucky. It's a fundamental overestimation of the value of what they're buying.
>I also see that you are happy to blame the victim.
People who make dumb decisions are not victims. Like I said, not everyone is in that position because they made a dumb decision. But most of them are.
You're making the exact same logic error, but this time talking about majorities, so in addition to failing at logic you're failing at statistics.
Let me point you again at the law student example. All jobs as a lawyer require law school. About 70% of people who get law degrees will successfully pass the bar, and get a high paying job they otherwise couldn't and be able to pay their debts. About 30% will fail to pass a bar, and be put on that track, with the result that their best available jobs are much lower paying and they are hosed.
Did that 30% make a bad decision to go to law school? If so, then so did a lot of the other 70%, because it is not obvious going in who will and won't succeed. Most of the time, law school is a good choice. Some of the time it is a terrible choice.
Complicating the issue even farther, very few people going into law school are aware of how high the odds are of getting into serious debt problems. Until recently there was little public awareness of it, and marketing materials from law schools certainly make no mention of the issue.
(I'm pulling up this particular example because unsuccessful law graduates make up a high portion of seriously distressed student debt, and there have been lawsuits about false advertising around this issue.)
One of us is being stupid, but I don't think it's me.
The assertion is college is necessary for a middle class lifestyle. What I'm saying is 1) it's not and 2) when you add up lost opportunity costs, direct costs, and interest on student debt many people (maybe even most) are losing money by going to college. Now, that's their choice, but I don't want to be on the hook for someone else's personal enrichment.
>Did that 30% make a bad decision to go to law school?
Yes. Anyone who goes to law school right now is an idiot, unless that law school is Harvard or Yale. The 70% in your example are either lucky or have been shunted into jobs that don't require a law degree or they're working as lawyers and making less than they would have made teaching Social Studies to the local second graders. The number of newly minted lawyers far, far exceeds the number of jobs for newly minted lawyers.
The exception, of course, being people who got in to the very, very top schools.
You also have proven unable to parse English.
The assertion is college is necessary for a middle class lifestyle.
Your continued inability to parse English is getting old. Here, for the record, is the original assertion.
Not when the majority of jobs that create a vibrant middle class in the post-industrial United States require at least a college degree.
Now why do I say that you failed to parse this correctly? Because "majority" does not mean "all". So the majority these jobs could require a college degree but there could still be lots of them that don't require a college degree.
Going back to what you wrote...
Yes. Anyone who goes to law school right now is an idiot, unless that law school is Harvard or Yale. The 70% in your example are either lucky or have been shunted into jobs that don't require a law degree or they're working as lawyers and making less than they would have made teaching Social Studies to the local second graders. The number of newly minted lawyers far, far exceeds the number of jobs for newly minted lawyers.
Can you cite a source?
According to what I can find now, until 2009, law school had a fairly stable economic outlook. Then the bottom dropped out. Median starting income for newly graduated lawyers has dropped 35% since then. (See http://www.nalp.org/classof2011_salpressrel for a source.)
However stop and think for a second. Law school takes 3 years. People graduating this year into the dismal market entered in 2009, with decades of history of law being a good economic choice. The lifetime income for someone with a law degree averaged DOUBLE the lifetime income for someone with a bachelor's degree. In retrospect, the law degree was likely a mistake. But when they committed to it, based on the data that then existed, it looked like a good choice.
So, were all of the people who are walking around with useless newly minted law degrees demonstrating poor decision making abilities when they chose to do that? I don't really think so. They didn't spot the oncoming macro-economic train, but these things tend to be much clearer in hindsight than in advance. (I knew about the oncoming problem, but only because my brother was selling stuff to lawyers, and he told me how the financial crisis was impacting law firms.)
It is a dangerous assumption to think it is the place for a parent to judge if their children should incur the equivalent of half a decades debt when they themselves may have no comprehension of the value of a degree their kid is thinking of.
At some point people have to be treated as adults. If your parents aren't up to advising you on financial matters you have to get outside help. Or you figure it out yourself.
I refuse to accept the notion we should alter agreements freely entered into by adults in an effort to protect them from themselves.
I agree you should not alter open agreements, but those agreements are already biased by federal dollars in the form of guaranteed stafford loans. We need to get rid of federal loan and grant guarantees that are not merit based limited funding that happens after acceptance (so that schools can't focus target anyone getting a federal scholarship).
Imagine if you went to the local car dealer and he told you "Every car on the lot is $200k. But give me a detailed listing of your assets and income and I'll adjust the price such that you can barely afford to buy one if you take out as much financing as possible."
That kind of price discrimination is illegal for your local car dealer, but it's exactly what happens when your kid goes off to college. Not only that, colleges collude so that you can't play one college off against another.
Of course what they say is they're just making sure they have a "diverse" student body by cutting the less well off students a deal. But the net effect is the college takes in the maximum amount of money in tuition.
It's the biggest driver of ever-rising tuition, and were I in Congress I'd go on the freakin' warpath against this industry.
It's like saying "stock market returns 8% annually long term, so I'll put all my life saving into Shady Gadgets Inc. that was touted to me by some guy I don't know on the phone". That's not how rational investment is made.
This. It's not at all clear people make more money as a result of college or if people who are generally more likely to make more money are also more likely to go to college. There are certainly some very famously high earning college dropouts.
Even today only 40% of the population gets a college degree. That other 60% is doing something to make ends meet.
Student debt has risen in tandem with the codification of the narrative. An entire industry of loan operations has exploited the inexperienced eighteen-year-olds of the last few decades, saddling them with lifelong debt in the pursuit of the supposed "dream" the American narrative has been selling them their whole lives.
Suffice to say, when one talks about options available to people, one should talk deeply of the real viability and potentiality of those options on a person and his/her life, and refrain from rattling off platitudes of the things someone could do other than follow the narrative. Those things typically aren't qualitatively better, and usually wind up being part of the greater narrative as how we ease our consciences and wash our hands of people we allow to systemically fail.
You know who I envy? The electrician who came out last week to install a whole home surge protector. He makes excellent money, in a relatively safe work environment, and has reasonable hours. There's a whole world of "skilled" trades that offer gainful employment without a four year degree, but as a society focused on bling, we don't give those careers our blessings.
Exactly this.
Not only that, nobody's going to send his job to China.
Now obviously the theater industry is very competitive, especially in NYC. So while trying to do various theatrical activities to get her foot in the door, she's a dog walker. She doesn't make much money, so she's qualifying for assistance.
She could move back home, get a job in a different field (her dad has lined up several paying jobs), but she wants to stay in NYC. She's unable to make any payments on her loans, so those are going to build up quickly.
This is what drives fiscal conservatives crazy. And when groups are asking for student loan debt forgiveness/bailout, it's doubly frustrating. She's making multiple choices that are fiscally imprudent, and expecting to be subsidized both in assistance and loan forgiveness.
TLDR, basketweaving degrees aren't worth going into debt for, but an entitled generation wants to "pursue their dreams" on someone else's dime.
Now, they're thinking, "What the fuck?" and society is acting like it didn't push them headlong into this. By the time they've realized the narrative failed them, it's too late.
I'm obviously just commentating from the outside, but are you sure she is aware of her options in the same way you feel you are? What exactly are the options of someone who is trying to pursue her dreams? Do you step in and crush them, telling her it's time to give up and get practical? She'll be bombarded with anecdotes from the narrative that tell her to never give up. It's all-consuming. That's what cultural narratives do.
The narrative tells people to become self-actualized. The economic realities of a capitalist marketplace don't really have much room for that. The narrative has placed her in the disheartening place of having followed it and wound up unable to realize her dreams. That can be a very difficult place to move on from.
She seems disheartened by her lack of success in the last five years, but I know from personal experience that it's hard to change direction without a huge outside catalyst.
I don't think it's necessarily wrong to encourage people to follow their dreams, but I think that society in general and parents specifically should do a better job of raising kids with the ability to critically evaluate themselves. Parents are often blind to the flaws of their children (at least I am), and the business world loves to encourage the idea of following your dreams. Expecting teenagers to have this self-awareness isn't realistic though; some do, but the majority need to skin their knees a bit. Parents need to help with this.
It's a tough nut to crack; we glamorize sports and celebrity when the chances of succeeding in those arenas are miniscule. We celebrate working with our minds and denigrate those who work with their hands.
The morality behind medical finance in the US is not nearly as clear cut as you think it is.
> "Well, it's beside the point."
It really isn't. It comes down to the core of the issue.
What we have is an industry that collectively charges many times the actual cost of delivering their service and have a monopoly on performing a critical service (licensing, certification). Whether or not this is acceptable hinges hugely on whether or not you believe access to this service is a fundamental right.
There is no way, for example, that we would accept a similar situation if the product in question was fresh water or air.
The common public loves to simplify problems, as it makes things easier to comprehend. I think this leads us to this huge partisan gaps in beliefs in this country. Both sides are guilty of boiling down complex problems to a level where people think they "understand" the problem. Unfortunately, there are many more actors, causes, and effect behind the scenes that must be accounted for. It's not a simple cause and effect, Doctors must get paid, argument.
you are very much to blame if you take risks and choose
not to pay for insurance, regardless how expensive it is.
I had an appendectomy when I was in college and I had insurance and I still received a bill for something like $8000 after the insurance paid out. I managed to have half of that removed due to my very low income, and I luckily was able to pay the rest of it, but this was literally the simplest possible ER visit and surgery you can have and I was lucky to have savings to cover it. If anything worse had happened to me (say, if I got hit by a car) then I could easily have ended up with more than $10k in debt after insurance and after the follow up negotiations with the hospital.
Some insurance would certainly have covered this better, but I had the more expensive of the 2 choices insurance plans that were offered to students at my school. Anyone who is buying their own insurance if it's not provided by their employer isn't going to do much better.
The world is complicated and now more than ever everything is interdependent.
No matter the moral judgment ("he shouldn't be driving without insurance"), the underlying point was that random debt does happen :).
Take a look at your local newspapers mugshot section. Ours publishes them online, and when bored, it's a fun diversion. The majority of the arrests are for DUI, or driving on a suspended license from a prior DUI. A great cross section of people who don't even care about their impact upon others.
EDIT: Here's a link for people who think that anything coming from Fox should be dismissed out of hand immediately:
http://security-today.com/Blogs/REACTION/2012/11/Woman-Sente...
Edit on your edit: Selecting a single extraordinary instance to support your case isn't helping your case. This is no different from someone looking at the idiotic things on Fox News' prime time shows and saying they represent all conservatives.
I know many decent conservatives who think Fox News is for idiots, just as I know many poor people who are completely responsible and still struggle.
Society puts a lot of pressure on me to live up to its standards. It's my choice as to whether I let that pressure influence me against my values.
Sometimes all the choices and options suck. Not denying that at all. But if I ran over someone while driving in a tired state, or otherwise impaired, it would be ridiculous to not assume the blame for it. Yeah, my fatigue would be a slightly mitigating factor that might garner some sympathy, but compared to the poor schmuck I just hit? Not so much.
You can't really control the amounts of pressure and negative influence you get in life. But you can control how you react and respond to it.
The entire premise of OWS is that we can. Another world is possible.
[1] http://usatoday30.usatoday.com/news/nation/story/2011-09-11/...
If this group would focus on debt incurred from medical cases then I would be all for it. I want something where I feel good contributing, there are far too many dead beats out there who have hands out but never have a helping hand out for others.
Debt isn't some random accident like getting hit by a car
while crossing the street.
OWS, to me, represents an entitled generation.
- This entitlement thing. I don't see what's entitled about giving one's own time or money to a cause you believe in, to go camp out for weeks or whatever. It seems like a lot of criticism of OWS centers on them acting like they deserve to be given jobs, but I have trouble taking this seriously when the same pundits complain about slow growth in their stocks/financials due to decreased consumer spending and unemployment, and want to know what the government's going to do about it.
- Civil liberties and free speech are supposed to be the cornerstone of American democracy and yada yada, but people suddenly feel extremely threatened when people want to exercise them. Who cares, let the hippies have their say and their signs. Why let it bother you?
- Loan forgiveness, bank bailouts. This is the one that really annoys me because criticisms of OWS on this front tend to be so inconsistent. If a student gets over their head in debt trying to earn a degree, we shouldn't think of helping her out because that's a terrible case of moral hazard, and we'll only encourage that sort of risk-taking behavior. But if bank executives commit fraud and bet against their customers, then get multi-billion bailouts for their companies and multi-million severance checks for themselves, well, you know how business is, these things just happen, there's no help for it.
Anyway sorry for the rant, but I just think if you disagree with what OWS proposes, you should make an argument against it (or even better, just ignore it) rather than resorting to personal attacks or condescending catchphrases like "entitlement".
Notice the government doesn't get their panties in a bunch over the Westboro church, or Tea Party townhalls, but turn your attention towards the plutocrats and suddenly there's riot police in the street. The fact that the government feels threatened lends credence to their critique.
Also keep in mind that the Tea Partiers were carrying around assault rifles.
Yeah I'm not buying it.
But in the case of the Mortgage Market prior to the crash I can't - simply because it wasn't an equal/level playing field.
In brief
1) CDOs => Mortgage Origniators no longer held back by their risk levels. CDOs can just offset it.
2) MOs incentives are now drastically different - Incentive now entirely to generate as many mortgages as possible, whatever the risk profile.
3) With no incentive to care who was signing, as long as they signed - MOs sold to people they knew were incapable of understanding the terms, nor ever meet the conditions, creating things like NINJA mortgages/loans.
The MOs held the information advantage, and then abused it (look at the marketing material of the time) while now including people that they KNEW were out of their depth.
It was like stealing candy from a baby.
Edit: Formatting, point placement and flow
Heck de facto end/death of Glass Steagal was when Citi went ahead and merged with Travelers, even when they knew it would precipitate in a court case and most likely an end to the regulation
I get the feeling that there is disruption possible in this industry but I don't know enough about it to speculate how it could be disrupted.
So the mob will start buying debt from targeted individuals and have a "chat".
Short answer: various methods of systematic trickery and financial booby-trapping perpetrated by, you guessed it, the 1%.
One of the reasons OWS isn't more popular is that 99% of the 99% understands that the vast majority of personal debt was and is incurred by regular people living beyond their means, and not by nefarious schemes by nefarious monocle-wearing capitalists. Unsympathetic as it might be, they merely provided the rope.
And I say this as someone with no debt whatsoever and a reasonable income each month that I live within. You are talking nonsense.
http://www.washingtonpost.com/wp-srv/politics/documents/amer...
62% of all bankruptcies in the US have a direct medical cause, a sharp rise from only 8% in 1980.
"Vast majority" of debt incurred by lavish living indeed!
It must be a surreal world for you, one where it's okay to heap blame upon tens of millions of Americans without seeing one single shred of evidence against them.
$1 trillion of student debt. 64% of all bankruptcies caused by medical debt. 5 million homes foreclosed already, another 5 million in default or foreclosure. Credit card debt is $800 billion, generating an average 16.24% interest on money banks borrow at 3.25%.
First, they seem to fail to understand that the reason credit card debt is marked up from bank debt is that there's a fairly significant risk it's not getting paid back. Later on the same page, they state that 10% is written off as irrecoverable.
Second, "Vast majority" might have been artistic license, and I meant to refer to distressed debt - plenty of people use credit for completely reasonable things and service those loans, or have them restructured in good faith. Student debt is also mostly in that category. In other words, those loans will never be available for OWS to purchase for cents on the dollar.
That said, I'm not at all sure bankruptcies are a meaningful proxy for what kinds of debts are outstanding. Certainly, loans bankrupted on aren't included in this project, as they will already have been "forgiven". I couldn't find a good source (indeed, any source), but I would be very surprised if various bits of consumer credit (credit cards, car loans, store credit etc) aren't a very major chunk of the debt available for OWS to buy.
If OWS singled out medical debt and perhaps even some student loans, or made some other effort to review them to make sure they fit a moral prerequisite for having been screwed by "the 1%", I'd be sympathetic to the project. Instead, they are paying off random strangers credit card bill, while honest people who pay off their credit cards, even when it hurts, are passed over.
No, but distressed debt can be.