American Default

The “Occupy” crowd continues to search for a theme that will hit home and resonate with cross-sectional America as we approach the Christmas Season. Of course, you can’t say “Christmas Season” anymore in “politically-correct” America but there, I have said it. No matter, the point is that the “Occupy” crowd will no doubt jump at every chance to keep themselves in the news as the desperation level for attention rises within.

Maybe part of their problem is the fact that the dots just don’t connect up very well with mainstream America. Let me see if I can lay it out for you in a manner that makes sense. First, in the name of making education “more accessible” for people of all walks of life, the federal government decided to get into the finance business. This was not because it was a lucrative business but because those private entities which make it up apply some level of common sense and calculated risk values to the loans they make to people. This is coupled with the fact that the longer money is loaned, the higher the risk factors of not retrieving it successfully are. In other words, by the time you figure out the guy is not paying for the shoes, the soles are worn off of them. So to bridge that gap, the federal government cannot help itself and jumps into the mix really with the only motivation being that it garners the government more “control” over people.

So, the government, using taxpayer funds, tells lending agencies that it is okay to lend money to college-bound students on the basis of their signature though they have no verifiable employment and no particular projected date at which time they can repay the loan. The government takes it one step further and also entices the lending agencies to put a very affordable interest rate on the loans in the name of furthering education in America. Any fears offered up by these private sectors lending institutions are quickly calmed as they federal government is going to “guarantee” the loan payback to the entity even if the person taking out the loan defaults. If this sounds familiar, it is because you might remember a similar process which was started under the Clinton Administration with the housing industry. Of course, we know how that process worked out for the American taxpayer. We don’t need to speculate.

So those desiring higher education take advantage of this government support and take out loans for their education. Not only do they take out loans for education but in the name of “education”. You see, I need a car, food, a place to live, clothing, books, cd players, i-tune downloads, I-Pod, I-Pad, Smart-Phone, computer, laptop, Kindle…and the list goes on and on of the “essentials” for which these loans are required. At the same time, our educational institutions see that the students are not spending so much of their money as they are the “government’s money” so why not raise the cost of an education as often as possible. That way, we can afford to pay our many professors who are here teaching socialist and communist studies more money in their already fat tenured salaries. The logic is coming right through, huh?

If that is not enough, the government will also turn its head while the “students” file for things like living assistance and food stamp programs along with supplying access to discounted healthcare programs through the university systems. There seems to be help on every corner and it is mostly courtesy of the American federal government albeit the American taxpayer.

So the money is there, why not take it and worry about the outcome later? That seems to be the attitude which prevails. The loans get treated like a credit card which comes in the mail with no credit limit and no set time to pay. Initially, they take a little but then need a little more and each time the take gets a bit bolder and the debt piles up. But wait, this is good debt…after all this is for educational purposes, there is no ill-intent here. Besides that, the government is guaranteeing the loans so why should we worry? It’s not our money.

Four to six years goes by, which by the way, for a young college student is an eternity. Why make a five year plan…that’s like planning for infinity? The debt piles up and one day they actually graduate with a degree in something or other. For example, one Occupy protester carried a sign claiming that she had spent $96,000 to get a BA Degree in Transgender Gay & Lesbian Studies and she cannot find a job. Apparently she is shocked with this outcome although most of mainstream America could have likely forecasted the outcome four to five years before. Why? Do you really need to ask?

We live in a day and time when research and information is literally at our fingertips. If one is choosing a career path is life, the means to study and research that direction is easy enough on the Internet today. Along with getting information, one can also find out how available the job market is and how well particular jobs pay. It makes little sense in this day and time to be surprised by the lack of jobs for a given degree or the lack of pay for that matter. Some degrees exist solely on the basis on filling a desire for knowledge for some people but in terms of monetary value, they have little. Apparently that fact is hard to perceive even for some of our more literate Internet college-bound types. Maybe it is because education in America has been way over-rated and way over-emphasized thus the expectations once the degree is attained are far too high. There is also the “deflationary factor” in the college degree…as more and more people acquire them the value decreases and the “inflation” in the need for higher education beyond the four year mark increases.

So, let’s get back to the status of this loan process so that we can finish connecting the dots for the Occupy crowd. Now, we have reached the point where the student has received the loans guaranteed by the government on only their signature and promise to payback at some date in the future. The future finally arrives and here the graduates are with degrees which are not very effective in terms of employment. The economy is down; companies are down-sizing and focusing on those critical core functions necessary to survive in business. Good jobs with pay and benefits are hard to come by and there is a lot of competition for them. As much as it seems that this is the first time this has ever happened in America, it is not. The job market, like the stock market, goes through continual cycles of “ups” and “downs” over time. It just so happens that this “down” has occurred as a result of the collapse of the Bill Clinton Era housing bubble which damn near pulled everything else into the abyss with it. So, it should be quite clear to every college graduate by now that our economy, just like our student loans, is guaranteed by the federal government.

So, where does that leave us? Well, this is the spot in the formula where we make the jump. We take the job market and the state of the economy along with the fact that we have no job and blame it on corporate America. That’s right! Those evil corporations have squandered our money and our jobs and left us holding the bag on our student loans. You see, it really doesn’t matter that there is no “business need” for my skillset and learning, the system owes me a job. It should have “guaranteed” me one at a guaranteed pay level with great benefits. I am owed that, after all, I got my degree. What right do those evil corporations have in holding back jobs that rightly should be mine? Who do they think they are anyway? They’re evil! You know what? I’m going to show them that two can play this game. Because they have been so evil and mean, I am just not going to repay my student loans. That will show them. Now let’s see what they say!

And there you have it, folks. We make the leap from federal government guaranteed loans for education to the mishandling of the job market by large, evil corporations and calculate that the best and most logical thing to do is not to repay the loans we have taken. Never mind the big evil corporations, they will not suffer one way or the other if student loans are not repaid but the American taxpayer will. After all, that was our money the government so generously loaned for such good purposes and now those who benefited by the loans want to default on the claim that they are “getting back” at corporate America. What they are doing is stealing from the American taxpayer and too many of us are willing to shrug our shoulders and look the other way because they got a raw deal?

One figure put forth states that approximately 70% of those Americans who hold college degrees work in a profession which is not related to their degree directly. Why is that? Part of the reason is that ultimately we all have to make a living and the reality of life says that if you cannot make a living in one area, turn to another. Secondly, many of us studied things in college for all the wrong reasons. Suzie became a teacher because her math teach in high school, Ms. Johnson, was such a dear lady and her idol. She wanted to be just like Ms. Johnson so she went to college and studied education to become a teacher having no idea of the rigors of the daily job. Suzie hates her job as a teacher now. In the end, we have to make a living and we have to find employment that is tolerable to our nature as people. Yes, we still put up with many things that we don’t like but such is the reality of life.

How long does it take for an individual to figure out what their expectation of lifetime income could project to be? Let’s see, if I can average making $70,000 per year for 40 years that comes to $2.8 million dollars in total working life income. Now, on that basis, is spending $500,000 which I have to take out in loans worth the price? Of course, I have to take into consideration that no one is guaranteeing me a job once I get my degree or a set income. So I am gambling on borrowing $500K to possibly earn $2.8 million over 40 years. Basically, if I go ahead with that plan, I am saying that I am willing to risk almost 20% of my potential lifetime income upfront on an education.

Those are serious numbers that require some serious consideration as to risk and outcome. The same people who will not take this risk on a single bet in Las Vegas will make this bet in life without researching it or thinking about it. Why? They don’t research it or think about it as they would the bet in Las Vegas. They just blindly stumble in and take things as they come not really knowing where it is all headed in the end. For all the time and money spent on educating our young these days, we sure do leave them hanging when it comes to this perspective on education.

This is the void in credibility that the “Occupy” crowd faces with mainstream America at the present. Far too many of them have taken money on the backs of the American taxpayer and now they want to default on the repayment because they cannot find viable employment in the marketplace. That anger is turned on corporate America as the scapegoat while the federal government sits over in the corner having guaranteed loans in not only the educational sector but also in the collapsed housing/financial sector of the market. That government sits there without blame watching the problems it has created play out between the youth of America and the evil corporations who are to blame for it all in their eyes.

Not only has our government loaned “our” money in a rather risky scenario, but it has loaned that money to allow these young Americans to sit in a classroom and listen to the likes of Bill Ayers and others of the 60’s radicals who now hold tenure in universities around the country. These are individuals who openly defy the American capitalistic system and promote the concepts of socialism and communism to the youth of our country. At the same time, they have no problem taking their six-figure paycheck each year for their philosophical offerings. We teach our youth such concepts as utopian while they are going to school on the “taxpayers” dime. How stupid can we be?

The American educational system is the rudder that eventually guides this ship of state through the waters that it navigates. The system does so by teaching young minds the principles on which this country was founded and evolved to the great nation that it has been. Some, if not all of that has been lost somewhere along the way in the process. Now, we spend far too much time teaching the evils of our own society and the utopian aspects of concepts which have failed time and again in societies all over the world over time. There are sinister forces at work in our educational system in America and they are functioning on the backs of our taxpayer dollars which are going for loans which will likely go into default in the name of tearing down corporate America.

So, when you sit down to watch the nightly newscast and see the “Occupy” crowd doing whatever it can to keep their name in the media on a daily basis somewhere in America, stop and think about it all for a bit. Haven’t we, as taxpayers, already done more than enough for this crowd? Do we really need to shut down commerce in America in order that we might get these folks to repay their education loans? Is this why so many in the media correlate this group to the Tea Party Movement in its desires and goals? Surely mainstream America is not that naïve.

©Copyright WBrown2011. All Rights Reserved.

11/29/2011