Re: No fixed rate Student Loan
Fred Goodman
5/3/2012 1:05:42 PM
C'mon @Scott, this is not fair.
GDP = C + I + G + (X - M)
That's Consumption, Investment, Government spending eXports and iMports
The biggest factor in the increase in GDP has been government spending in the last three years.
So, ff you bloat up the GDP with a failed stimulus package, higher interest payments due higher debt, higher government spending like Solyndra and lavish parties by government bureaus you will have a higher GDP.
Then you can complain that the increases in education spending aren't as big as the increase in the GDP. It will appear as a lower percentage of the total GDP even though it is climbing.
Let's face it, we're being duped in an attempt to permit more wasteful spending for reelection purposes. Let's wipe out all student loans on October 25th so we can count on the votes of the students and their parents.
Re: No fixed rate Student Loan
Fred Goodman
5/3/2012 12:56:38 PM
Well @Scott, perhaps you didn't note the following in my post:
" The following comes from www.usgovernmentspending.com and includes all government spending, local, state and federal."
This may explain the differences between your figures and Noreens to my astroturfing site "www.usgovernmentspending .com"
I included all government spending local, state and federal while you focused only on federal.
The States are important since so many of them are bankrupt and the fed keeps dumping more mandates on them.
Then, there's the question of how much is the RIGHT amount to spend on education. I think the RIGHT amount is attached to the RIGHT amount to spend on the pensions, salaries and research expenses that are now tailored towards the reelection efforts of incumbents rather than on the educational requirements of students.
We always hear that we don't spend enough on education but we never hear that we are wasting at least as much as we are spending. When will you address the value of the spending instead of assuming it is the RIGHT amount but that the taxes aren't high enough.
When will you address the inadequacies of the current educational system without simply telling taxpayers that we are not spending enough.
Let's get the cart behind the horse for a change. Fix the spending before increasing the income instead of never.
@noreen
Yes anybody who argues that Educational spending is part of the problem is clearly not looking at any facts. Education spending has not caused our budget problems. In fact it is down as a % of GDP in the budget.
Fred, your numbers are vague and unhelpful. I think they were taken from astroturfing site. They are inaccurate. Most of the numbers you cite are part of the entitlement programs. Discretionary spending is less than 19% of the budget and has actually been stable as a % of GDP for many yeras. Here is a real pie chart from the CBO:
Now, I have spent hours studying the budget and both sides of the story. Basically both "sides" exaggerate their position. The budget problems are quite simple, actually:
1) Wars. Three wars are very expensive.
2) Entitlement spending. This can be broken down into two parts:
a) Entitlement spending "bloat" due to inefficiences and bureaucracy -- and rising healthcare costs.
b) Declining demographics. More retired people, less workers.
You can fix a but you can not fix b.
So yes, I agree, we need to fix the budget, but we need a realistic perpective on what the problems are.
Any time somebody starts with a "budget is out of control" tirade but refuses to bring ridiculous amounts of military spending into the picture (Paul Ryan, for example), it is a non-starter for me.
And, by the way, I am all for entitlement reforms I am under 50 years old and I don't expect to see any social security, I am planning accordingly. At the minimum raising the retirement age would be a good start.
We can also drill down to federal higher education costs. This is a better number to use than the one cited below because it only addresses federal spending, the focus of our discussion. ((in millions of dollars). You can see we actually spent a lot more in higher ed in 2006 than we do now.
| Function and Subfunction |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2012 estimate |
2013 estimate |
| 500 Education, Training, Employment, and Social Services: |
|
|
|
|
|
|
|
|
|
| 502 Higher education |
31,442 |
50,471 |
24,637 |
23,566 |
-3,258 |
20,023 |
1,108 |
13,198 |
16,573 |
I posted this last month but I'll repost it here in support of Scott's point that education spending lags far behind defense and Social Security. Source: federal budget
| Receipts |
2012 YTD |
2011 YTD |
| Individual Income Taxes |
484,143 |
475,598 |
| Corporation Income Taxes. |
84,537 |
55,081 |
| Social Insurance and Retirement Receipts: |
|
|
| Employment and General Retirement . |
372,358 |
371,388 |
| Unemployment Insurance . |
20,062 |
16,053 |
| Other Retirement ... |
1,884 |
2,016 |
| Excise Taxes . |
34,779 |
33,032 |
| Estate and Gift Taxes . |
6,157 |
175 |
| Customs Duties |
14,564 |
14,119 |
| Miscellaneous Receipts .. |
45,901 |
52,434 |
| Total |
1,064,384 |
1,019,896 |
|
|
|
| Net Outlays |
|
|
| National Defense |
350,245 |
357,498 |
| International Affairs. |
24,272 |
20,308 |
| General Science, Space, and Technology ... |
13,841 |
14,476 |
| Energy ... |
7,219 |
6,608 |
| Natural Resources and Environment ... |
19,579 |
22,489 |
| Agriculture .. |
15,760 |
17,266 |
| Commerce and Housing Credit |
36,274 |
-194 |
| Transportation |
44,159 |
44,251 |
| Community and Regional Development... |
14,914 |
11,518 |
| Education, Training, Employment and Social Services . |
54,446 |
72,609 |
| Health |
170,509 |
194,309 |
| Medicare |
232,854 |
226,667 |
| Income Security .. |
310,213 |
336,110 |
| Social Security |
378,100 |
359,716 |
| Veterans Benefits and Services ... |
64,832 |
60,827 |
| Administration of Justice |
28,190 |
28,659 |
| General Government . |
11,317 |
10,282 |
| Net Interest . |
121,712 |
116,341 |
| Undistributed Offsetting Receipts . |
-55,066 |
-50,424 |
| Total |
1,843,372 |
1,849,315 |
PC - the loans you are referencing are the same federally issued ones I have been pointing out repeatedly -- the ones that are limited to $5,500 to $7,500 a year per student. As I said several times, this still leaves plenty of unmet need, which the banks fill with market rate products that are issued jointly to parents and cosigners.
Re: No fixed rate Student Loan
Fred Goodman
5/3/2012 4:24:29 AM
Thank you @predictableChaos for reminding us of that. It was two years ago and I had forgotten what lies ahead.
The banks don't have to compete with the government
@Noreen - Maybe they do. In the Health Care bill (of all places) didn't the Federal government take over several billion dollars of student loans? I think this was part of the effort to get to "revenue neutral".
I'm sure they'll bring all the efficiency of the TSA and the GSA to the student-loan process. Might just make the big banks seem cheerful and kind by comparison. I can hardly wait.
Re: No fixed rate Student Loan
Fred Goodman
5/3/2012 1:28:55 AM
Well @Scott, we can disagree and still be friends.
You mentioned Defense spending, Medicare, Medicaid, and Social Security, and they are all big expenses. However, you have omitted certain categories. The following comes from www.usgovernmentspending.com and includes all government spending, local, state and federal.
In descending order:
Health Care 1.1 trillion
Pensions 1.0 trillion
Education 0.9 trillion (omitted above)
Defense 0.9 trillion
Welfare 0.7 trillion (omitted above)
and let's not forget interest on the debt which is 0.22 trillion at a current rate of 1.37%, a rate that is not likely to continue very much longer.
I don't think education is a pimple, but if you want to dissect student loans from education than why not dissect wars from national defense and unemployment insurance from welfare. You already separated medicare (13% of the federal budget) from medicaid (7% of the federal and 9.8% of the state)
The point is that we must have priorities and cannot unilaterally decide that helping a student go to college is more important than protecting that student from getting killed because the borders are open to terrorists.
I have expressed no complaint about how our taxes are spent, I just want people who complain about the evil banks to be aware that there is more to worry about than helping parents send their children to college. There will be no college and no jobs and no vacations and little to eat if we don't get started controlling our runaway government spending. The National debt has grown from 11 trillion to 16 trillion in three years and we do not even have a budget.
I can name at least a half dozen books recently written about the current debt and its relationship to world history, but the one I am just finishing is as good as any. Currency Wars by James Rickards is more than worth the time.
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