A couple weeks ago the Wall Street Journal confirmed our worst fears about the student loan program, that is, that it was going to blow up in the government’s face just like all the other gigantic debt-bubbles that preceded it.
For the sake of background, here’s a brief excerpt from the article that will bring readers up-to-date:
While it all sounds very shocking, the real eye-popper was buried deep in the text where it was most likely to be ignored. Here it is:
Let’s see if I got this right: The Fed
Federal Reserve Officially, Federal Reserve System, is the United States’ central bank created in 1913 by the ’Federal Reserve Act’, also called the ’Owen-Glass Act’, after a series of banking crises, particularly the ’Bank Panic’ of 1907.
FED – decentralized central bank : http://www.federalreserve.gov/ , government regulators and the entire political establishment looked the other way while the mortgage Mortgage A loan made against property collateral. There are two sorts of mortgages:
1) the most common form where the property that the loan is used to purchase is used as the collateral;
2) a broader use of property to guarantee any loan: it is sufficient that the borrower possesses and engages the property as collateral. industry cranked out trillions of dollars of “toxic” subprime liar’s loans that Wall Street bundled into garbage bonds that wound up blowing up the entire global financial system and plunging the world into a severe recession from which we still haven’t recovered. Then, a couple years later, they start pumping up another lethal trillion-dollar credit bubble, this time comprised of equally toxic “student liar’s loans”?
Is that what they’re saying?
That’s it, alright. This is why there should be blanket amnesty for all the student debt generated in the last decade. It’s because the whole thing was another filthy credit-swindle from the get go.
And let’s be honest; it’s not the government lenders who were scammed in this deal, it’s the students. They’re the victims, in the same way that the applicants, who borrowed hundreds of thousands of dollars for mortgages they could never repay, were the victims. The lender is ALWAYS responsible when a loan that goes belly up. ALWAYS. Because it’s their freaking job to figure out who can pay and who can’t. Period. That’s all they do, lend money. And they’re pretty damn good at it too, when they actually expect to get repaid, which in this case, they don’t. That’s why we know it’s a scam.
So now we’re supposed to believe that no one could have foreseen this trainwreck ahead of time. Is that it? Is that what Obama and the media and the rest of the crooked financial establishment want us to believe; that no one could known that 40 percent of the borrowers were going to ‘stiff’ the government?
Baloney. The handwriting was on the wall from the very beginning. Take a look at this interview I did with professor Alan Nasser in 2011.
Repeat: “between 38 and 51 percent were anticipated to default” … “Higher than subprime mortgages.”
Bottom line: The shysters who issued these roadside bombs knew from the beginning that a high percentage of them were going to blow up. What more proof do you need that the whole thing is crookeder then hell? And this interview was conducted back in 2011, which means that these credit chiselers knew what they were doing from the very beginning. The Obama-Fed-Wall Street cabal wanted to inflate another massive credit bubble so the thieving lenders could skim heftier profits while Obama crowed about his great economic recovery. That’s what it’s all about. And they didn’t care that gullible college kids were being drawn-and-quartered so they could make more dough either.
What kind of country is this anyway, where the government deliberately bamboozles its kids about the “value of a good education” just so they can extort as much money as possible from them in the future?
Here’s Nasser again:
“Cha-ching!” That’s the happy sound of your predatory government fleecing your children.
Of course the private lenders make even more than the government does because they’ve developed a whole system for extracting as much wealth as possible from their unwitting victims. No surprise there. Private lenders always get their pound of flesh and then-some.
So here’s a question for you: Why do you think Congress passed legislation making it impossible to discharge student loan debt through bankruptcy just months before the surge of student lending began? Do you think it was all just a big coincidence?
Give me a break! This thing has “setup” written all over it. Congress knew what they were doing. They knew they were part of a big sting operation targeting credulous students who never guessed that their government was just a bunch of lousy shakedown artists. And now congress can pat themselves on the back for a job well done, for luring millions of millennials into a lifetime of indentured servitude. That’s quite an accomplishment, don’t you think?
Hurrah, for Congress! The scumbags.
Here’s Alan Nasser again:
Get the picture? So the worse it gets for the students, the better it gets for the lenders. Students get a lifetime of drowning in red ink, and lenders get a nice fat bonus of 60 percent off the top. Nice, eh?
Don’t you love America?
Let’s cut to the chase: Students have been defrauded on a massive scale by the credit Mafia, the brotherhood of crooks (Gov and private) whose only goal in life is to suck as much blood as humanly possible out of their victims and then move on to the next. That’s how the game is played.
The only way to defeat this cadres of racketeers is to stop paying. That’s it. No more money for you.
We’re not talking about lower rates, or partial relief or a temporary debt moratorium. Oh, no. We’re not looking for any namby-pamby, half-loaf “loser” solution. We’re talking about total, blanket student debt amnesty. Wipe the slate clean. End the debt now.
And if it crashes the US Treasury, well, good riddance.
lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney at msn.com.