Posted on 09/12/2009 8:31:09 AM PDT by Sopater
Congratulations. You're about to own $100 billion a year in student loans.
The furor over President Obama's trillion-dollar restructuring of American health care has left his other trillion-dollar plan starved for attention. That's how much the federal balance sheet will expand over the next decade if Mr. Obama can convince Congress to approve his pending takeover of the student-loan market.
The Obama plan calls for the U.S. Department of Education to move from its current 20% share of the student-loan origination market to 80% on July 1, 2010, when private lenders will be barred from making government-guaranteed loans. The remaining 20% of the market that is now completely private will likely shrink further as lenders try to comply with regulations Congress created last year. Starting next summer, taxpayers will have to put up roughly $100 billion per year to lend to students.
*** For decades, loans carrying a federal guarantee have been the most common way of borrowing for college. After raising money in the private capital markets, lenders made the loans, paying a fee to the government for each one. The government covered most of the cost of defaults while allowing the private lenders to make a regulated return.
The system broke down after Congress in 2007 legislated a return so low that no private lenders could make money holding these assets. To keep the money flowing to student borrowers, the government began buying the loans from private originators last year. But this larger federal role was intended to be temporary, with an expiration date next summer. The news from Washington now is that rather than scaling back federal involvement, the pols want the U.S. Department of Education to be the exclusive banker to America's college students.
(Excerpt) Read more at online.wsj.com ...
Another thread on FR today is a Mark Steyn NRO editorial which contains this commentary on the Left's agenda and the "conservative" response. Steyn observes:
"As I’ve written before, the appeal of this issue to him and to Nancy Pelosi, Barney Frank, et al., is that governmentalization of health care is the fastest way to a permanent left-of-center political culture — one in which elections are always fought on the Left’s issues and on the Left’s terms, and in which “conservative” parties no longer talk about small government and individual liberty but find themselves retreating to one last pitiful rationale: that they can run the left-wing state more effectively than the Left can."
Steyn makes a point here which has been the focus of my posts over the past several weeks. That is this: the debate must not be allowed to focus on the peripheral points around the "issue" of health care, the banks, the auto companies, or any other quibbling over who can run the best "government" program with taxpayer money!
The liberty of future generations is now at stake. This is a "principles" matter. The debate must be framed around principles and ideas of liberty versus counterfeit ideas which enslave individuals to big government.
True "conservatives," meaning those who want to conserve and preserve the philosophy and principles the nation was founded upon, must frame the debate, and they must force the Left to debate the ideas of liberty versus the tried-and-failed ideas of government control (tyranny). To do less, dishonors those who were willing to sacrifice their "lives, property, and sacred honor" in order to make a Declaration of Independence from such tyranny and to frame a written "People's" Constitution for limiting government power.
Articulating those ideas and confronting every proposed expansion of government power with the "chains of the Constitution" (Jefferson) may require a new cadre of Congressmen and Senators who actually understand the Founders' ideas. If so, then 2010 may provide opportunity for that.
To use the President's term: conservatives need to reset the debate if they are to regain the advantage. In order to do that effectively, however, they must quickly educate themselves to articulate the foundation and source of their freedom to do so.
Read the tagline.
You are now ruled by an African Communist, just like his daddy.
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I have a friend (ex-friend actually) who got loans to go through school. After many years she finally graduated with a masters in counseling. She couldn’t find a job in the area of counseling she wanted, & ended up getting married to a guy who insisted in a pre-nup that she pay her old debts including those loans. Well, she’s never worked a day since (hubbie makes a good living & gives her pocket money of about $500/month) & she takes a class (art) every 9 months to keep her loans at bay. (As long as you still take classes within a certain period you don’t have to start paying back your loans.) This has been going on at least 15 years if not longer. I have no doubt that she thinks Obama will forgive the debt at some point…
This Administration is cutting off its nose to spite its face. When people in Democratic districts start seeing their own jobs disappear due to unfair government takeovers and government competition, they will turn against the Party of Government.
The next trillion $
or jillion
gazillion
whatever.
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