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Bankers encourage people to borrow beyond their means, preying especially on those who are financially unsophisticated.
You can't fix stupid.
We should cut off federal support for these for-profit schools when they fail to graduate students, who don’t get jobs and then default on their loans.
We should cut off funding to state schools that do the same thing.
Stiglitz et al. are conpersons first.
They keep out of sight these compelling, simple histories:
http://patrick.net/?p=1223928
Authorities have one key goal, which is to load people with debts at all cost. They absolutely need this to create fake 'demand' to maintain the status quo in a country with stagnant wages.
Every $ a private individual borrows is a $ that will not have to be borrowed by the government in his name.
They used housing for years, making sure most people have to load themselves with debts up to the eyes balls just to live what they see as a normal life.
But in the absence of housing, student loans will do it, and car loans if necessary.
This disaster is not a bug: it's working as designed.
And they won't "fix it", maybe just adjust it so the donkeys are not killed by the load they carry.
Authorities have one key goal, which is to load people with debts at all cost.
They absolutely need this to create fake 'demand' to maintain the status quo in
a country with stagnant wages
To a certain extent you are correct. I always believed that much of spending that occurs at shopping malls is via credit card debt. Same thing for other discretionary spending such as dining out. If someone spends even a penny in interest on those things, it indicates that one cannot afford them. Unfortunately the masses do not rebel and stop this behavior which allows the puppeteers to contunie paying low wages.
I always believed that much of spending that occurs at shopping malls is via credit card debt.
It's a direct or indirect spending. Students borrow money, which goes to professors, who spend it to buy something. Or person A buys a used house to person B who pays back the remaining of her mortgage and use the rest of the money to buy something. These purchases were financed by debt, though people who did the spending didn't realize it.
When there is a deficit between a country revenues and what it consumes in aggregate, the difference is financed by an increase in the aggregate debt. This is why authorities (president, congress, central bank) are bent on pushing people in debt.
This is also why the idiosyncrasies of real-estate agents is not the heart of the problem. The account deficit (trade), and the monetary system, including the way banks create money, is where the problem is.
Kind of getting to be an old problem in a new world, where "only money matters" becomes only stronger, but I think this still fits here.
http://intercontinentalcry.org/the-century-of-the-self-happiness-machines/
http://opinionator.blogs.nytimes.com/2013/05/12/student-debt-and-the-crushing-of-the-american-dream/?hp