Half of the US government's financial assets are student loans • Hacker News Board

Re: Half of the US government's financial assets are student loans

#121

Post by the_gastropod » Fri, Jan 12, 2018, 10:02 PM UTC

45h34jh53k4j wrote: post #78

adreamingsoul wrote: post #65

Earlier quoted context omitted.

Millennial here, thanks for the daily reminder of the future I have to deal with. Failing government systems, check. Unaffordable educational system, check. Limited housing and land, check. Degrading climate, check. Some days I believe I just may find a way out of it. But, for every day I participate in the rat race is just another lost when I should be working on building a better future for my family.

dont worry. put your funds into 'good money' like sensible cryptocurrencies and watch your savings multiply. that is how we will fight the crooked boomer system.

This is really dangerous advice, especially for the poor. Crypto "investments" only multiply by convincing the next person down the line to buy your at a higher price than you did. Add to this that there are no consumer protections around it, and it's an absolute honeypot for scammers.

99% of the key to wealth is to live beneath your means. It's unglamorous advice, but it's absolutely effective.

Re: Half of the US government's financial assets are student loans

#122

Post by lewis500 » Fri, Jan 12, 2018, 10:02 PM UTC

Would it be better if banks owned all the debt? I think the really bad statistic is just how much student debt there is.

Progressives in Oakland want the city to create a municipal bank. If they do, maybe progressives will then complain "Y% of Oakland's assets are mortgages and small business loans."

For any level of student debt, I think it is obviously better that the government own a lot of it, as the payments the government receives can be used for spending. The payments banks receive go to shareholders. In fact, given the government can borrow money at 2% while student loan rates are like 4-8%, it might not even be a bad idea to have the government issue treasuries and buy more student loans. Administratively, perhaps this would be bad for reasons I can't guess ex ante, but off the cuff I can't see why it's bad for the government to own lots of student debt, especially when government is what enforces the debt contracts (siphoning off your wages in the event of default, etc).

One could argue that the government should just cancel all or most of that student debt. Maybe so, but if that would cause the government to forgo $X billion in revenue every year, I think it would be better to just have another $X billion in spending. However, if the $X billion would just go to more tax cuts for the super-wealthy then perhaps it would be a good idea.

Re: Half of the US government's financial assets are student loans

#123

Post by jfaat » Fri, Jan 12, 2018, 10:03 PM UTC

SheepSlapper wrote: post #96

gesman wrote: post #11

Recent reports from the Treasury Department show that the US government owns nearly $1.5 trillion in student loans. That’s pretty sad when you think about it: the US government’s #1 financial asset is debt owed by tens of millions of its young people for university education that didn’t even necessarily qualify them for a real career. Millennials are the most educated generation in history. Yet there are record numbe…

> Millennials are the most educated generation in history. Yet there are record numbers of them working off student debts as waiters and bartenders, and supplementing their income on the side with ‘gigs’ (like being an Uber driver) We're the most educated in history, but many people decided to use that education to learn topics that aren't lucrative/in demand. Personal responsibility plays in a ton here, and some peo…

So you call a millennial getting a degree not ‘personally responsible’? Disclaimer: anecdotes ahead, but I know many, many millennials who grew up hearing ‘Just get a college degree and you’ll be in good shape’ who did and aren’t, respectively. Not everyone is geared toward being an engineer or mathematician or scientist. For those who aren’t, and followed the resounding conventional wisdom to get a degree, largely got screwed. Full stop. Personal responsibility would hold water in a world where millennials gave up on the system and got screwed. This isn’t that world.

Re: Half of the US government's financial assets are student loans

#124

Post by noobermin » Fri, Jan 12, 2018, 10:04 PM UTC

SheepSlapper wrote: post #96

gesman wrote: post #11

Recent reports from the Treasury Department show that the US government owns nearly $1.5 trillion in student loans. That’s pretty sad when you think about it: the US government’s #1 financial asset is debt owed by tens of millions of its young people for university education that didn’t even necessarily qualify them for a real career. Millennials are the most educated generation in history. Yet there are record numbe…

> Millennials are the most educated generation in history. Yet there are record numbers of them working off student debts as waiters and bartenders, and supplementing their income on the side with ‘gigs’ (like being an Uber driver) We're the most educated in history, but many people decided to use that education to learn topics that aren't lucrative/in demand. Personal responsibility plays in a ton here, and some peo…

>We're the most educated in history, but many people decided to use that education to learn topics that aren't lucrative/in demand,

People keep saying this as if it's true without citing anything regarding it. Is there any hard evidence this is true?

Re: Half of the US government's financial assets are student loans

#125

Post by fineng123 » Fri, Jan 12, 2018, 10:04 PM UTC

rgbrenner wrote: post #91

gesman wrote: post #11

Recent reports from the Treasury Department show that the US government owns nearly $1.5 trillion in student loans. That’s pretty sad when you think about it: the US government’s #1 financial asset is debt owed by tens of millions of its young people for university education that didn’t even necessarily qualify them for a real career. Millennials are the most educated generation in history. Yet there are record numbe…

the US government’s #1 financial asset is debt ... for university education This isn't quite true.. In addition to the assets in the chart, the governemnt has about 8T in mortgages (out of 15T total outstanding) through several Government Sponsored Enterprises, like Freddie Mac and Ginnie Mae: https://www.federalreserve.gov/econresdata/releases/mortouts... The only difference is that the government took over the stud…

That's a pretty bad comparison actually. They don't "have" them. It's just another place to sell your risk when you do a mortgage deal and then they repackage them and sell the end result to investors. It's necessary (or helpful rather) so that you don't have to have a balance sheet to hammer out CRE deals. You can just do the deal and sell the risk and not keep the interest rate risk on your books.

The Fed's balance sheet on the other hand, now that makes the student debt load seem miniscule.

Re: Half of the US government's financial assets are student loans

#126

Post by Density » Fri, Jan 12, 2018, 10:04 PM UTC

SheepSlapper wrote: post #96

gesman wrote: post #11

Recent reports from the Treasury Department show that the US government owns nearly $1.5 trillion in student loans. That’s pretty sad when you think about it: the US government’s #1 financial asset is debt owed by tens of millions of its young people for university education that didn’t even necessarily qualify them for a real career. Millennials are the most educated generation in history. Yet there are record numbe…

> Millennials are the most educated generation in history. Yet there are record numbers of them working off student debts as waiters and bartenders, and supplementing their income on the side with ‘gigs’ (like being an Uber driver) We're the most educated in history, but many people decided to use that education to learn topics that aren't lucrative/in demand. Personal responsibility plays in a ton here, and some peo…

STEM grads are only mildly better off. Turns out the sem parts of stem haven't experienced the same jobs boom:

https://mobile.nytimes.com/2017/11/01/education/edlife/stem-...

Re: Half of the US government's financial assets are student loans

#127

Post by smnrchrds » Fri, Jan 12, 2018, 10:05 PM UTC

vminkov wrote: post #93

adreamingsoul wrote: post #65

Earlier quoted context omitted.

Millennial here, thanks for the daily reminder of the future I have to deal with. Failing government systems, check. Unaffordable educational system, check. Limited housing and land, check. Degrading climate, check. Some days I believe I just may find a way out of it. But, for every day I participate in the rat race is just another lost when I should be working on building a better future for my family.

Come to Eastern Europe, your student loan money is enough for a whole new life here. P.s. honestly, I don't understand how ppl who are so hoplessly indebted are not migrating here. Bulgaria offers very cheap life with the opportunity of doing business with the EU and the US. Why work 24/7 when you can enjoy a good life in a place where the local people and economy need a foreigner to lead them in the business and glo…

It is not so easy to immigrate to Eastern Europe from outside EU/EEA. I don't know about Bulgaria in particular, but typically in order to move to another country, either permanently or temporarily, you need to show that you have a degree in an in-demand major, a job offer from a reputable employer in the country, and an official assessment showing that you will not negatively impact the labor market, e.g. by taking a job a citizen could have done. You can't just pack your bags and take a plane and expect to be allowed to work in the country of your destination.

Every election season, many people in the US say "If X is elected, I am moving to Canada." Then they check the immigration department website [1], realize it is going to take multiple years and thousands of dollars for them to navigate the immigration system, and even then there is a high likelihood of failure. So most promptly give up.

The bureaucratic difficulty of immigration is not the only issue dissuading potential immigrants. Language barrier, cultural differences, loss of one's professional network, the possibility that one's education and experience wouldn't be acceptable to the employers in the destination country, family and friends, etc. also play a role.

I am sure many consider moving to Easter Europe, but few end up going through with it.

[1] http://www.cbc.ca/news/politics/website-crash-immigration-tr...

Re: Half of the US government's financial assets are student loans

#128

Post by chatmasta » Fri, Jan 12, 2018, 10:05 PM UTC

JumpCrisscross wrote: post #76

chatmasta wrote: post #40

Earlier quoted context omitted.

They can only garnish your wages if you’re a W2 employee, or use the banking system. Contractors need to pay their own taxes, and the IRS can’t garnish what it can’t see. Gig economy + cryptocurrency + social media + student loan debt could lead to some very interesting times.

“Interesting time” as in jail time for money laundering and wilful tax fraud?

If 80% of millennials collectively decided not to repay their student loans, there would not be enough space in prison for all of them.

Re: Half of the US government's financial assets are student loans

#129

Post by aggronn » Fri, Jan 12, 2018, 10:05 PM UTC

eemax wrote: post #61

jdoliner wrote: post #32

Anytime the US wants the world to be a certain way but just can't quite get reality to conform debt is our answer. Everyone should be a homeowner but for some reason isn't? Simple, just give them cheap loans for houses. Everyone should be educated but it doesn't seem to be happening? Debt time. Why do we do this? Because it allows us to pretend that complicated long-term structural problems are simple short-term capi…

Well, it does actually solve the problem in the sense that it actually causes houses to be built and students to go to college. Probably this indicates the real problem is more about bad monetary policy and bad tax policy, not a fundamental shortage of resources. Of course, it would be better to improve monetary policy rather than just making a bunch of dumb, risky loans leading to a dramatic boom and bust. But that…

Okay you piqued my interest... "bad monetary policy" usually means we should be on the gold standard, but I've never heard that before as a solution for student loans. What are you proposing is the monetary fix?

Re: Half of the US government's financial assets are student loans

#130

Post by mjevans » Fri, Jan 12, 2018, 10:07 PM UTC

rayiner wrote: post #87

gesman wrote: post #11

Recent reports from the Treasury Department show that the US government owns nearly $1.5 trillion in student loans. That’s pretty sad when you think about it: the US government’s #1 financial asset is debt owed by tens of millions of its young people for university education that didn’t even necessarily qualify them for a real career. Millennials are the most educated generation in history. Yet there are record numbe…

> The Board of Trustees of Social Security tells us that the program is going to completely run out of money within the next 15 years. Millennials’ retirement horizon is far beyond that. That’s not how Social Security works. For practical purposes, it’s pay-as-you-go system: http://www.heritage.org/social-security/report/misleading-th... . As boomers retire, taxes will need to go up to account for the higher ratio of…

The best investment we could make in retirement would /honestly/ be in public owned automation and production of all basic things that don't inherently /require/ human labor.

The sooner we can have a society more like Star Trek's utopian future the better for anyone that wants to retire without being a burden on the current generation. (Even then, I don't think I'd ever want to /fully/ retire, I'd just like to focus on things I actually find fun and meaningful.)