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

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

#161

Post by _delirium »

fineng123 wrote: post #125
rgbrenner wrote: post #91

Earlier quoted context omitted.

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…

How successful is the risk-selling in terms of getting the risk off the federal government, in practice? I can believe there's some level of success, so sure, 100% of the debt-repayment risk in securities managed by the federal government's mortgage entities shouldn't be counted as really being the federal government's. But the way the 2007-08 mortgage mess played out suggests that in an actual mortgage crisis (which is the only time the risk exposure would be seriously tested), the US government does quasi-officially backstop a large portion of the market in mortgage-backed securities that it manages, so it's shouldering more than 0% of the risk represented by those nominally repackaged-and-sold-off debt instruments.

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

#162

Post by ethbro »

AlexCoventry wrote: post #82
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 company will make a payment to a buyer’s student loans of as much as 3% of the purchase price, up to $13,000. How does this make economic sense? It reminds me of the deals home sellers would make to prop up their numbers in '06/'07.

Presumably because it allows buyers who would not qualify for home loans based on cash flow (impeded by student loans) to be eligible.

Or at least, that's my guess.

I know home loan standards are pretty static, so I'd guess it's to allow indebted students to qualify.

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

#163

Post by adreamingsoul »

noobermin wrote: post #117
adreamingsoul wrote: post #102

Earlier quoted context omitted.

Currently, I serve on two committees with my local City government. I work-trade with local farmers and volunteer with numerous non-profit organizations. I've converted my backyard into an urban farm and have started a composting program with my neighbors. I regularly meet with the Mayor to discuss ideas that could benefit the local community. All of this is in addition to my 9-5. What else should I be doing? Also, I…

You're definitely doing a lot more than a lot of people are doing. I read your last line as defeatist, and probably misjudged you. I will say however that a lot of the issues you talk about are systemic and larger than what can be affected by local politics. Compositing programs won't address there are still large corporate farms out there that contribute the most to climate change. The same is true of recycling, bei…

Thanks. I agree with you about the fact that what I'm doing isn't a direct influence on the bigger issues. However, consumers play a major role in these larger issues.

For example, If we as a society would stop buying cheap food, it would force the hand of these industrial operations to change their behavior.

So I'm taking the time I have now to learn and improve my mentoring and educational skills when working with the local community. In addition to regulation, I also think it's critical that sustainable change occurs from our within society.

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

#164

Post by Density »

matte_black wrote: post #108
ctrl-j wrote: post #38

Earlier quoted context omitted.

> Let’s be clear, students will NEVER be allowed to default these loans, nor should they. They must either pay it or take their debt to the grave and pass it down to their heirs. You wanna try that again with a little empathy?

I have no empathy for bad short term thinking. I could not afford to go to the college I wanted to go to, so I went to a cheaper one I could afford but no one really gives a fuck about. However, it left me with no debt, straight after graduating. Today, as people struggle to pay off loans for universities they once boasted proudly about, it’s clear I made the right choice.

I did the same thing most of a decade ago. That pathway has unfortunately closed since the cheap college i went to tripled their tuition.

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

#165

Post by psyc »

throwaway30yo wrote: post #110
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.

Millenial here. I think things are better then you think. Failing government systems? Have always existed. Unaffordable education? Never went, no idea. Online education still free. Limited Housing and Land? Flyover country, tons of cheap housing and land. Degrading Climate? Yes. But even the most pessimistic projections are unlikely to effect my life. Its a great time to be alive. Country not at war, unemployment is…

I don’t think flyover country is as cheap as it used to be. I’m willing to move anywhere, but after much house searching, the only places I consider affordable now are Idaho and the deep rural south.

I’m with that other commenter who suggested Eastern Europe is much more interesting.

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

#166

Post by buf »

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…

This. I "retired" to Bulgaria last year for 6 months and lived lavishly: restaurants, beach/mountain vacations, travel, shows, massive apartment, etc and found that my cost of living was 1/10th what I paid in San Francisco for less than half the luxury.

I'm only back in the US now for a limited time. I've done the math and found that I need a few more years of work to live in Bulgaria full-time for the rest of my life.

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

#167

Post by bkanber »

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…

Not disagreeing with you, just adding: Debt is not inherently bad. If the concept of debt didn't exist our society would hardly have advanced in the last 2000 years. We owe a ton of our society's development to the fact that bankers exist, otherwise only a handful of people throughout history would have had the resources to build ships, open new businesses, build factories, new technologies, etc, and there would be zero competition.

Student loan debt has ballooned. That's because there are a lot of people going to college that really shouldn't be going to college. And yes, there's some greed involved too: people are willing to take out loans and pay for school, so the schools charge as much as they can get away with. But most schools (believe it or not) reinvest that money into better facilities in order to attract more and higher quality students.

The problem here isn't debt. There are people who want to go to college and who should go to college that need debt to get there. The problem is in the fact that people who should have learned how to weld in high school are pressured to go to college and find an office job, because we've told ourselves (or our parents have told us) that learning a trade is beneath us and that not going to college is awful (it's not).

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

#168

Post by tunesmith »

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…

Buyer beware... "pension system that likely won't be there" is a right wing frame.

In reality, social security very likely WILL be there. But fostering cynicism about it is a prerequisite towards imagining it won't be, which makes it (theoretically) easier to dismantle. "Well it's in poor shape anyway, we should just blow it up..."

There are good informative comments below that are being downvoted, that are about how social security actually works. You just can't seem to avoid political crap here.

There is plenty of good information out there on various easy, non-disturbing ways to tweak social security if necessary. Google some of the ole trustee reports or publications by the late Bob Ball.

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

#169

Post by JBlue42 »

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…

Only a small percentage would have jobs they could take with them / work remote. What would they actually do in Bulgaria or for it? And this is looking past language barriers.

I say this as someone that had a wonderful trip there and like the country and people quite a lot.

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

#170

Post by marshray »

_delirium wrote: post #161
fineng123 wrote: post #125

Earlier quoted context omitted.

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…

How successful is the risk-selling in terms of getting the risk off the federal government, in practice? I can believe there's some level of success, so sure, 100% of the debt-repayment risk in securities managed by the federal government's mortgage entities shouldn't be counted as really being the federal government's. But the way the 2007-08 mortgage mess played out suggests that in an actual mortgage crisis (which…

Maybe the only way to quantify 'moral hazard' at the present time is to count the occurrences of 'Lehman Brothers' in the investment media.
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