America's pensions can't beat Vanguard but they can close a hospital • Hacker News Board

Re: America's pensions can't beat Vanguard but they can close a hospital

#171

Post by zeroonetwothree » Tue, Feb 17, 2026, 5:02 PM UTC

a_better_world wrote: post #142

jazz9k wrote: post #45

Earlier quoted context omitted.

I disagree about student loans. The entire system needs to be dismantled. Universities don't care if their majors will result in a job and the student loans are a source of risk-free money. They need to start taking on the risk of all student loan, not me, the tax payer.

if college education produces a public good (a more competent workforce), then it should be funded through public funds-- government should pay for education. If it does in fact lead to better outcomes, then the higher tax will cover the cost. running it through the private system builds in too many perverse incentives.

The US government already subsidizes higher education. And all the state governments do as well. So this is already happening.

It’s not at all clear we need to increase the level of subsidy, the rate of college attendance is very high right now compared to past history.

Re: America's pensions can't beat Vanguard but they can close a hospital

#172

Post by chasd00 » Tue, Feb 17, 2026, 5:03 PM UTC

downrightmike wrote: post #118

codexb wrote: post #68

Earlier quoted context omitted.

Ok, but forgiving student loans doesn't do that. It signals to borrowers that they don't have to repay high loans if their career can't support it. It tells borrowers that they can make risky loans without a chance of default. It tells universities that they can keep charging exorbitant tuitions because kids can still get loans to pay them. The solution is to allow judges the discretion to default them in bankruptcy…

Student loans currently carry no risk. They can't be discharged. Interest is the payment to the lender to accept risk. There is no risk in the current state of student loans. Therefore they should never-ever charge interest. Also schools need to be reigned in, if GA et al can pay each student athlete $40,000 a month, they MUST be held accountable for burdening the students and the state with unscrupulous debt.

> Student loans currently carry no risk. They can't be discharged. Interest is the payment to the lender to accept risk.

you make a good point, if there's no risk there should be no interest. Or at worst, the interest rate should track COLA adjustments to social security. Some basic adjustment relative to inflation so the lender gets back what they lent out.

Now that schools can pay their athletes I hope the rest of the student body take notice and start asking questions about school funds allocation. It should make it plain as day to the average student that their school has plenty of cash and choses to force them into debt.

Re: America's pensions can't beat Vanguard but they can close a hospital

#173

Post by steveBK123 » Tue, Feb 17, 2026, 5:04 PM UTC

58028641 wrote: post #95

epistasis wrote: post #74

Earlier quoted context omitted.

So what do you do when your payroll is more than $200k? The depositors were not treating SVB as investment, they were bank accounts for doing transactions.

There are banks that sweep the money across various other banks automatically.

Things I learned in Econ 101 like 25 years ago, and one of about four options if you google "how do companies manage payroll with fdic limits".

But people with [mb]illions of funding just plopped money in a single account ..

Re: America's pensions can't beat Vanguard but they can close a hospital

#174

Post by zeroonetwothree » Tue, Feb 17, 2026, 5:04 PM UTC

Aurornis wrote: post #113

epistasis wrote: post #24

> Larry Summers warned against “moral hazard lectures” and demanded SVB depositors be made whole immediately in 2023, months after calling student loan relief inflationary and unfair. Moral hazard for borrowers, bailouts for banks. Not lost on the public. I can't believe I'm about to say something that could be construed as a defense of Larry Summers, but here goes: bank depositors are not engaging in risky behavior,…

> And as some of who supports the student loan forgiveness, yes, it is slightly inflationary but I think the benefits out weigh the inflationary effects. Being slightly inflationary is a strawman concern. Student loan forgiveness has a major problem in that it’s a large reward the goes only to a specific slice of society who match some arbitrary criteria and who have useful degrees. It also fails to address the root…

Exactly. I don’t know who decided we should spend our limited redistribution dollars on young middle class individuals with above average human capital instead of say on working class people?

Re: America's pensions can't beat Vanguard but they can close a hospital

#175

Post by tristor » Tue, Feb 17, 2026, 5:05 PM UTC

epistasis wrote: post #24

> Larry Summers warned against “moral hazard lectures” and demanded SVB depositors be made whole immediately in 2023, months after calling student loan relief inflationary and unfair. Moral hazard for borrowers, bailouts for banks. Not lost on the public. I can't believe I'm about to say something that could be construed as a defense of Larry Summers, but here goes: bank depositors are not engaging in risky behavior,…

Yeah that quote fundamentally misunderstands what it meant to make depositors whole. That's not bailing out the bank, it's bailing out the depositors, which is exactly what the FDIC is for. In the case of SVB most of the depositors were businesses, but in any case depositing money in a bank is intended to not be a risky activity at all, and FDIC is part of how the government acts to ensure that is so.

Re: America's pensions can't beat Vanguard but they can close a hospital

#176

Post by AnthonyMouse » Tue, Feb 17, 2026, 5:05 PM UTC

drakythe wrote: post #124

codexb wrote: post #68

Earlier quoted context omitted.

Ok, but forgiving student loans doesn't do that. It signals to borrowers that they don't have to repay high loans if their career can't support it. It tells borrowers that they can make risky loans without a chance of default. It tells universities that they can keep charging exorbitant tuitions because kids can still get loans to pay them. The solution is to allow judges the discretion to default them in bankruptcy…

That's why it should be a one time event in conjunction with reworking the whole system. Why can I, as an 18 year old, sign for a loan that _cannot_ be forgiven, graduate into a crashed economy, and still be held accountable for choices that impact me when I only had a small part in them? The system needs reformed, and we need to do something for the people still on the hook of the old system (and I say this as someo…

> Why can I, as an 18 year old, sign for a loan that _cannot_ be forgiven, graduate into a crashed economy, and still be held accountable for choices that impact me when I only had a small part in them?

Because you took the money promising to pay it back, spent it on something you wanted, and now it's gone and someone has to pay the money you spent.

It's like saying why can I, as an 18 year old, purposely drive a car into someone else's house, cause six figures in costs, and then be expected to be on the hook for that because auto liability insurance doesn't cover intentional acts? You're the one who chose to do that.

The price of tuition and the expectation that you pay back the money are not secrets kept from you until after you've already signed, or if they somehow are then maybe fix that.

Re: America's pensions can't beat Vanguard but they can close a hospital

#177

Post by WalterBright » Tue, Feb 17, 2026, 5:05 PM UTC

drakythe wrote: post #124

codexb wrote: post #68

Earlier quoted context omitted.

Ok, but forgiving student loans doesn't do that. It signals to borrowers that they don't have to repay high loans if their career can't support it. It tells borrowers that they can make risky loans without a chance of default. It tells universities that they can keep charging exorbitant tuitions because kids can still get loans to pay them. The solution is to allow judges the discretion to default them in bankruptcy…

That's why it should be a one time event in conjunction with reworking the whole system. Why can I, as an 18 year old, sign for a loan that _cannot_ be forgiven, graduate into a crashed economy, and still be held accountable for choices that impact me when I only had a small part in them? The system needs reformed, and we need to do something for the people still on the hook of the old system (and I say this as someo…

Why should other people be on the hook for your decisions?

Re: America's pensions can't beat Vanguard but they can close a hospital

#178

Post by steveBK123 » Tue, Feb 17, 2026, 5:05 PM UTC

kasey_junk wrote: post #157

epistasis wrote: post #74

Earlier quoted context omitted.

So what do you do when your payroll is more than $200k? The depositors were not treating SVB as investment, they were bank accounts for doing transactions.

Sweeps and obo accounts are the bone simple answer to this that every mainline treasury has used for this problem for at least 30 years. Further the banking ecosystem in the US is predicated on the idea that depositors, especially large ones, are doing their own diligence on the health of the bank.

Yeah but but first principles! /s

Re: America's pensions can't beat Vanguard but they can close a hospital

#179

Post by UltraSane » Tue, Feb 17, 2026, 5:05 PM UTC

epistasis wrote: post #24

> Larry Summers warned against “moral hazard lectures” and demanded SVB depositors be made whole immediately in 2023, months after calling student loan relief inflationary and unfair. Moral hazard for borrowers, bailouts for banks. Not lost on the public. I can't believe I'm about to say something that could be construed as a defense of Larry Summers, but here goes: bank depositors are not engaging in risky behavior,…

Over the last 30 years the primary role of economists seems mainly to be providing justification for the enormous concentration of wealth that has occurred.

Re: America's pensions can't beat Vanguard but they can close a hospital

#180

Post by abeppu » Tue, Feb 17, 2026, 5:05 PM UTC

jazz9k wrote: post #45

epistasis wrote: post #24

> Larry Summers warned against “moral hazard lectures” and demanded SVB depositors be made whole immediately in 2023, months after calling student loan relief inflationary and unfair. Moral hazard for borrowers, bailouts for banks. Not lost on the public. I can't believe I'm about to say something that could be construed as a defense of Larry Summers, but here goes: bank depositors are not engaging in risky behavior,…

I disagree about student loans. The entire system needs to be dismantled. Universities don't care if their majors will result in a job and the student loans are a source of risk-free money. They need to start taking on the risk of all student loan, not me, the tax payer.

If universities should take on that risk, should they also receive some share of the student's future earnings? Do you want all schools to work like the US military colleges, where is admitted you get free tuition but also are agreed to work for the school's parent organization for a period?