Tag Archives: Debt

Eight years of socialism: more debt, more regulation, fewer Americans working:

Has the economy been doing well lately? When I ask Democrats that question, they often point me to the stock market. I know that the stock market has done very well in the last 8 years. But I really question which Democrat policies have been responsible for this winfall.

Certainly, policies like Obamacare, Dodd-Frank, green energy subsidies, blocking Keystone XL, creating a student loan bubble, and even loosening mortgage lending again to create another housing bubble, cannot cause any economics growth. My personal opinion is that all the growth came from adding over $10 trillion dollars to the debt – a process that started with the election of Nancy Pelosi and Harry Reid to the House and Senate majorities, respectively, in 2007.

Look at the national debt:

Gross public debt, Democrats control spending in 2007
Gross public debt, Democrats control spending starting in 2007

If you add $10 trillion to the national debt in 8 years then OF COURSE the stock prices will go up. You would look richer too if you took your credit card balance from $8,500 to $18,500. But what is behind all this consumer spending and government spending? Just trillions of dollars of new debt.

I think a better measure of how the economy is doing is to ask job creators how it is doing. For example, we can ask small businesses, since they are responsible for so much of the job creation in this economy.

Here’s an article from the Daily Signal about that.

It says:

More than five years after the end of the “Great Recession,” only 21 percent of small businesses* say they have fully recovered. During the recession, lack of sales ranked as the top problem small business faced. Taxes placed second, and “government regulations and red tape” placed third. And since 2012, at least one in five small business owners identify government regulations as their most important problem.

The reason for this is simple—small business owners directly feel the impact of federal regulation in the daily life of their businesses. The small business owner is often the main person in a business who bears the burden of complying with regulations and paperwork requirements. According to a 2010 study, small businesses spend $10,585 per employee on regulation, which amounts to 36 percent more per employee than larger companies spend.

With that as a backdrop, it is easy to see how small business owners continue to wonder why Washington just does not get it when it comes to regulation. For decades, Congress has sought to solve societal problems through mandates on business. Too many Americans without health insurance? Congress tries to solve that by requiring businesses to provide health insurance to their employees (regardless of whether or not they can afford it) or pay hefty penalties. Too many Americans unable to care for a sick relative? Congress seeks to address that by mandating that a business keep a position open three months out of every year for qualified employees, using a cumbersome reporting system.

Always entrepreneurial, with a keen focus on the bottom line, the American small business owner looks for ways to minimize the time and money spent on things other than running his or her business. Since many of these regulations wisely exempt the smallest of small businesses, some employers purposefully do not increase hiring because they do not want to have to comply with the regulatory regimes that await businesses that expand to 10, 15, and 50 or more employees.

This might be why the labor force participation rate is at a 38-year low.

CNS News explains:

A record 94,031,000 Americans were not in the American labor force last month — 261,000 more than July — and the labor force participation rate stayed stuck at 62.6 percent, a 38-year low, for a third straight month in August, the Labor Department reported on Friday, as the nation heads into the Labor Day weekend.

[…]In August, according to BLS, the nation’s civilian noninstitutional population, consisting of all people 16 or older who were not in the military or an institution, reached 251,096,000. Of those, 157,065,000 participated in the labor force by either holding a job or actively seeking one.

The 157,065,000 who participated in the labor force equaled only 62.6 percent of the 251,096,000 civilian noninstitutional population — the same as it was in July and June. Not since October 1977, when the participation rate dropped to 62.4, has the percentage been this low.

So… do you still think that the economy is in good shape? Any economy is going to look better if you take an $8.5 trillion debt and run it up to $18.5 trillion. But if you look a little closer, you see that small businesses are hard-pressed, and it’s affected the real unemployment rate.

Ideas for higher education reform from a disillusioned professor

We need to reform higher education
We need to reform higher education

A friend of mine who is a full professor sent me this article from the radically leftist site Vox. I was so surprised to find that I agreed with the author – a university professor  – pretty much across the board. See what you think of some of his points about how higher education needs to be reformed, and then I’ll comment at the end.

He complains about the university bureacracy and the office politics, then says this:

I realized not even students were too invested. When my best friend visited my campus to give a talk, he observed one of my lectures. I’ve got many shortcomings as an academic, but lecturing isn’t one of them. I’ve been on TV, radio, podcasts — you name it. By professor standards, which admittedly aren’t that high, I could rock the mic. But while my friend sat there, semi-engrossed in the lecture, he found himself increasingly distracted by the student in front of him.  That student, who like all in-state students was paying $50 per lecture to hear me talk, was watching season one of Breaking Bad. In a class with no attendance grade, where the lectures were at least halfway decent, he was watching Breaking Bad.

Later during that same visit, my friend asked me, in total sincerity, “Why aren’t you doing something meaningful with your life?”

“This is important,” I insisted. But there was no passion behind my words. I was a priest who had lost his faith, performing the sacraments without any sense of their importance.

So why are there so many students who have no interest in university who nevertheless attend in order to get the credential? After all, university is very expensive.

Here is his explanation:

As recently as a year ago, I remained willing to work inside that fractured system of pay-to-play higher education. If students wanted to take out federal loans to buy degrees, who was I to stop them? Let the chips fall where they may; graduate them all and let the invisible hand sort them out.

But that system is unsustainable. Liberal arts programs, and the humanities in particular, have become a place to warehouse students seeking generic bachelor’s degrees not out of any particular interest in the field, but in order to receive raises at work or improve their position in a crowded job market.

Once upon a time, in a postwar America starved for middle managers who could file TPS reports, relying on the BA as an assurance of quality, proof of the ability to follow orders and complete tasks, made perfect sense. But in today’s world of service workers and coders and freelancers struggling to brand themselves, wasting four years sitting in classes like mine makes no economic sense for the country or for the students — particularly when they’re borrowing money to do so.

See, this is not going to make any sense to my readers who have STEM degrees or vocational training. When STEM or vocational training students are in class, we learn, because we expect to have to do the job shortly after. We were not preparing for easy “talking” jobs, we were preparing for “doing” jobs. We were there to learn how to do something for money, not to have fun. We were there to learn how to produce value for customers, not to be indoctrinated by liberal professors holding red marking pens. Many liberal arts students are not there to learn to do a job, they are there to get a credential. In fact, many of the graduates of liberal arts programs these days have to be retrained by their employers.

The author of the Vox article has a solution:

Our federally backed approach to subsidizing higher education through low-interest loans has created perverse incentives with disastrous consequences. This system must be reformed.

When I started out, I believed that government regulation could solve every problem with relatively simple intervention. But after four years of wading though this morass, I’m convinced these solutions should be reevaluated constantly. If they’re not achieving their objectives, or if they’re producing too much waste in the process, they ought to be scrapped. We can start with federal funding for higher education.

The quickest and most painful solution to the crisis would involve greatly reducing the amount of money that students can borrow to attend college. Such reductions could be phased in over a span of years to alleviate their harshness, but the goal would remain the same: to force underperforming private and public universities out of business. For-profit universities — notorious for their lack of anything resembling good academic intention — should be barred altogether from accessing these programs; let them charge only what consumers in a genuinely free market can afford to pay for their questionable services.

Without the carrot of easy access to student loans, enrollments would shrink. Universities would be forced to compete on a cost-per-student basis, and those students still paying to attend college would likely focus their studies on subjects with an immediate return on investment. Lower tuition costs, perhaps dramatically lower at some institutions, would still enable impoverished students eligible for Pell Grant assistance to attend college.  Vocational education programs, which would likely expand in the wake of such a massive adjustment, would offer inexpensive skills training for others. The liberal arts wouldn’t necessarily die out — they’d remain on the Ivy League prix-fixe menu, to be sure, and curious minds of all sorts would continue to seek them out — but they’d no longer serve as a final destination for unenthusiastic credential seekers.

I agree with this idea, in fact I blogged about it before. This is the right solution to the problem. The problem of higher education costing too much will be solved when we stop attaching taxpayer money to students and urging them to attend university. If they want to get a job, then they should be trained to do a job. Only the students who are really interested in liberal arts should be there, and they should have to weigh the costs against the benefits. Maybe we should be taking the student loan decisions out of the hands of the government, and back in the hands of bankers who actually expect the money to be paid back. Or maybe we should give a tax credit to private sector businesses who agree to stake a student through his education, in exchange for working for them for some period after graduation. Anything is better than the mess we have now.

The next bubble that Democrats will burst on taxpayers: student loan debt

Student loans became a huge problem when the Obama administration decided to take the decision about whether to grant the loans away from private sector loan managers and put it into the hands of politicians. Nationalizing student loans allowed Democrats to buy the votes of college students who wanted to get funding for degrees in Why Your Religious Parents Are Evil, which actually turn out to be Four Years of Drunken Hook-Up Sex. The trouble with this vote-buying plan was always how to deal with the loans after the four years are up. Well, how about continuing to buy the votes by passing the cost of the non-STEM degrees onto taxpayers? After all, working families don’t need the money, and it’s much better spent on beer and contraceptives, right? Responsible people don’t vote for Democrats anyway, so let’s just take their money and buy the votes of drunk promiscuous college students.

Here’s the story from the Wall Street Journal.


Virginia Murphy borrowed a small fortune to attend law school and pursue her dream of becoming a public defender. Now the Florida resident is among an expanding breed of American borrower: those who owe at least $100,000 in student debt but have no expectation of paying it back.

Ms. Murphy pays just $330 a month—less than the interest on her $256,000 balance—under a federal income-based repayment program that has become one of the nation’s fastest-growing entitlements. She plans to use another federal program to have her balance forgiven in about seven years, a sum set to swell by then to $300,000.

The promise of forgiveness is “the only reason I would have ever considered” amassing so much debt to attend Tulane University Law School, says Ms. Murphy, 45 years old. She earns $56,500 a year as an assistant public defender in West Palm Beach.

The doubling of student debt since the recession, to $1.19 trillion, has stoked a national discussion over how to rein in college costs and debt and is becoming a major issue in the 2016 presidential race.

$300,000? That’s no problem. it was so good that we got Nancy Pelosi and Harry Reid to spend more money in 2007:

Taxpayer money useful for buying the votes of dependent people
Taxpayer money is useful for buying the votes of dependent people

(Click for larger image)


Federal programs allow grad students to borrow essentially unlimited amounts—whatever their schools charge—while requiring only a scant credit check and no assessment of their ability to repay. Other government loan programs, such as those for undergraduate students and home buyers, set loan limits to prevent borrowers from getting too deep into debt. Undergraduates are capped at $57,500 total in federal loans.

As graduate-school enrollment swelled over the past decade, the number of Americans owing at least $100,000 in student debt more than quintupled to 1.82 million as of Jan. 1, New York Federal Reserve data show. The number of all student borrowers nearly doubled to 43.34 million.

[…]The federal student-loan programs are designed to generate revenue for taxpayers, and they do. But surging enrollment in the debt-forgiveness programs recently prompted the government to increase by $22 billion its estimate of the long-term costs of the provisions. And a recent move to expand the most generous repayment program to millions more borrowers will cost an estimated $15.3 billion.

Critics say offering unlimited loans to students, with the prospect of forgiveness, creates a moral hazard by allowing borrowers to amass debts they have little hope or intention of repaying, all while enriching institutions and leaving taxpayers to pick up the tab.

Moral hazard? What’s that? Maybe Hillary Clinton knows.

She has announced an interesting plan about how to deal with people doing useless degrees that are really just a lot of drinking, partying and promiscuity. More spending to buy more votes – transfer well from responsible working families to drunken promiscuous students studying non-STEM degrees, because STEM degrees that will actually get them jobs are too hard.


The hard truth on the student-loan crisis is that the problem is not being caused by a lack of money. It’s quite the opposite. A recent study by the New York Federal Reserve validated the long-held concerns of many economists and policy analysts alike when it found that “on average, for a $1 increase in the subsidized-loan cap, tuitions rose by as much as 65 cents.” In short, there is too much money available for the taking by colleges and universities because of generous government loans. This is driving up tuition prices. If the government just keeps increasing how much it is willing to lend students, where is the incentive for schools to control costs? Universities are currently engaged in an amenities arms race to attract students and their loan dollars. One need not look any further for evidence of this than ESPN on a Saturday afternoon in the fall or a student-life brochure. Texas Tech University has a waterpark on campus for goodness’ sake, and LSU is racing to finish one as well. How is $350 billion more dollars for universities to waste a solution of any sort? Mrs. Clinton’s preferred channels for delivering these funds are problematic as well. First, the plan calls for a cut in loan interest rates. Is this seriously something we’re willing to let politicians continue to get away with? Did we learn nothing from the housing crisis? Interest rates aren’t arbitrary figures without purpose — they are supposed to measure the risk of the borrower’s not being able to repay the lender. Judging by the severity of the present student-loan crisis and the number of defaulters, it’s safe to say interest rates are already too low. Additionally, interest rates are the price of borrowing money. Let’s think back to Economics 101 and remember what happens to demand when prices go down. How do we solve the crisis of rampant student loan debt by making it easier and more attractive to get into? It doesn’t matter if the interest rate on $150,000 is zero percent when you still owe $150,000 and you’re unemployed. Students don’t need a lower interest rate. They need colleges to constrain spending. Further, they need high-paying jobs. Of course, the Clinton plan only makes the latter problem worse as well. Under the Hillary’s plan, states will be encouraged to offer “no loan” tuition at four-year universities and free two-year community college through the promise of federal tax dollars. Of course, those tax dollars will have to come from somewhere. This is yet another drain on private business whose resources could otherwise be creating jobs for existing unemployed and underemployed students and graduates. Some will say this part of the plan helps students, but on net the economic drag remains the same, with the burden of education inflation simply shifted from students to their potential employers.

She is obviously well-versed in how economics works, and not just some talentless clown who married a hot male slut and then turned a blind eye to his philandering so that she could get affirmative action appointments on her way to an affirmative action presidency. Most sexually-transmitted diseases don’t affect your judgment at all. So stop worrying, America. Everything is going to be fine.

Why is it that whenever we have elections, people on the left have nothing more to offer us than schemes to buy votes by shifting money from winners to losers? They have no idea how to grow the economy, create jobs, promote marriage and families, and disincentivize irresponsible, reckless behaviors. It’s all about borrowing from people in the womb, to pay for free stuff for losers, in order to get their votes. This inter-generational theft is evil. It is enslaving the unborn to serve the whims of new masters. Slavery is wrong.

Who’s better at managing money – Republicans or Democrats?

One of the best jobs for managing money is being governor of a state. So, let’s take a look at the 50 states and see which ones have the best governors for managing money.

Here’s a new report from George Mason University, and it’s written up in Investors Business Daily.

IBD says:

A new report from George Mason University’s Mercatus Center ranks all 50 states based on 14 measures designed to determine whether states can pay their short-term bills and meet their long-term obligations — debt, pension liabilities and such. The data go through 2013.

The best-run states have enough cash to pay its current bills, enough revenue coming in to meet its fiscal year needs, a cushion for economic shocks, and management long-term liabilities.

The worst states, in contrast, have “tens, if not hundreds, of billions of dollars in unfunded liabilities — constituting a significant risk to taxpayers in both the short and the long term.”

[…]There’s only one factor these fiscal winners and losers share in common. And that’s their political leanings. Of the top 10 states in the Mercatus ranking, just two — Florida and Ohio — voted for the Democratic presidential candidate in the past four elections, and just one — Montana — has a Democratic governor. Even if you look at the 25 best-performing states, only three could be considered reliably liberal.

At the other end of the list, just two of the 10 lowest-ranked states — Kentucky and West Virginia — have voted for the Republican in the past four presidential elections. And while four of them have Republican governors, they all are in solid blue states and all were elected to clean up messes left by their Democratic predecessors.

It’s also worth noting that these same states consistently show up at the top and bottom of other lists that measure business friendliness, tax burden and economic freedom.

In fact, six of the 10 worst-performing states in the Mercatus ranking — California, New York, Illinois, New Jersey, Massachusetts, and Connecticut — are also states with the heaviest tax burdens and rated the least business friendly, according to rankings from the Tax Foundation and Chief Executive magazine.

It would appear, then, that abiding by a philosophy of limited government, lower taxes and fewer regulations leads to growth, prosperity and fiscal soundness.

Here’s the full map from the George Mason University study:

George Mason University study on fiscal solvency
George Mason University study on fiscal solvency

At the state-level, everyone understands that Republican governors know what they are doing, because they understand economics. So then why do we forget that and elect a community organizer when it comes to the Presidency? Do we just not care about the debts we are piling onto our children when we elect wastrels and profligates?

Bobby Jindal: policies of Hillary Clinton and Bernie Sanders are the same as Greece

Louisiana Governor Bobby Jindal
Louisiana Governor Bobby Jindal

Here’s an excellent editorial by Louisiana governor Bobby Jindal in left-leaning Time magazine.

He writes:

It’s simple math to understand what is happening in Greece right now. When Greece joined the euro, it benefited from the financial support of its more fiscally responsible neighbors in the euro zone. Rather than taking the opportunity to enact the structural reforms that could have increased growth — reforms that it still has not undertaken — Greece instead went on a spending spree funded by other people’s money.

Greece has been cooking the books with complicated financial instruments for years. But the problems don’t stop there. Greece’s Rubik’s Cube tax code and rampant corruption make tax evasion widespread. Golden parachute public pensions that allow public sector workers to retire as early as 45 drain dollars out of the government coffers while incentivizing a still healthy and work-age workforce to live on the public dime. It’s hard to have sufficient tax paying workers when about 75% of Greek public-sector employees retire by the age 61.

Did the new socialist government run by 40-year-old child Alex Tsipras fix anything?

They made it worse:

After taking office in January, the Alexis Tsipras administration reversed promised privatization of state-owned assets like the Port of Piraeus. In 2011, the IMF predicted Greece could bring in 50 billion euros ($56 billion) from the sale of state assets, not to mention the savings from moving those employees off the public wage and benefit system. To date, it has raised about 3 billion euros.

Business has no interest in creating jobs when crushed by government regulation. Tspiras promised to raise the minimum wage, despite the economy spiraling out of control. It’s not surprising the March unemployment rate stood at 25.6%.

Privatization is a thing that conservatives do, because we don’t like the idea that government workers get automatic pay from compulsory taxation. We prefer that whoever is providing services be in the private sector, as independent from government influence as possible. That way, they actually have to compete with other providers to earn your money – something a government monopoly never has to do.

Anyway, back to Greece socialism. Who would be stupid enough to raise taxes, raise minimum wage, increase spending and promise people more free stuff as a way of getting out of debt?

These two unqualified clowns, that’s who:

Clinton and Sanders are math deniers, like most of the Democrats in D.C. They want to grow the government economy instead of the real American economy. Rather than pursuing tax reform to improve growth or entitlement changes to reduce future expenditures, Clinton and Sanders are focused on spending trillions on Obamacare, giving free college to everyone, and raising the federal minimum wage.

Since January 2007, Democrats have added well over $10 trillion to the national debt, running it up to $18.5 trillion, higher than the entire GDP of the country. What have we got for that? Fewer people in the labor force, and more people dependent on government, that’s what. But oh, you can marry your siblings and pets now, because lurve, so that’s something.

OK, so let’s talk about Bobby Jindal. Initially, I had him slotted in as my #2 candidate with Scott Walker on top. But Walker has had two months and hasn’t done anything super conservative. Meanwhile, Jindal has offered a lot of red meat to conservatives on marriage and right to life, and now we have this aggressive condemnation of socialism, too. I think Jindal is now my top pick, and Walker is next, then Cruz. Fiorina is looking better at this point and is #4, and Rubio is off my list entirely.