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Oh, dear. And the scary thing is I don’t see any ideaological differences between Chavez and Obama. Obama is our Chavez.
Tag Archives: Communism
Obama to nationalize student loans, how does that work in New Zealand?
Story from CNS News. (H/T Gateway Pundit)
Excerpt:
A bill currently before the Senate would empower the Obama administration to nationalize the student lending industry, eliminating the federally subsidized private loans millions of university students rely on to finance their educations
The Student Aid and Fiscal Responsibility Act – currently being considered by the Senate Health, Education, Labor, and Pensions (HELP) Committee – would eliminate the Federal Family Education Loan (FFEL) program. FFEL loans are federally subsidized and make up approximately 80 percent of the student lending industry.
According to the Department of Education, 14.3 million of the 17.5 million student loans were federally subsidized for the 2009-2010 fiscal year. Under Obama’s plan, the government would consume the entirety of this industry – a total of $103 billion in 2009-2010.
I wrote about the situation in New Zealand before. In New Zealand, they have a government-run system.
Excerpt:
Thousands of people with student loans are defaulting on payments, leaving the Government to chase hundreds of millions of dollars.
More than one in five borrowers – or 114,000 people – have overdue payments and thousands of students are leaving tertiary education with no qualification and big bills.
The Education Ministry’s student loan scheme annual report shows that $306 million in payments is overdue, a $100m increase from a year ago.
The substantial growth includes a big rise in the level of payments owed by people now living overseas, more than doubling to $114m.
New Zealand University Students Association co-president Sophia Blair said it was not surprising that students with loans were heading overseas and letting the bills mount. “You can earn higher wages [overseas].”
[…]Total student loan debt had reached $10.2 billion and is predicted to grow by an average of $875m a year to more than $20b by 2022.
The report also showed about 39 per cent of students who left tertiary education with a loan did so without achieving a qualification.
About 8000 students with loans who left study in 2005 had nothing to show for it by 2007.
Why can’t Obama take into account how radical leftist policies have worked in other countries? Let the free market work. Let people be responsible for their own decisions. Giving people things for free doesn’t make them take their education seriously. When someone pays out of pocket, they try harder, and they take serious courses to earn the money back. When a bank makes a loan, they actually care about getting the money back, so they may insist that students actually perform. On the other hand, the government is notoriously wasteful – it’s not their money. It’s your money.
Chavez marches Venezuela down the road to serfdom at gunpoint
CNN reports that Chavez has devalued the Venezuelan bolivar.
In the wake of his decision to devalue Venezuela’s currency, President Hugo Chavez on Sunday said he would put the military on the streets to ensure that business owners don’t raise prices.
Speaking on his weekly television program, “Alo Presidente,” Chavez railed against merchants who re-price their items in reaction to Friday’s announcement that the Venezuelan bolivar currency, which had been fixed at 2.15 to the U.S. dollar since 2005, was devalued to 4.3 to the dollar. For food and medicine, Chavez announced a second fixed exchange rate for these “necessity” goods at 2.6 bolivares to the dollar.
“I want the national guard in the streets, with the people, to fight speculation,” Chavez said, calling re-pricing a form of robbery.
[…]He encouraged people to publicly denounce businesses where prices increase and threatened to expropriate businesses that do.
The government would transfer ownership of such businesses to the workers, Chavez said.
Yes, attacking and nationalizing businesses with the Venezuelan army will do a lot to create jobs and increase competition among product and service providers. Surely lower prices and increased quality will result from this consumer-friendly policy. And foreign investors will be rushing to Venezuela to invest so they can take 700 million Euro losses in a split second.
Investors Business Daily explains the result of devaluing a currency.
For starters, it’s a tax. “The government has decided to recognize the massive accumulated inflation in the country and is trying to increase the purchasing power of the (dwindling) dollars it has . .. (by selling) dollars to the private sector at a higher price,” explained Hausmann. “In the short run, this is like a tax on the sale of dollars.”
[…]”The poor have no way to protect themselves from devaluation,” said Johns Hopkins University’s Steve Hanke, who has advised previous Venezuelan leaders about currency. “Their only means are awkward and inefficient.”
Meanwhile, the “tax” on dollars “means a transfer of resources out of the private economy to the government’s coffers,” said Hausmann. “As a consequence, the rest of society will have less income.”
Teachers and doctors, already in short supply among the poor, will likely be hard hit, along with small businesses.
Worse, inflation’s likely to surge, another burden for the poor.
Inflation was already on its way to 30% before Friday’s devaluation. Food, which makes up 80% of what the poor buy, has been hit with a 20% immediate increase in price. This effectively lifts inflation for the poor to a devastating 50%.
Costs for other goods, such as car tires, will rise by 100%. A banker in Caracas tells IBD this will push average inflation to 60% — adding to accumulated inflation of 600% over the past decade, a brutal tax on poor Venezuelans.
The very complexity of the new currency scheme will be a nightmare for the poor, says Hanke.
“More regulations will lead to repression,” he said, citing the weakening freedom to spend money. More controls mean shortages.
I think that people who elect communists like Chavez need to be more careful about listening to honeyed words about the benefits of wealth redistribution. When you attack the rich, they stop hiring workers. And if you attack them enough, they leave your country. Communism causes poverty and famine. It always has, and always will. If you want to know where it ends, look at Cuba and North Korea. That’s where Venezuela is headed.
More on this story from Fausta here and here. ECM sent an article about scheduled blackouts here.
Is Obama any different from Chavez on economic policy?
Here they are shaking hands:
Is there such a thing as a secret handshake for communist dictators? Just asking. Not saying that Chavez or Obama are communist dictators. Just wondering if communist dictators have a secret handshake. A communist dictator handshake conducted by communist dictators to congratulate themselves on how well their ignorance of economics “helps” the poor to starve to death.
Here is the currency graph of the US dollar versus the Canadian dollar. A decline of about 20% in 12 months. (The current exchange rate is 1.03301)
How many Canadian dollars is 1 US dollar worth?
January 1.22664 CAD (21 days average)
February 1.24684 CAD (20 days average)
March 1.26275 CAD (22 days average)
April 1.22697 CAD (21 days average)
May 1.15311 CAD (21 days average)
June 1.12458 CAD (22 days average)
July 1.12350 CAD (23 days average)
August 1.08796 CAD (21 days average)
September 1.08182 CAD (22 days average)
October 1.05427 CAD (22 days average)
November 1.05978 CAD (21 days average)
December 1.05366 CAD (22 days average)
I wonder which one knows the least about economics. Chavez? Obama? Or my keyboard? Hmmmmn.
Here is my previous story about energy rationing in Venezuela.
WINTERY KNIGHT 