The student debt bomb

 

In May, 2018 we hit a historic milestone: according to Forbes, student loan debt topped $1,500,000,000.  More than 44 million Americans are carrying student loan debt and it tops all other debt outstanding in the country except mortgage debt.   

From a May report in CNN Money, 42%  of those who finished bachelor degrees had to go into debt with the average being $28,400.  Women hold on average 10% more debt than men and 2/3 of all the debt outstanding is owed by women.    

Courts have made it extremely difficult to get out from under student loan debt if it becomes too much to bear (SBLA).   This is driving some people to leave the country in an attempt to either escape their debts or work their way out from under them (Vice):     

It's a phenomenon that I'm quite familiar with actually," says student loan lawyer and author Adam S. Minsky. "In my experience, people leave because there's a sense of hopelessness and they see greater opportunities overseas, usually through a combination of higher pay and lower living expenses. They think they'll be better positioned to either pay their loans in real time, from abroad, or to save up and be in a better place to address the loans a couple of years from now.

Both of the major parties have tried to grapple with this problem but naturally each has a slant.

The Obama administration offered debt relief programs contingent on working for the government, becoming a teacher or putting in public service as well as some income-based relief (Nerd Wallet).  Their big focus however was going after for-profit institutions:

BDR relieves students of all federal loans if a school used illegal or deceptive tactics to persuade students to borrow money to attend. Gainful employment requires that action be taken — including possible expulsion from the federal student aid program — against vocational programs whose graduates leave with heavy student loan debt. Ninety-eight percent of the programs that officials found to have failed to meet those standards are offered by for-profit colleges.  A program is considered to lead to “gainful employment” if the annual loan payment of a typical graduate does not exceed 20 percent of their discretionary income or 8 percent of their total earnings, my colleague Danielle Douglas-Gabrielle explained here. Exceeding those debt-to-earnings rates means possible expulsion from the federal student aid program. Ninety-eight percent of programs found by department officials to fail to meet the gainful employment thresholds are offered by for-profit colleges.  (Washington Post)

(Which begs the question -  are there no predatory not-for-profit institutions?)

The Trump administration has scaled back the campaign against for-profit institutions, leading recently to:

The top government official overseeing the $1.5 trillion student loan market resigned Monday (Aug 31, 2018), citing what he says is the White House’s open hostility toward protecting the nation’s millions of student loan borrowers.  “The damage you have done to the Bureau betrays these families and sacrifices the financial futures of millions of Americans in communities across the country,” Seth Frotman said. (Huffington Post) 

Neither major party seems to accept that the central problem is a higher education system that forces prospective students into debt and is now fueled by debt peonage.

On both ends of the political spectrum, some recognize this.  Bernie Sanders says education should be tuition and debt free.   In a recent interview with the Wall Street Journal, George Gilder takes aim at vested interests which have profited from the current state of affairs and proposes a radical solution: 

The idea of a “completely providential government” arose in America, and a “whole generation of young people were given college loans in a fabulous national mistake, in which the Republicans participated.” These loans were used by the university system to “increase perks and tenured luxuries and ideological distractions”—all of which led to the “diversity campaigns and CO2 panics” that currently dominate university faculties.

The only way to undo this “vast blunder,” says Mr. Gilder, is to forgive student loans across the board and “extract the money from all the college endowments and funds that were used to just create useless departments and political campaigns.” More than $1.5 trillion in student-loan money is outstanding, according to the Federal Reserve. That money, Mr. Gilder says, “wasn’t deployed to improve education. Not a scintilla of evidence has been adduced that learning has been improved. It was used entirely to lavish on bureaucracies that, in turn, paid tribute to government and leftist nihilism.

Is it possible that the current system does little to make university or college education more affordable?   Instead, does it just raise the market value of higher education by feeding burdensome debt into university and college coffers?

The Modern Whig Party platform is that a public college education should be debt-free.

If you agree, why not join us?  

Whisky's for drinking - water's for fighting

What could be a more important issue for Nevada than water?   A recent interesting article in the Nevada Independent discusses a problem that just keeps getting bigger.  With more urban users, conflicts between the states over water appropriations, and perhaps even climate change thrown in, the bottom line is we're running short of water - particularly in the Las Vegas area.   Based on an interview with John Entsminger, head of the Southern Nevada Water Authority,  this article covers the issue from the standpoint of the largest water user in the state.

“I think a small group of people that are relatively antagonistic to each other have had that discussion for a long time,” he said. “I don’t think it’s been a broader public dialogue.”

When asked if there is room for compromise between the water authority and the coalition opposing the pipeline, locked in a legal fight for decades, Entsminger said: “I hope so.”

He said water users within the state should look to the contemporary history of the Colorado River as an example of where once-feuding water users have charted a path, albeit an uneasy one at times, to self-regulate and avoid legal fights that can take many decades to resolve.

“Within Nevada, we have to evolve to a place where we can have that conversation to be able to say this distinction between agriculture and urban [water] is a false distinction,” Entsminger said. “Our residents buy the agricultural products. So we need to somehow come together as a state and recognize what is good for Las Vegas isn’t bad for everyone else.”

Unfortunately, this sure isn't the view of many in rural eastern Nevada.

As far north as Baker and Border City, ranchers, miners, rural residents and other users are worried and angry that southern Nevada will use their vast resources of money and political clout to run roughshod over their vital interests.   A trip through Owens Valley in eastern California is an edifying example of what happens when this happens; dried up watersheds and aquifers, ruined ranches and communities.  Only recently have they begun to undo the damage.

There's going to be some solution here eventually and perhaps there's time left to find the least bad one.  This is a classic problem where the Modern Whig approach might come in handy:

• Make sure we have knowledge before acting:  The SNWA has been pushing for comprehensive hydrological studies to determine exactly what the state of the aquifers is and to make reliable predictions on how they recharge.  This would be money well spent.
• Use available science and technology to mitigate the problem: For all its sins, Las Vegas does a remarkable job of conserving and reusing water.   For the city to grow however, they're going to have to do even better and resources should be allocated to devising even more ingenious means of saving water.
• Make sure the interests of rural Nevadan's are respected.   If decisions are made solely on the basis of population, money and political clout, rural folk in Nevada and Utah are going to lose big time.   Their voices - those of the people on the ground who will be most affected by water diversion have to be heard and respected.   They need clout in the decision making process disproportionate to their numbers.
• Preserve property rights while respecting the common interest. Water rights are the foundation of any enterprise rooted in the land.  Any solution must work within the context of existing water rights law.  

 What do you think?  How can we make sure Las Vegas has the secure water supply it needs to grow without destroying livelihoods and damaging the environment in eastern Nevada and Utah.

The Nevada Modern Whig Party wants to offer Nevadans a workable, moderate and pragmatic solution to the critical issue of water use.   We would welcome your ideas, perspectives and suggestions on this issue.

Why not sign up here and help us out?

The Modern Whig Party is for Entrepreneurs

The Modern Whig Party is a Centrist, Practical, and Ambitious political party, which makes it the ideal party for you, the Entrepreneur. The Modern Whig Party's values are simple: Integrity, Meritocracy, and Independent Thinking. Here is why I think that those values align perfectly with Entrepreneurial Values.

Integrity: Basic honesty and a commitment to an ethical approach to business is vital for an entrepreneur to succeed in today's business world. Social Media brings constant scrutiny to our leaders and nobody is above the law.

Meritocracy: Society should reward merit. Entrepreneurs grind, drive, push, and pound the pavement. That hard work, combined with intelligence, talent, and competence, deserves both financial and social success. Whigs believe in awarding merit.

Independent Thinking: Entrepreneurs challenge the status quo. The Whig's political process is pragmatic. Whig's review and analyze all possible solutions to a problem.

In addition to Whig values aligning with Entrepreneurial values, The Modern Whig Party advocates for Entrepreneurship education, founded in a long-standing principle in economic development. A Former Whig, and former President said:

Economy I consider a virtue & should be practiced by all; there is certainly no better way in which money can be laid out than in the education of children. -Zachary Taylor

Specific policies on the Modern Whig Party platform are:

• Greater emphasis on and investment in our system of public education so the creative potential of every young person is realized
• Generous grants and contracts to universities and corporations to support scientific research and development
• Maintenance of a sound safety net to promote entrepreneurial risk-taking
• Indirect investment by the general public in the commercialization of new ideas and discoveries through professionally managed public venture funds, with the profits returned to ordinary citizens as a direct "social innovation" dividend
• High schools and colleges teaching entrepreneurial skills and fostering// collaborative teamwork through inter-disciplinary projects.

Are you an entrepreneur that wants to join the Modern Whig movement? 

Sign Up Here