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Archive for the ‘student loans’ Category

US Senator Elizabeth Warren and US Congressman Elijah Cummings today announced the launching of the The Middle Class Prosperity Project. Warren pointed out the unequal distribution of income and wealth has been due to the government, which has been rigged (you can say corrupted) to only help the rich at the expense of the middle class.

Warren and Cummings call for reversing some of the inequality which has taken place. Warren pointed out that the government earned over $60 billion in interest from nearly $3 trillion student loans last year, and that this profit subsidizes tax cuts for billionaires. She said that student loans could be renegotiated to reduce the interest rates student pay, and that would help out the middle class. Run! Elizabeth! Run!

Check out the USA Today story by clicking on the link below.

Warren & Cummings: Free the middle class–USA Today

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Wall Street Senator Mitch McConnell embodies only one thing; government corruption to the core.

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From the Huffington Post

“The U.S. Treasury Department on Thursday praised a move, already panned by Sen. Elizabeth Warren (D-Mass.), to increase the amount of money the federal government pays its student loan contractors.

In a speech here to consumer rights advocates, Deputy Treasury Secretary Sarah Bloom Raskin said her colleagues at the Education Department had recently boosted the amounts paid to companies that handle borrowers’ monthly payments in hopes that better financial incentives will drive them to improve their customer service and work harder to help borrowers avoid costly loan defaults. These companies include Nelnet Inc. and Navient Corp., the former loan servicing arm of student loan giant Sallie Mae.

What Raskin neglected to mention Thursday is that taxpayers will fund a bump in pay for the student loan servicers even if their performance does not improve.

In September, under withering questioning from Warren, a top Education Department official conceded that the companies will get more money regardless of any changes they make to their operations. At the time, the senator was incredulous.

“Let me get this straight: You break the law. You don’t follow the rules. You treat the borrowers badly,” Warren said of the loan servicers. “And you all just renegotiated the contracts to make sure that across the portfolio, [loan servicers] are going to make a little more money if nothing changes?”

“The idea of the renegotiation was to help the borrowers, not to make the servicers richer,” Warren told William Leith, chief business officer for the Education Department’s Office of Federal Student Aid, which handles student loans.

With unpaid student debt approaching $1.3 trillion during an era of stagnant wages and low employment, federal agencies including the Consumer Financial Protection Bureau, Federal Reserve and Treasury Department have taken an increased interest in the potential fallout from educational loans. Private-sector advisers ranging from chief executives of banks to Wall Street’s top traders warn that rising loan balances could inhibit U.S. economic growth.”

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The interest rates above are from July 2013, but as of November 2014, they’re still the same. Here are a few basic reasons why the government charges banks and student borrowers for loans at different rates. Also, the rate for student borrowers in the poster above doubled from 3.4 to 6.8 percent. Why?

1. College students who need student loans are typically members of the 99 percent. Rich students do not need loans.

2. Investment and commercial banks are owned by shareholders, the vast majority of which are members of the 1 percent.

3. If interest rates for banks jumped from 0.75 percent (yes, that’s less than 1 percent) to say 6.8 percent, that would cut into the already record profits of the banks, reducing their earnings, stock prices, and dividend payments. That would make the shareholding members of the 1 percent angry with the current government, and politicians wouldn’t want that to happen, because then they wouldn’t receive campaign contributions, other perks, and bribes.

4. Investment banks purchase student loans, issue bonds against the loans, and sell the bonds to rich investors, hedge funds and other financial organizations of the 1 percent.

5. The higher the interest rates paid by students, the greater the return on investment for those rich bond holders since much of the student loan payments made by members of the 99 percent go directly into the pockets of the bondholders. Some of the money goes to paying down the student loans, another portion goes toward servicing the debts, such as adjusting the books with each payment to reflect the status of the loans.

6. Doubling the interest rates of student loans increased the profits of the investment banks, hedge funds, other financial institutions of the 1 percent, and the rich investors themselves, which brings us back to point three.

7. Increasing the profits of the 1 percent makes those people happy, even if it means redistributing massive amounts of money from the 99 to the 1 percent via higher interest rates generates unhappiness among the members of the 99 percent.

8. Doubling the interest rate of student loans increased the demand for student loan backed bonds, raising the value of the bonds by increasing the return on investment, making Wall Street bankers overly happy.

9. The doubling of interest rates on student loans is a scam of the 1 percent, enacted by a remarkably corrupted government by the money of the 1 percent, especially Wall Street.

10. Much of the profits generated by student loan backed bonds are used to corrupt government even further, so that the money of the 99 percent that is being redistributed to the 1 percent via student loans is used to corrupt government even more against the interests of the 99 percent.

Conclusion: Student loans are simply a way for the 1 percent to steal money from the 99 percent and corrupt government even more than it already is.

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President Obama is hardly the worst president in history. He’s had some fine accomplishments, but some of us were dismayed at the president for allowing Wall Street executives to get away Scot free from their massive crimes such as mortgage fraud and money laundering for the Mexican drug cartels, but he did rely on these people for campaign cash. This is the first president in any US financial crisis who directed his justice department not to go after a single one of the alleged criminals. That just shows how corrupt the US government is nowadays, and Obama is a product of his times.

The scorched earth politics of the Republican opposition left millions of people in poverty, and they were led by Mitch McConnell and John Boehner, and they did this all for the political gain of the part of the 0.01 percent the Republicans represent. The Republican Party is the greatest example of corruption in modern American history, but the Democratic party is close behind.

Some of us were sorely disappointed than insurance executives were the creators of Obamacare, and no public option was included in the program.

Some of us were dismayed that 95 percent of all US income growth under Obama went to the 1 percent year after year after year, and the president did nothing about that. But this benefited Wall Street and the 1 percent.

Some of us were disgusted the president continued to press for policies that increased income and wealth inequality, such as the Trans Pacific Partnership, the South Korea Free Trade Treaty, and Common Core. Again, this benefited Wall Street and the 1 percent.

As US Senator Elizabeth Warren said about Obama and his economic team, “They protected Wall Street. Not families who were losing their homes. Not people who lost their jobs. And it happened over and over and over.”

The next recession will be worse than the last, especially for the 99 percent. The economy recovered in an anemic fashion, with demand terribly low because of the inequality of income brought about by federal legislation. In 2008, this nation needed a strong leader, a new FDR, and we instead elected the best candidate either major political party was willing to nominate; we got a Wall Street drone.

We are currently in one of the most politically corrupt times in US history. Money has saturated the political and court markets. The Reagan tax cuts began the corruption. The corporate wing of the US Supreme court was the first serious victim of this corruption.

The truth is that the two major political parties are controlled by different factions of the 1 percent, although some of the factions play roles in the political direction of both parties, such as Goldman Sachs. The two parties divide the American people via social issues, and then the two unite to redistribute the income of the 99 percent to the 1 percent via legislation and free trade treaties.

President Obama is a product of his times. Despite that, and despite vicious opposition from the Republican Party that left millions more in poverty simply for political gain, history will likely remember the president more fondly than either of the Bush presidents, President Ford and possibly President Nixon, as well. However, it is possible he will land in the bottom ten worst presidents of all time. Among modern presidents, since say Teddy Roosevelt, Obama will definitely rank right there above Warren Harding, and very few others, so that in my list of the bottom ten president’s since Teddy Roosevelt, Obama rates among the not so bad, definitely not good category.

The Great Presidents

1. Franklin Roosevelt
2. Harry Truman
3. Teddy Roosevelt
4. Lyndon Johnson
5. Dwight Eisenhower
6. Woodrow Wilson
7. Jimmy Carter
8. Gerald Ford
9. William Howard Taft
10. John Kennedy

The corrupt presidents

11. Ronald Reagan
12. Calvin Coolidge
13. Bill Clinton
14. Richard Nixon
15. Bill Clinton
16. Barack Obama
17. George H. W. Bush
18. Warren Harding
19. George W. Bush
20. Herbert Hoover

Notice those who are the worst president’s were also president’s during the times when the federal government was the most corrupted, the 1920s, and the era from 1981 to the current era.

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Paul Krugman is a typical, and often correct, critic of President Barack Obama. He’s been right on policy decisions on a number of occasions, and most notably, when President Obama has been wrong.

In a new story in Rolling Stone, Krugman has done an about face on Obama and the president’s historical significance.

“When it comes to Barack Obama,” Krugman writes, “I’ve always been out of sync. Back in 2008, when many liberals were wildly enthusiastic about his candidacy and his press was strongly favorable, I was skeptical. I worried that he was naive, that his talk about transcending the political divide was a dangerous illusion given the unyielding extremism of the modern American right. Furthermore, it seemed clear to me that, far from being the transformational figure his supporters imagined, he was rather conventional-minded: Even before taking office, he showed signs of paying far too much attention to what some of us would later take to calling Very Serious People, people who regarded cutting budget deficits and a willingness to slash Social Security as the very essence of political virtue.”

“And I wasn’t wrong. Obama was indeed naive: He faced scorched-earth Republican opposition from Day One, and it took him years to start dealing with that opposition realistically. Furthermore, he came perilously close to doing terrible things to the U.S. safety net in pursuit of a budget Grand Bargain; we were saved from significant cuts to Social Security and a rise in the Medicare age only by Republican greed, the GOP’s unwillingness to make even token concessions.”

All of this is true, and everything Krugman writes in the Rolling Stone appears on surface to be true, but Krugman misses a major point.

Under President Obama, income and wealth equality has skyrocketed. 95 percent of all income growth in the USA over the last four years has gone into the pockets of the 1 percent. Record levels of income and wealth are now in the hands of the 1 percent, which accounts for much lower demand for goods and services, lower job and wage growth, and slower economic growth, all of which hurts the 99 percent, and all of which serves the 1 percent.

The policies the president has championed have played a major role in this.

Free trade treaties, for example, are negotiated with an eye toward shipping US jobs overseas with the difference between the old higher wages and the new lower wages going into the already fat wallets of the super rich via higher corporate earnings, rising share prices and soaring dividends. Right now, as we speak, the president is championing the Trans Pacific Partnership, the largest income redistribution scam of all time. It is a so-called free trade treaty that has been negotiated to jack up prices on goods and services, and lower wages, all of which redistributes income from the 99 to the 1 percent.

Under Obama, student loan interest doubled, and the payments of millions of student loans goes straight into the pockets of those who possess bonds backed by student loans: hedge funds and the rich. With a little work, the president might have stopped this madness.

Obama is not stupid, he knows precisely what he is doing. He’s redistributing income on behalf of his largest campaign contributors, the largest investment banks on Wall Street, hedge funds, and the largest investors of the 1 percent. This is precisely why the president refused to unleash his attorney general against the crimes of Wall Street that brought about the tanking of the world economy five years ago.

And these are just a few of the things Obama has done to redistribute income from the 99 to the 1 percent, something Krugman doesn’t want you to know about.

So while Krugman makes his points in his article, and with passion, his defense of Obama is in very narrow terms.

By the way, despite my critic of Obama, he hardly rates among the worst of presidents. That distinction goes to George W. Bush, the man who created the worst mess in US history. Warren Harding, as well as several others, would have to rate below our current president, as well.

rollingstone.com/politics/news/in-defense-of-obama

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