Posts Tagged ‘Debt’

Wall Street investment corporations purchase politicians so that they will enact legislation that redistributes income from the 99 to the 1 percent. This is true in any number of ways, including debt. Household debt, credit card debt, mortgages, student loan debt, auto loan debt, can all be purchased by Wall Street investment corporations, such as Goldman Sachs and JP Morgan. These corporations take the loans they’ve purchased, and issue bonds against the debt. Then they sell the bonds to rich investors. The payments made by, for example, people who have outstanding student loans, go into the pockets of the rich via these bonds. Wall Street steals billions, perhaps hundreds of billions, via every one of these transactions annually. There are more commissions when the banks purchase home mortgages from lending companies, and then there are billions of dollars more to be made when Wall Street sells the bonds to rich investors. This is why the US government enacted tougher bankruptcy laws seven years ago, and why the government made it impossible to go into bankruptcy on student loans. It’s also why the government doubled student loan interest rates two years ago.


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From Huffington Post,

“Strike Debt, a group of anti-debt activists born out of the Occupy Wall Street movement, said it purchased $3.9 million in delinquent private student debt and immediately canceled it.

The debt, which came in the form of unpaid tuition receivables from Everest College, a for-profit school operated by the Corinthian Colleges chain, was purchased in May for about $107,000, the group said. The purchase was funded entirely by donations.

The Rolling Jubilee Fund, a nonprofit formed by Strike Debt with the sole purpose of buying and abolishing debt, canceled an average of nearly $1,400 in debt held by more than 2,700 students. About 99 percent of the unpaid bills were from last year and 2012.”

Student loans are one of the biggest scams that redistribute income from the 99 to the 1 percent, and this scam was developed by, you guessed it, Wall Street schemers. The schemers figured out that Wall Street investment banks could purchase student loans way back in the early nineteen eighties, and then issue bonds to rich investors backed by the student loan payments made by the loan recipients and guaranteed by the federal government. It was easy money. Wall Street hacks took their case to congress and to President Reagan way back then, and bought favors including sharply reducing federal grants to students, forcing them to take out more student loan debt, and enriching rich investors in the process.

Today student loan debt exceeds $1.3 trillion and surpasses the total amount of credit card debt. Student loans are among the most insidious income redistribution scams.

Click the following link to read more on this. Occupy Wall Street buys and cancels student loan debt–Huffington Post

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Senator Elizabeth Warren’s “Bank on Students Emergency Loan Refinancing Act” bill is up for a vote before the Senate this week. Thirty-five senators endorse the bill. The Wall Street Republican Party will, no doubt, vote as a block against the middle class on this issue. Wall Street and investors of the 1 percent hold billions of dollars of bonds backed by student loans. Lowering student loan interest rates will reduce the value of the bonds, as well as the return on interest paid to the bondholders. In addition, lowering student loan rates on existing loans will also quash the desire to purchase student loan backed bonds, so the best thing for Wall Street and the rich is to artificially keep student loan interest rates higher than would otherwise be the case. Let’s be clear to one thing. Some Democrats will likely vote against the bill. It would be a shock if Wall Street Senator Ron Wyden voted for it.

Check out Senator Warren’s senate floor speech on the Act below.


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What Student Loans Do To Your Mind

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The members and the congress people of the Tea Party were quite happy to destroy the Bill Clinton surpluses by creating the George W. Bush federal deficits, but nowadays they’re mad at President Obama for presiding over the federal deficit they created. Perhaps the Koch Brothers, creators of the Tea Party, are angry because the money the government borrows to cover the deficit isn’t going to the corporate welfare that goes into their pockets. Who knows?

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By Joshua Holland

 Sometime in the next week, Congress will either get it together to pass a new budget resolution or the government will shut down (all but essential services). Two weeks after that, the federal government will reach its debt limit. If it is not raised, nobody really knows what will happen. The only sure thing is that it would roil the financial markets and cause some damage to the global economy.So, we have another fiscal cliff. This contrived crisis is even more irrational than those of the past few years because Republicans in Congress have not only taken a hostage that they can’t shoot, but are demanding that Democrats ditch their signature achievement of the Obama presidency: the Affordable Care Act.

Here are seven things you need to understand about how wacky all of this really is.

1. The plan …

Political observers expect to see some serious kabuki theater in the next few weeks. Speaker John Boehner (R-OH) caved in to tea party pressure and passed a budget resolution last week that includes a measure “defunding” the act.

Senators Ted Cruz (R-TX) and Mike Lee (R-UT) have been attacking House Republicans for not passing such a bill. In all likelihood, they will now filibuster the bill they have been begging for in order to try to block Senate Majority Leader Harry Reid (D-NV) from stripping out the defunding language, which he can do with a simple majority.

Because many Republican senators think this is all crazy – John McCain referred to Cruz as a “wacko-bird” a few months back, and Senate Minority Leader Mitch McConnell, R-Kentucky, said he won’t support the effort — the filibuster will only be a delaying tactic. In the final days or hours before the government shuts down, the Senate will send a budget to the House. At that point, Boehner will either attract enough Republican votes by promising a showdown over the debt limit in a couple of weeks and pass the budget with a bunch of Democratic votes or let the government shut down.

Then there’s the debt limit. Boehner has promised his members that they will get another bite of the Obamacare apple, but he faces a big problem: Obama’s insistence that it is Congress’ duty to pay the bills it ran up, and his refusal to negotiate on the matter.

The Washington Post’s Paul Kane reports that Boehner may hold a vote this week on a bill laden down with conservative goodies — including the approval of the Keystone XL pipeline, Medicare means testing, tax reform and a one year delay of all the health care act’s provisions — in order to get his caucus to raise the debt limit through 2014, but it is not clear whether any debt limit hike can attract 218 Republican votes, especially one that would be dead on arrival in the Senate.

2. Everyone knows this is all a scam …

Everyone in Washington knows that these budget shenanigans have zero chance of success because the vast majority of the funding for the health care act is “mandatory spending,” which means that a shutdown will have no effect. Only a bill passed by the (Democratically controlled) Senate and signed by Obama could defund the health care law, which is about as likely as the Loch Ness monster singing the national anthem at this year’s World Series.

But as The Washington Post’s conservative blogger Jennifer Rubin notes, the outside groups pushing the effort — Freedomworks, the Heritage Action Committee and the Senate Conservatives Fund – are raising big bucks from all this drama. In fact, according to The Huffington Post, the Senate Conservatives Fund “raised its largest-ever monthly total for a non-election year this August.” Democrats are reportedly getting in on the action as well.

3. Plan B …

Ted Cruz offered an alternative this week when he urged the House to continue sending bills funding various elements of government to the Senate. “If Harry Reid kills this bill in this Senate, I think the House should hold its ground and begin passing smaller continuing resolutions one department at a time,” Cruz told Fox News this week. “It should start with a continuing resolution focused on the military. Let’s see if Harry Reid is willing to shut down the military just because he wants to force Obamacare on the American people.”

As Roll Call noted, the House approved a defense authorization bill back in July.

4. “Clean” budget isn’t that clean …

The goal here is to get a “clean” budget resolution through both chambers of Congress and onto the president’s desk. But largely missing from the discussion is the fact such a budget would maintain the crushing cuts of the sequester, representing a significant victory for conservatives.

Democratic congressional staffers told The Washington Post’s Greg Sargent that they would not pick a fight over the sequester-level funding because the budget resolution is temporary — it will only keep the government afloat for three months — and they do not want to shift blame away from Republicans if a shutdown or default occurs.

5. Republicans are deluding themselves about the public’s opinion of Obamacare.

“The American people don’t want the government shut down, and they don’t want Obamacare,” John Boehner said after the House passed its bill. “The House has listened to the American people.” This is a common refrain from Republicans who support the effort to defund the law, and it is a product of being stuck in the conservative media bubble.

The truth is that while Americans are divided on the health care law – with slightly more opposing it than supporting it – poll after poll shows that large majorities disapprove of the effort to defund it by threatening a shutdown or messing with the credit of the US government.

6. No leverage.

John Boehner has all but begged the White House to enter into negotiations to raise the debt limit. But he has no leverage, for two reasons. First, he is on record saying that not raising the debt ceiling would lead to “a financial disaster, not only for us, but for the worldwide economy.” And second, because more than twice as many Americans would blame Republicans in Congress for that disaster than would blame the president.

It’s a weak hand. But he is really caught between a rock and a hard place: He has got little control over his caucus but is set up to be the fall guy if it all goes badly. It is no wonder that it has been widely rumored that he is not interested in another term as speaker.

7. Not raising the debt limit in a timely manner will increase the national debt …

Former Senator and Senate Finance Committee Chair Judd Gregg, R-N.H., explained this irony in an op-ed urging Republicans not to play “Russian Roulette with all the chambers of the gun loaded”…

A default would lead to some level of chaos in the debt markets, which would lead to a significant contraction in economic activity, which would lead to job losses, which would lead to higher spending by the federal government and lower tax revenues, which would lead to more debt.

Federal Reserve Chairman Ben Bernanke said last week that games over the budget and debt ceiling are already hurting the economy.

This article, Seven Things You Should Know About the Wackiest “Fiscal Crisis” Yet, is syndicated from Moyers & Company and is posted here with permission.

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What Has Higher Education Become?

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Big business makes a ton of its money off of or through the government. Take student loans, for example. Thirty years ago, Wall Street con artists convinced federal legislators to cut back on federal grants for students and to increase student loans. That’s because they found a way to profit from student loans. Buy the loans, bundle them, issue bonds against them, and sell the bonds to rich investors.

The money you pay for your loans goes in great part to those investors. In other words, your student loan debt is greater than what it would’ve been in the absence of these bonds, and you’ve become an indentured servant to the investor class the moment you take out a student loan.

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Back in the 1970’s, some Wall Street wizard of scam figured out that investment firms could buy credit card debt, issue bonds backed by the debt, and sell the bonds to rich investors. So that’s what Wall Street did. Part of your credit debt each month goes toward paying the rich investor, and that’s also true for your late payment fees.

Before then, getting a credit card was difficult, especially if you were a member of the 99 percent. When Wall Street investment firms began buying the debt, credit cards became available to just about anybody that wanted one. My four year old kid was offered a pre-approved credit card in 1996, as was Fluff the Cat in 1998. True story.

A few years later after the credit card scam was created, the Wall Street boys figured out that they could do the same thing with student loans. At the behest of investment firms, such as Goldman Sachs, the government under President Ronald Reagan dramatically decreased the funds for grants and increased the funds available for student loans. Wall Street won, the 1 percent won, you and your kids lost. Wall Street and their politicians herded us and our kids into student loans like cowboys herd cattle into a pend to get them ready to be sent off to the slaughterhouse.

Nowadays, your student loan payments are divvied up between those who service the loans and the investors who own the bonds. In other words, Wall Street and their political hacks used government to engineer a massive scam to redistribute income from the 99 to the 1 percent. For tens of thousands, perhaps even millions, of US citizens, student loan debt has kept them in financial servitude to the 1 percent for decades and decades.

Today, total student loan debt is greater than total credit card debt. And you can’t go bankrupt on it because that’s the way Wall Street wanted it. Student loan delinquencies are also greater than credit card delinquencies.

Click below for the true story of somebody who is giving up on paying her $186,000 worth of student loans.

http://finance.yahoo.com/news/true-confession-ive-completely-given-193302452.html (more…)

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The Outcome and Purpose of Student Loan Debt?

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