About Me

In writing the "About Me" portion of this blog I thought about the purpose of the blog - namely, preventing the growth of Socialism & stopping the Death Of Democracy in the American Republic & returning her to the "liberty to abundance" stage of our history. One word descriptions of people's philosophies or purposes are quite often inadequate. I feel that I am "liberal" meaning that I am broad minded, independent, generous, hospitable, & magnanimous. Under these terms "liberal" is a perfectly good word that has been corrupted over the years to mean the person is a left-winger or as Mark Levin more accurately wrote in his book "Liberty & Tyranny" a "statist" - someone looking for government or state control of society. I am certainly not that & have dedicated the blog to fighting this. I believe that I find what I am when I consider whether or not I am a "conservative" & specifically when I ask what is it that I am trying to conserve? It is the libertarian principles that America was founded upon & originally followed. That is the Return To Excellence that this blog is named for & is all about.

Monday, April 30, 2012

Mitt Misses A Chance To Make A Difference On Student Loans

Last week both the Democrat & Republican wings of the one Big Government Party were @ it again – this time pandering to students 18 years old & older re lowering student loan interest rates.
The first problem for Republicans is that BO has once again set the agenda – this time calling for a freeze @ 3.4% interest on federally subsidized student loans.  Of course shortly thereafter Mitt Romney followed along like a little puppy & was only too quick to also approve BO's plan @ a cost to taxpayers of $6 billion.  The interest rate is scheduled to double to 6.8% on July 1 if Congress does not follow BO's call that would extend or freeze the 3.4% rate for one additional year.  Now who believes this new subsidy will not become permanent – who will go first - Republicans or Democrats - to call for the current 3.4% rate to increase next year?  What will be different then?
In fact what is different for Mitt now?  Earlier this year Mitt praised Paul Ryan's GOP budget plan, approved by the House, that allowed the student loan interest rate to return to 6.8% on July 1.  Just another Romney flip flop.
Complicating matters for the GOP is that House Republicans wanting to remain true to their presumptive nominee have also backed the student loan interest rate freeze – again going against their own budget plan previously voted for.  On Friday House Republicans voted 202 to 30 to freeze the 3.4% rate for another year.  Notable among the 30 who showed financial responsibility were as always Jeff Flake & Trent Franks both of AZ, & I'm delighted to say Rob Woodall of GA – all FairTax supporters. 
Those of us involved in improving higher education in America (actually I would first settle just to not have it deteriorate further) know that tuition has risen faster than general inflation for decades.  The student loan subsidies are the main reasons why.  As the universities realize that more & more government money is being provided for education they naturally raise tuition.
Student loan debt is now greater than the combined credit card debt of all Americans.  Our youth leave college with thousands of dollars in student loan debt (see above graph) & poor employment prospects – the unemployment rate of people 20 to 24 is 13%.
With all of this in mind even huge Romney supporter Larry Kudlow, on his Saturday NYC radio program, could not support Mitt's pandering on this one.
Mitt could have made a difference on this issue by forcibly showing how he would stop & then reverse the student loan scourge that has indebted our youth to thousands of dollars of loans while subjecting them to little chance of gainful employment after graduation in fields that no employer has use for.  America needs an inspirational leader who points out how the education system in America must change so that students first take into account the demand for people who graduate in their chosen field & then understand what the expected salary & standard of living will be – for instance graduating petroleum engineers this spring start for an average of $120,000 per year.  There is something to shoot for – being 22 years old with an engineering degree & making $120,000 per year to start.
The right leader could explain that the student loan program is the root cause of the problem of why schools raise tuition faster than inflation & why he is, for a start, letting the program go back to less generous years of subsidy beginning with the return to the 6.8% interest rate on July 1.  It would have been reinforcing had he pointed out that student loan checks are issued by the Department of Education – a Department he plans to eliminate if elected President?
The student loan problem is another long slog in the mindset change that is needed - but you can't get started sooner than today & we missed this chance with Mitt.
This issue highlights that the Republicans are putting forth a presidential candidate who takes the same position as BO on student loans, signed a state government healthcare law that ObamaCare is modeled after, puts even a $50,000 lower threshold on eliminating taxes on interest, dividends, & capital gains than BO does – $200,000 for Mitt & $250,000 for BO for couples, & wants to means test Social Security benefits as further evidence he too is like BO wanting millionaires & billionaires to pay their fair share of taxes as if they don't already.  This from a candidate who says he knows how to grow the economy - oh please.  And this does not begin to mention the political flip flops over the past eighteen years on virtually every other issue. 
Just when I thought that McCain was the worst presidential candidate I had ever seen along comes Mitt Romney & the Republicans are going to put him up as their nominee.  Good luck with that whether Mitt wins or loses.


  1. In Mary Anastasia O'Grady's 5/1/12 WSJ piece she says "Chile is swamped by leftist ideas.
    The common principle: Economic inequality is immoral and the state has an obligation to correct it." Rather than push back against this invitation to tyranny, the right too often cedes the moral high ground to its proponents." Although this article is about what is occurring now in Chile she says
    it is a cautionary lesson for Americans. Don't you wish we (Mitt) could hear this message and do something about it?

  2. Doug

    Yes. Mitt missed a very significant opportunity to specify how to change US entitlement mindset, reduce our debt, and to grow a stronger economy. Why is this so?

    The government should be out of the student loan business. Government involvement increases tuition. Is it fair for taxpayers to subsidize student loans to many who will never pay back in full because they are huge risks? Sounds similar to government housing policy - lending to those least able to pay back. Students choosing study in majors that are not in demand by employers are huge risks. What is a better policy?

    Students should get loans from private banks. If left alone banks will assess the risk reward of a student loan. A bright student with “A”s in calculus and 750 max SAT would be a likely reward for the bank. Contrast this to Ed Department bureaucrats. They poorly check return on investment in large part due to the fact that it is not their money they lend but taxpayer money.

    But what about the very poor? Banks would still perform a similar risk reward assessment and the very poor would also get loans. And how else could one help the very poor? Via school vouchers which Mitt supports. Also via the FairTax which would eliminate regressive payroll taxes on the poor and provide checks to all up to the poverty level to mitigate impact of consumption tax. So the poor would at least live up to poverty level and be able to keep all of their paycheck free of federal taxes.

    Maybe ( not sure about this ) one could argue for a federal role for student loans but it would have to be a tiny subset of who receives now. Maybe only those at poverty level and a TBD minimal SAT score.

    Mitt thus could have made these points and put BO on the defensive. BO would have to explain (lie) why student loans do not increase tuition and why taxpayers should subsidize risky loans as they did for housing.

  3. Doug - Again great post.

    One other thought:

    I read an article few weeks ago that Lenin tried hard to control banks, health care, housing, and education prior to the communist revolution. I believe these were the big 4 in the article. Does this sound familiar?

    Would it be wise for a prominent Republican or strong capitalist independent to compare BO with Lenin? Maybe it would generate much debate and more of the naive electorate would better understand BO's goals.

    Make a commercial with BO with Medvedev and a hot mic moment where he says "Just wait until after the election. By then I will have control of banks, health care, housing, and education. Then I can follow in Lenin's footsteps. But for now I need some time." Medvedev responds "I understand and will relay to Putin. And thank you for following Comrade Lenin."