Post by Chicago Jake on Jul 25, 2013 0:22:24 GMT -6
So the Senate has approved a plan to lower student loan interest rates. Sounds like a good thing, doesn't it?
Well, maybe not. Let's start by asking ourselves a few questions:
1. Why is the government setting loan rates in the first place? Isn't that the function of the free market? (Okay, trick question; we haven't had a free market since FDR)
2. If the government is giving students loans at a below-market rate, who is making up the difference? If you answered "we are," give yourself a gold star.
3. If the government is handing out below-market loans to people to get college degrees that won't qualify them for jobs, doesn't that just increase consumer debt AND maintain our level of unemployment? BINGO!
Well, maybe not. Let's start by asking ourselves a few questions:
1. Why is the government setting loan rates in the first place? Isn't that the function of the free market? (Okay, trick question; we haven't had a free market since FDR)
2. If the government is giving students loans at a below-market rate, who is making up the difference? If you answered "we are," give yourself a gold star.
3. If the government is handing out below-market loans to people to get college degrees that won't qualify them for jobs, doesn't that just increase consumer debt AND maintain our level of unemployment? BINGO!
