Tuesday, March 30, 2010

Hey Kids! More "free stuff" from Uncle Obama

I''m going to try to keep this brief, because whenever I think about it, I flip into crazy.

Reporting today at the Fox News White House blog, Row 2 Seat 4: "Obama Alters Student Loan Landscape"

According to the White House, "New borrowers who assume loans after July 1, 2014, will be able to cap their student loan repayments at 10 percent of their discretionary income and, if they keep up with their payments over time, will have the balance forgiven after 20 years."

So here's what that means to me. Even though I've paid into Social Security for 40 years, I'm being told not to expect to receive that money back because Social Security is broke. And Medicare when I'm retired? Forget it. However, college students who have never paid a dime to anyone for anything will now be getting what will amount to "free money" for their education. Free money? Do the math.

Notice the designation "discretionary" income. In my world, that's what is left over to spend once all the necessary bills are paid. So a young person making a modest salary and paying back his or her school loans under this ObamaLoan scheme might pay somewhere around $50-100 a month. 50 x 12 = $600 a year. Say the first 10 years or so they average $500 a year and the second 10 years they average $1,000. That would be about $15,000 over 20 years. That would mean anything over $15,000 in this middle-class person's world would be paid by the taxpayers. ARE YOU KIDDING ME? That is some sweet deal. Here's the quote that keeps going through my head when I hear about this stuff, from Margaret Thatcher: "The problem with Socialism is that at some point you run out of other people's money to spend."

So far, I've heard exactly zero reporting or analysis about this newest ObamaEntitlement that at the last minute was stuck onto the healthcrap bill. So if the federal government is now going to be Uncle Sugar for America's sons and daughters going to college, how soon will we learn that there will be "quotas" for certain degrees or that there will be a small "volunteer" requirement in Obama's Youth Corps to be eligible for the loan? How will they figure eligibility for these loans?

If Obama wanted to take down this country by destroying us with debt, how would he behave any differently than what he's been doing since the day he was sworn into office?

Like I said, the whole thing just flips me into crazy.

P.S. I was just sitting here remembering what it was like when my husband and I were first married and we were paying off our student loans. He was in the military and I was still in school, so I guess I wasn't paying off my loan yet. Every month we were billed $30 on his student loan. That might not sound like much, but our monthly income was only $600 a month, and there was no loan forgiveness or deferment because he was in the military. So again, do the math. We were paying out 5% of our total income--not our discretionary income. And believe me, at that point in our lives, we had no discretionary income. It took us about 15 years, but we finally got those student loans (both of them) paid off in full. That was a proud and happy day, one that evidently any student signing up after 2014 will never know. That's OK, kids, Uncle Sugar will take care of you, because evidently no one expects you to be able to do it for yourselves.

Update. Oh, this is rich. Someone pointed out to me that discretionary income is what you have left over once the bills are paid and you've put some away for a rainy day. There is exactly zero incentive for anyone receiving one of these loans to pay it back--pay as little as possible, kicking the can down the road as long as possible, as long as you pay something--and wha-la, in 20 years it all goes away.

Update #2. Forbes has the details about Obama's new plan. Here's an added "plus": Former students who get jobs in the public sector will have loans forgiven after 10 years, not 20, and the forgiven balance will not be taxable. That would also be known as "selling your soul for a govenrment job." I know someone who did that--an otherwise intelligent person who worked in a government job--and he's the most vacant, uninteresting person I've ever met. He does, however, enjoy two homes that are both paid off.

According to Forbes, under the new plan a single borrower with an adjusted gross income of $30,000 who owes $40,000 in student loans would have the payment dropped from what it would currently be, $460 per month, to $115 per month, which means, in this example, that this particular borrower would pay something under $30,000 and have $10,000 of the loan forgiven. Since anyone who has looked into the cost of a college education these days knows that $40,000 is a hopelessly low figure, taxpayers can expect to be shelling out big bucks for this plan.

Update #3. In related news, from Reason TV: "3 Reasons Public Sector Employees are Killing the Economy."

Reason 1: They cost too much.
Reason 2: We can't fire them.
Reason 3: They're a permanent lobby.

h/t HotAir


nobackindown said...

excellent blog - I like the guy with the hot dog too (-:

Labwriter said...

That's the pic that came to my mind when I wrote the title to the post. Thanks for letting me borrow it.