7 ms·

Maybe? If it was money owed by the individual, then maybe not? The question is, when do we absolve people of debit while still giving entitlements? If the so

Maybe? If it was money owed by the individual, then maybe not? The question is, when do we absolve people of debit while still giving entitlements? If the some of the money from the entitlement should be used to pay down the debt, perhaps the government is just cutting out the middle man?

kafkaesq 10y ago
The question is, when do we absolve people of debit while still giving entitlements? It's a thorny question, in the general case. But fortunately we can rely on the time-honored constraints of common sense and general decency, in cases like these. For which the factors "Would this force the individual below sustenance level? Are they disabled, or do they have disabled dependents?" are actually pretty easy to assess, and verify.
- civilian 10y ago
  "Common sense and general decency" my common sense and decency is pretty much at odds with yours. You took a loan? Good, repay it. You're an adult, you made a decision. Don't expect any help from others. My sense of decency says that we should probably not allow student loans, since so many people aren't mature enough to understand their impact and calculate the trade-off of taking one. //EDIT: So, my main argument is against the idea that we should use "common sense and decency" to make these decisions. That's stupid, because the majority of people don't understand economics and have a hard time guessing what the second and third order effects of a "nice" action would be. My arguments are a red herring. We should throw out the "common sense" of kafkaesq and I. We're both being stupid when we just poll our values to see what our knee-jerk reaction is. Let's just use a system that has the best outcomes. I'd like the policy that provides the highest outcome of: ("Grows GDP" x "Does not fail it's participants")
  - new_hackers 10y ago
    I would have not been able to attend college without Federal assistance in the form of student loans. I'm a twice degree'd engineer in the workforce for 15 years, and an expectancy to work at least 25 more years. All loans were paid back with interest. My earnings are generally far higher than those in my region that do not have a degree, and I pay higher income taxes accordingly. Do you feel that the reward was worth the risk for the Federal government?
    - justavoice 10y ago
      In your case, yes. But what he's saying is that with the opportunity came the responsibility to pay the debt back, which you did, which some are not doing. With no consequence for bad behaviour, why stop?
    - jessaustin 10y ago
      You were a good risk, and probably could have obtained loans privately without any governmental market meddling. That makes you quite different from the debtors under discussion. Bankruptcy exists for a reason. It was unwise to do away with it for education loans, even though doing so temporarily increased the volume of available education loans.
    - generj 10y ago
      I feel there is a massive difference in funding an engineering student's debts versus an art history major's debt. Every engineering degree typically results in 60K plus jobs straight out of school. I doubt a single engineering student has had their Social Security garnished, and if they did they almost assuredly made enough poor financial decisions I have a hard time feeling sympathy. We need to decide as a society what the point of university is. If our aim is to increase human capital, degrees should be invested in by the government in a way which maximizes that human capital increase. If we argue that university is essential for almost everyone for a republican democracy to work, we should provide or heavily subsidize it rather than using debts. Right now we allow people to take out massive debts which never disappear only to learn things which the market judges as not increasing their human capital whatsoever. I don't have anything against degrees which don't increase human capital, but they are basically luxuries which the government shouldn't intervene to fund. In the mean time the massive rise in student debt has allowed for a huge inflation in spending by university administrations and massive swelling in tuition.
      - mulmen 10y ago
        So the only value of education is to increase the bottom line of the capitalists? The meaning of life is to maximize my contribution to some CEO's yacht? Our declaration of independence states a desire for life, liberty and the pursuit of happiness. It doesn't say anything about maximizing human capital.
  - siavosh 10y ago
    Over the last 30-40 years, particularly post 2008, many people with college degrees can't find meaningful work in their chosen field--say biology, chemistry, business etc. In other words, they may have made a very reasonable decision on the loan as an investment and it just didn't work, it happens. Normally you can file for bankruptcy, but you can't with student loans which is rather odd and points to a more sinister collusion between business and government. My issue with your line of thinking is that I rarely hear the same outrage towards the government doing massive subsidization of private business at tax payer expense (billions of dollars of bail outs for Wallstreet, tax payer funded research with private profit etc). The school of thought that individuals must suffer bad investment decisions without legal protection, but an LLC can with normal government help reeks of an injustice.
    - civilian 10y ago
      Sorry the public voices aren't loud enough--- I'm also against those things. We should've let the banks collapse during the crash of 2008 too. "tax payer funded research with private profit" is a grayer area is, but that's not our point. I have a degree in Biochemistry. After I graduated in 2009 I was unemployed for 7 months while looking for a job--- and when I got my first biotech job, I got fired within two months. I ended up working data-entry, and just feeling like: "wow. This is fucked up. Let's do something else". I took a night class in python and my first software job paid _double_ what my biotech job paid. People can and should continue to problem solve on their situation. We are not passengers in life, we are active agents!
      - antisthenes 10y ago
        You got a developer job after 1 night class in python? Forgive me if I don't take that story at face value as evidence that everyone can pull themselves up by the bootstraps by becoming a software developer/engineer.
        civilian 10y ago
        Okay, the full story: I guess the fuller story is that I had taken AP Java in high school. I took one CS class in college, but I dropped it to prioritize other classes. I also got help from my younger brother, who was graduating with a degree in CS. We had a half dozen skype conversations that helped me get started before the night class started. The night class was 9 months long, but I got my first job about 2/3 through it. I told my instructor that I was bored as shit at work, and had saved up enough that I could try being an unpaid intern for a month in the hopes that I'd get a real job. My instructor sent out some emails, I had five interviews, and one of them offered me a paying job! So I took it. You're right that I had a decent background for it, and that my brother helped me. But I also really wanted it, and I was bored to tears at my job, and it kept me motivated. Everyone can make decisions about their careers and study the trade-offs. And we should encourage that, rather than letting them fall into learned helplessness! Look at this: https://www.reddit.com/r/AskMen/comments/56xkrd/how_to_pick_a_trade_job/ https://www.reddit.com/r/AskMen/comments/56xkrd/how_to_pick_...
  - vkou 10y ago
    Actually, almost all of the time, when you take out a loan, you can choose to repay it, or file for bankruptcy. In the case of uncollateralized loans (Credit cards, utilities), the lender is quite likely to receive next to nothing for it. We just need to make student loans dischargeable through bankruptcy, and all of these problems will be fixed. Lenders will stop lending children hundreds of thousands of dollars to get a European history degree, tuition fees will implode...
    - generj 10y ago
      I agree with this, but there has to be some kind of reasonable time limit where bankruptcy doesn't apply. Otherwise every cunning student will just apply for bankruptcy right after graduation (made very easy because they don't yet have a job and have almost no assets). I'd be OK with bankruptcy ending student debt after a time frame of 5-7 years.
      - new_hackers 10y ago
        Yup, and this is what was happening (AFAIK) and why they added the stipulation that student loans weren't absolved in bankruptcy. Otherwise, why not everyone become a neuro-surgeon? A couple hundred thousand dollars wiped away right after collage, only so they can become paid far beyond reasonable wages afterward and owe nothing.
        brazzledazzle 10y ago
        So it stands to reason that if you create a special class of debt you should have a special class of debt collection. If your income and/or assets are greater than $X then collect. That would keep people from playing the system and keep someone who depends on social security to survive from having their checks garnished. We're so obsessed with stopping cheats in this country we'll cut off our nose to spite our face.
      - vkou 10y ago
        Except that you're setting yourself up for a lot of suffering for the next decade, as your credit rating is destroyed. This cuts you out of a lot of opportunities. Very few people are in a position where they can opt out of having a passable credit rating.
  - kafkaesq 10y ago
    My common sense and decency is pretty much at odds with yours. Yeah, life sometimes gets that way. The thing is, my common sense suggest that, with about 99.99% probability, you've very significantly benefitted (or will likely benefit from) some significant form of public subsidy yourself, at some point.
    - civilian 10y ago
      So, my main issue is with you claiming that you have a monopoly on "common sense and general decency". It's like saying: "hey, my thoughts are also the majority's and they're _nice_!" The majority is commonly wrong, and things that seem "nice" often have nasty second & third-order consequences. I probably have benefited from some public subsidy (Oregon public schools, and the lack of income tax in WA), but I can still argue against the system, can't I? :)
      - kafkaesq 10y ago
        That's not what I claim, at all. And basically it's a slippery slope argument that you seem to be making ("Who's to know if they majority is ever right? And what about all the times they've been wrong? Therefore the whole system is brought into question", in effect). What I was saying was actually the opposite: we need to consider these situations in terms of first principles, and on a case-by-case basis.
  - CJefferson 10y ago
    I feel the deck is heavily stacked against students. Student loans, uniquely, can't be dealt with my bankrupcy. And of course, if you are rich and starting a business, you can put all your risky loans into a "limited company", which means you can make all the profits, and walk away with no debt if the business goes south.
    - yourapostasy 10y ago
      > And of course, if you are rich and starting a business, you can put all your risky loans into a "limited company", which means you can make all the profits, and walk away with no debt if the business goes south. In the US and much of the developed world, the qualifier is not "if you are rich", but "if you are rich and have a banking loan relationship through a business entity". Open a de novo small business for the first time, and you cannot get a bank loan without a personal guarantee. Factoring and business loan companies won't even approach your company until you've been on DnB for a number of years, and even then, when you get into the application process, you will often find a personal guarantee is still required. Where businesses commonly rack up unsecured debt is vendor payables. But those are typically very small until you have a proven payment track record with each vendor. The amount of debt leverage you can access as a generic, new US business entity is much a smaller ratio than you can in real estate loans (which are secured, so no real surprise there).
      - CJefferson 10y ago
        You are right, I did over-simplify quite a bit. But the basic principle holds -- I've long felt that limited companies should be taxed higher than wages, precisely because there is risk taken out and accepted by society, so society should benefit (I realize that's overly short / simplistic)
  - x0x0 10y ago
    Your sense of human decency is you made a bad decision decades ago so now you should starve? That's quite something.
  - tmnvix 10y ago
    > You took a loan? Good, repay it. You're an adult, you made a decision. Loans involve risk for the lender and the borrower. There is no moral obligation to pay back a loan at any cost.
- new_hackers 10y ago
  I think you are trending toward "too-old-to-fail", and perhaps that is the answer?
  - justavoice 10y ago
    That's a good analogy for it - and, like the banks, these people should have to pay the costs of their bad behaviour. But it seems our society is trending more towards rights and less towards responsibility. Big business gets away with it, now individual feel they should be absolved of responsibility too.
- deleted 10y ago
  [deleted]
freehunter 10y ago
Well the problem with social security is it's not really income that can be garnished. It's money that was paid into social security with the explicit promise that you'd get it all back upon retirement. This is garnishing wages in the past. It's kind of like repossessing someone's fully paid-for car and house to pay an unrelated debt. It's something you already owned and was not collateral for your debt, but they're taking it away from you anyway. If you're an American, check your pay stubs. You're paying for social security every pay period. It's not welfare, it's a refund of money the government forced you to pay when you were younger. If they're now taking it away from you, taking away a refund of money they already forced you to pay them years ago, that seems to me like a massive misuse of the social security system. People rely on that for their sole income, secure in the knowledge that they spent their entire lives paying into it.
- h4nkoslo 10y ago
  "It's money that was paid into social security with the explicit promise that you'd get it all back upon retirement" That's not even close to true; there is no legal connection that requires you "get it all back" or that the government can't arbitrarily adjust benefits up and down. In practical terms the program is a transfer from present workers to past workers, it doesn't fundamentally operate as a savings account.
  - freehunter 10y ago
    Practical terms or not, that's the founding principle of the social security program. People can't/won't save for retirements, so we (the government) will take money from them now and pay it back later when they retire. If the government can say "we took all this money from you in the past but won't give it back now", there was literally no point in paying social security taxes.
    - deleted 10y ago
      [deleted]
    - pilom 10y ago
      It makes much more sense if you don't think about SS as a pension. It is a tax you pay to not have old people destitute on the streets. That's all. It isn't a savings account or an annuity. It's a tax to take care of old people today. When you get old, you may be eligible for funding to keep you off the streets. You might not. That is what SS is and should be marketed as.

kafkaesq 10y ago

The question is, when do we absolve people of debit while still giving entitlements? It's a thorny question, in the general case. But fortunately we can rely on the time-honored constraints of common sense and general decency, in cases like these. For which the factors "Would this force the individual below sustenance level? Are they disabled, or do they have disabled dependents?" are actually pretty easy to assess, and verify.

civilian 10y ago
"Common sense and general decency" my common sense and decency is pretty much at odds with yours. You took a loan? Good, repay it. You're an adult, you made a decision. Don't expect any help from others. My sense of decency says that we should probably not allow student loans, since so many people aren't mature enough to understand their impact and calculate the trade-off of taking one. //EDIT: So, my main argument is against the idea that we should use "common sense and decency" to make these decisions. That's stupid, because the majority of people don't understand economics and have a hard time guessing what the second and third order effects of a "nice" action would be. My arguments are a red herring. We should throw out the "common sense" of kafkaesq and I. We're both being stupid when we just poll our values to see what our knee-jerk reaction is. Let's just use a system that has the best outcomes. I'd like the policy that provides the highest outcome of: ("Grows GDP" x "Does not fail it's participants")
- new_hackers 10y ago
  I would have not been able to attend college without Federal assistance in the form of student loans. I'm a twice degree'd engineer in the workforce for 15 years, and an expectancy to work at least 25 more years. All loans were paid back with interest. My earnings are generally far higher than those in my region that do not have a degree, and I pay higher income taxes accordingly. Do you feel that the reward was worth the risk for the Federal government?
  - justavoice 10y ago
    In your case, yes. But what he's saying is that with the opportunity came the responsibility to pay the debt back, which you did, which some are not doing. With no consequence for bad behaviour, why stop?
  - jessaustin 10y ago
    You were a good risk, and probably could have obtained loans privately without any governmental market meddling. That makes you quite different from the debtors under discussion. Bankruptcy exists for a reason. It was unwise to do away with it for education loans, even though doing so temporarily increased the volume of available education loans.
  - generj 10y ago
    I feel there is a massive difference in funding an engineering student's debts versus an art history major's debt. Every engineering degree typically results in 60K plus jobs straight out of school. I doubt a single engineering student has had their Social Security garnished, and if they did they almost assuredly made enough poor financial decisions I have a hard time feeling sympathy. We need to decide as a society what the point of university is. If our aim is to increase human capital, degrees should be invested in by the government in a way which maximizes that human capital increase. If we argue that university is essential for almost everyone for a republican democracy to work, we should provide or heavily subsidize it rather than using debts. Right now we allow people to take out massive debts which never disappear only to learn things which the market judges as not increasing their human capital whatsoever. I don't have anything against degrees which don't increase human capital, but they are basically luxuries which the government shouldn't intervene to fund. In the mean time the massive rise in student debt has allowed for a huge inflation in spending by university administrations and massive swelling in tuition.
    - mulmen 10y ago
      So the only value of education is to increase the bottom line of the capitalists? The meaning of life is to maximize my contribution to some CEO's yacht? Our declaration of independence states a desire for life, liberty and the pursuit of happiness. It doesn't say anything about maximizing human capital.
- siavosh 10y ago
  Over the last 30-40 years, particularly post 2008, many people with college degrees can't find meaningful work in their chosen field--say biology, chemistry, business etc. In other words, they may have made a very reasonable decision on the loan as an investment and it just didn't work, it happens. Normally you can file for bankruptcy, but you can't with student loans which is rather odd and points to a more sinister collusion between business and government. My issue with your line of thinking is that I rarely hear the same outrage towards the government doing massive subsidization of private business at tax payer expense (billions of dollars of bail outs for Wallstreet, tax payer funded research with private profit etc). The school of thought that individuals must suffer bad investment decisions without legal protection, but an LLC can with normal government help reeks of an injustice.
  - civilian 10y ago
    Sorry the public voices aren't loud enough--- I'm also against those things. We should've let the banks collapse during the crash of 2008 too. "tax payer funded research with private profit" is a grayer area is, but that's not our point. I have a degree in Biochemistry. After I graduated in 2009 I was unemployed for 7 months while looking for a job--- and when I got my first biotech job, I got fired within two months. I ended up working data-entry, and just feeling like: "wow. This is fucked up. Let's do something else". I took a night class in python and my first software job paid _double_ what my biotech job paid. People can and should continue to problem solve on their situation. We are not passengers in life, we are active agents!
    - antisthenes 10y ago
      You got a developer job after 1 night class in python? Forgive me if I don't take that story at face value as evidence that everyone can pull themselves up by the bootstraps by becoming a software developer/engineer.
      - civilian 10y ago
        Okay, the full story: I guess the fuller story is that I had taken AP Java in high school. I took one CS class in college, but I dropped it to prioritize other classes. I also got help from my younger brother, who was graduating with a degree in CS. We had a half dozen skype conversations that helped me get started before the night class started. The night class was 9 months long, but I got my first job about 2/3 through it. I told my instructor that I was bored as shit at work, and had saved up enough that I could try being an unpaid intern for a month in the hopes that I'd get a real job. My instructor sent out some emails, I had five interviews, and one of them offered me a paying job! So I took it. You're right that I had a decent background for it, and that my brother helped me. But I also really wanted it, and I was bored to tears at my job, and it kept me motivated. Everyone can make decisions about their careers and study the trade-offs. And we should encourage that, rather than letting them fall into learned helplessness! Look at this: https://www.reddit.com/r/AskMen/comments/56xkrd/how_to_pick_a_trade_job/ https://www.reddit.com/r/AskMen/comments/56xkrd/how_to_pick_...
- vkou 10y ago
  Actually, almost all of the time, when you take out a loan, you can choose to repay it, or file for bankruptcy. In the case of uncollateralized loans (Credit cards, utilities), the lender is quite likely to receive next to nothing for it. We just need to make student loans dischargeable through bankruptcy, and all of these problems will be fixed. Lenders will stop lending children hundreds of thousands of dollars to get a European history degree, tuition fees will implode...
  - generj 10y ago
    I agree with this, but there has to be some kind of reasonable time limit where bankruptcy doesn't apply. Otherwise every cunning student will just apply for bankruptcy right after graduation (made very easy because they don't yet have a job and have almost no assets). I'd be OK with bankruptcy ending student debt after a time frame of 5-7 years.
    - new_hackers 10y ago
      Yup, and this is what was happening (AFAIK) and why they added the stipulation that student loans weren't absolved in bankruptcy. Otherwise, why not everyone become a neuro-surgeon? A couple hundred thousand dollars wiped away right after collage, only so they can become paid far beyond reasonable wages afterward and owe nothing.
      - brazzledazzle 10y ago
        So it stands to reason that if you create a special class of debt you should have a special class of debt collection. If your income and/or assets are greater than $X then collect. That would keep people from playing the system and keep someone who depends on social security to survive from having their checks garnished. We're so obsessed with stopping cheats in this country we'll cut off our nose to spite our face.
    - vkou 10y ago
      Except that you're setting yourself up for a lot of suffering for the next decade, as your credit rating is destroyed. This cuts you out of a lot of opportunities. Very few people are in a position where they can opt out of having a passable credit rating.
- kafkaesq 10y ago
  My common sense and decency is pretty much at odds with yours. Yeah, life sometimes gets that way. The thing is, my common sense suggest that, with about 99.99% probability, you've very significantly benefitted (or will likely benefit from) some significant form of public subsidy yourself, at some point.
  - civilian 10y ago
    So, my main issue is with you claiming that you have a monopoly on "common sense and general decency". It's like saying: "hey, my thoughts are also the majority's and they're _nice_!" The majority is commonly wrong, and things that seem "nice" often have nasty second & third-order consequences. I probably have benefited from some public subsidy (Oregon public schools, and the lack of income tax in WA), but I can still argue against the system, can't I? :)
    - kafkaesq 10y ago
      That's not what I claim, at all. And basically it's a slippery slope argument that you seem to be making ("Who's to know if they majority is ever right? And what about all the times they've been wrong? Therefore the whole system is brought into question", in effect). What I was saying was actually the opposite: we need to consider these situations in terms of first principles, and on a case-by-case basis.
- CJefferson 10y ago
  I feel the deck is heavily stacked against students. Student loans, uniquely, can't be dealt with my bankrupcy. And of course, if you are rich and starting a business, you can put all your risky loans into a "limited company", which means you can make all the profits, and walk away with no debt if the business goes south.
  - yourapostasy 10y ago
    > And of course, if you are rich and starting a business, you can put all your risky loans into a "limited company", which means you can make all the profits, and walk away with no debt if the business goes south. In the US and much of the developed world, the qualifier is not "if you are rich", but "if you are rich and have a banking loan relationship through a business entity". Open a de novo small business for the first time, and you cannot get a bank loan without a personal guarantee. Factoring and business loan companies won't even approach your company until you've been on DnB for a number of years, and even then, when you get into the application process, you will often find a personal guarantee is still required. Where businesses commonly rack up unsecured debt is vendor payables. But those are typically very small until you have a proven payment track record with each vendor. The amount of debt leverage you can access as a generic, new US business entity is much a smaller ratio than you can in real estate loans (which are secured, so no real surprise there).
    - CJefferson 10y ago
      You are right, I did over-simplify quite a bit. But the basic principle holds -- I've long felt that limited companies should be taxed higher than wages, precisely because there is risk taken out and accepted by society, so society should benefit (I realize that's overly short / simplistic)
- x0x0 10y ago
  Your sense of human decency is you made a bad decision decades ago so now you should starve? That's quite something.
- tmnvix 10y ago
  > You took a loan? Good, repay it. You're an adult, you made a decision. Loans involve risk for the lender and the borrower. There is no moral obligation to pay back a loan at any cost.
new_hackers 10y ago
I think you are trending toward "too-old-to-fail", and perhaps that is the answer?
- justavoice 10y ago
  That's a good analogy for it - and, like the banks, these people should have to pay the costs of their bad behaviour. But it seems our society is trending more towards rights and less towards responsibility. Big business gets away with it, now individual feel they should be absolved of responsibility too.
deleted 10y ago
[deleted]

freehunter 10y ago

Well the problem with social security is it's not really income that can be garnished. It's money that was paid into social security with the explicit promise that you'd get it all back upon retirement. This is garnishing wages in the past. It's kind of like repossessing someone's fully paid-for car and house to pay an unrelated debt. It's something you already owned and was not collateral for your debt, but they're taking it away from you anyway. If you're an American, check your pay stubs. You're paying for social security every pay period. It's not welfare, it's a refund of money the government forced you to pay when you were younger. If they're now taking it away from you, taking away a refund of money they already forced you to pay them years ago, that seems to me like a massive misuse of the social security system. People rely on that for their sole income, secure in the knowledge that they spent their entire lives paying into it.

h4nkoslo 10y ago
"It's money that was paid into social security with the explicit promise that you'd get it all back upon retirement" That's not even close to true; there is no legal connection that requires you "get it all back" or that the government can't arbitrarily adjust benefits up and down. In practical terms the program is a transfer from present workers to past workers, it doesn't fundamentally operate as a savings account.
- freehunter 10y ago
  Practical terms or not, that's the founding principle of the social security program. People can't/won't save for retirements, so we (the government) will take money from them now and pay it back later when they retire. If the government can say "we took all this money from you in the past but won't give it back now", there was literally no point in paying social security taxes.
  - deleted 10y ago
    [deleted]
  - pilom 10y ago
    It makes much more sense if you don't think about SS as a pension. It is a tax you pay to not have old people destitute on the streets. That's all. It isn't a savings account or an annuity. It's a tax to take care of old people today. When you get old, you may be eligible for funding to keep you off the streets. You might not. That is what SS is and should be marketed as.