3 ms·

I have to say that if the economic system is dependent on siphoning off money from young people in the form of student loans, that already sounds like a system

I have to say that if the economic system is dependent on siphoning off money from young people in the form of student loans, that already sounds like a system ready to crumble if those young people aren't able to establish themselves financially. My impression of the US is that it's already too far gone into various collapses to really recover, but I don't know what that means for its future.

nebula8804 4y ago
Who is going to replace it? Some people say China, but then the Zeihan POV says their population is too old, they lockdown every three seconds because they still haven't developed a competitive vaccine, and that capital wants to escape the country at record speed seems to indicate its not China (again according the to Zeihan fanboys). Whats the counter argument? I can't see any country overtaking the US. Maybe everyone collapses into a worldwide depression. Maybe thats possible.
s1artibartfast 4y ago
The economic system is in no way dependent on student loan money. where did you get that impression? It is a negligible part of revenue. The main problem with young people financially establishing themselves isn't the loans, it is their choice in careers/degrees.
- hotpotamus 4y ago
  > The student loan one.. woof. The timing is rough. I know it’s not popular to say, but all those dollars not going to loans are going to contribute to inflation. That was the post above me in the tree.
  - s1artibartfast 4y ago
    I see. I didn't read "contribute" as equivalent to "depends". I can pour gas on house fire, but that doesn't mean it depends on the gas.
    - hotpotamus 4y ago
      I'm sure my wording could have been better, but the thought that student debt is large enough to have material effects on inflation for an economy the size of the US was a bit of a revelation to me.
      - s1artibartfast 4y ago
        The federal student loan portfolio currently totals more than $1.6 trillion. The federal government receives about $70.3 billion in payments for student debt per year[1]. In relation to the 4.4 Trillion in revenue that is about 1.5% of revenue. What is more meaningful is the total amount forgiven, which is around 300 billion of debt of the students balance sheets, essentially immediately [2] That is about 7% of the entire federal revenue. Essentially folks have 70 billion more to spend this year, and also don't need to worry about payments on 300 billion in coming years. The numbers being thrown around during the pandemic are truly staggering and people don't have the context to judge their size in relation to federal revenue. For example, the US spent about $11 Trillion on pandemic relief. That was more than 3 times federal revenue in 2020, which was already a trillion dollars over budget. https://slate.com/business/2021/03/student-loan-total-annual-government-payments.html https://slate.com/business/2021/03/student-loan-total-annual... https://budgetmodel.wharton.upenn.edu/issues/2022/8/23/forgiving-student-loans https://budgetmodel.wharton.upenn.edu/issues/2022/8/23/forgi... https://www.covidmoneytracker.org/ https://www.covidmoneytracker.org/
        hotpotamus 4y ago
        Yep, on those scales it doesn't seem like much of an issue, does it? Also, essentially immediately seems to be doing some work there - didn't Biden already cancel part of it that was challenged in court? And I assume other parts will face court challenges?
        s1artibartfast 4y ago
        I haven't followed the the challenges, but I think the sentiment is that it just throwing gas on an existing fire and digging the hole incrementally deeper.

nebula8804 4y ago

Who is going to replace it? Some people say China, but then the Zeihan POV says their population is too old, they lockdown every three seconds because they still haven't developed a competitive vaccine, and that capital wants to escape the country at record speed seems to indicate its not China (again according the to Zeihan fanboys). Whats the counter argument? I can't see any country overtaking the US. Maybe everyone collapses into a worldwide depression. Maybe thats possible.

s1artibartfast 4y ago

The economic system is in no way dependent on student loan money. where did you get that impression? It is a negligible part of revenue. The main problem with young people financially establishing themselves isn't the loans, it is their choice in careers/degrees.

hotpotamus 4y ago
> The student loan one.. woof. The timing is rough. I know it’s not popular to say, but all those dollars not going to loans are going to contribute to inflation. That was the post above me in the tree.
- s1artibartfast 4y ago
  I see. I didn't read "contribute" as equivalent to "depends". I can pour gas on house fire, but that doesn't mean it depends on the gas.
  - hotpotamus 4y ago
    I'm sure my wording could have been better, but the thought that student debt is large enough to have material effects on inflation for an economy the size of the US was a bit of a revelation to me.
    - s1artibartfast 4y ago
      The federal student loan portfolio currently totals more than $1.6 trillion. The federal government receives about $70.3 billion in payments for student debt per year[1]. In relation to the 4.4 Trillion in revenue that is about 1.5% of revenue. What is more meaningful is the total amount forgiven, which is around 300 billion of debt of the students balance sheets, essentially immediately [2] That is about 7% of the entire federal revenue. Essentially folks have 70 billion more to spend this year, and also don't need to worry about payments on 300 billion in coming years. The numbers being thrown around during the pandemic are truly staggering and people don't have the context to judge their size in relation to federal revenue. For example, the US spent about $11 Trillion on pandemic relief. That was more than 3 times federal revenue in 2020, which was already a trillion dollars over budget. https://slate.com/business/2021/03/student-loan-total-annual-government-payments.html https://slate.com/business/2021/03/student-loan-total-annual... https://budgetmodel.wharton.upenn.edu/issues/2022/8/23/forgiving-student-loans https://budgetmodel.wharton.upenn.edu/issues/2022/8/23/forgi... https://www.covidmoneytracker.org/ https://www.covidmoneytracker.org/
      - hotpotamus 4y ago
        Yep, on those scales it doesn't seem like much of an issue, does it? Also, essentially immediately seems to be doing some work there - didn't Biden already cancel part of it that was challenged in court? And I assume other parts will face court challenges?
        s1artibartfast 4y ago
        I haven't followed the the challenges, but I think the sentiment is that it just throwing gas on an existing fire and digging the hole incrementally deeper.