simply because people can only borrow so much -- Borrow = future obligation to [repay] = future obligation to [Work] This is why it all makes sense...that is,

simply because people can only borrow so much -- Borrow = future obligation to [repay] = future obligation to [Work] This is why it all makes sense...that is, if you are in a position to profit from the labour of the debtors. Who are these people? (1) Gov't - receives N% of income the debtors are forced to earn to repay the debts; and (2) the Lenders, who receive repayment of the Interest (profit) and principal (capital). In the case of student loans[1] , the profits of (2) are guarnteed by (1). So, its all makes sense. depending on your definition of "sense". =D ______________ [1]Edit/Note: and housing mortages share the same logic. The GSAs have implicit government guarantees. http://en.wikipedia.org/wiki/Fannie_Mae http://en.wikipedia.org/wiki/Fannie_Mae . This is why debt-financed asset price inflation is a characteristic of both [housing] and [university degrees], when considered as "asset classes". The massive GSA's at the heart of the housing crisis were put in place to guarantee mortgage debts, precisely so they could be securitized, sold, and traded as liquid financial instruments.