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Wednesday, November 28, 2012

Trickle Down Bankruptcy

The "irresponsible" future is here.  The graphic at the right shows that today "student loan" defaults (past due 90 days) now exceed credit card defaults.

That's right.

We've told all those irresponsible credit card borrowers with crappy jobs to "get an education" so they could make more money.

So, being irresponsible, they traded their credit card debt for education debt.

Only one small problem - you can't shake student loan debt even in bankruptcy.

The good old US government is glad to loan you money for education as long as you haven't filed for bankruptcy in the last five years.  They don't even bother with asking you what major you're going for.

Poetry?  No problem - here's the $56K USD max you can borrow for that.

Ancient Greek?  No problem.

Basket Weaving? No problem.

Closer inspection of the chart at the right will show that the education "default" bump is following bumps a few years earlier in credit card and other debt.

A sort of consequence of the new "trickle down" bankruptcy.

In this case it trickles down from generation to generation.  Grandparent to parent to child.

Here's a pile of supposedly "free" money - oops, er, its not exactly free, its a LOAN.

But don't worry you can pay it off "later."

At the right is an 8th grade graduation test from 1912 in Bulitt County.

Take a long hard look.

The college grads I meet these days would likely not pass this.

Questions like:

"How many parts of speech are there?  Name them."

"Name and give the capitals of the states touching the Ohio River."

"Define the Cerebrum; Cerebellum."

"Name three rights given Congress by the Constitution and two rights denied Congress."

"Name the last battle of the Civil War."

Today upon college graduation you likely have a substance abuse problem.

You probably take anti-depressants.

You have an average of $26K USD in debt.

And no job.

So not only has inflation ruined the buying power of the dollar, but "educational inflation" has ruined what is learned.

Our schools turn out ignorant fools.

Fools going into debt so that can know less than great grandma did in 8th grade.

Yet great grandma and her generation built the country we live in in large part.  Her generation discovered the transistor without which any of our "modern" devices would not work.  They built the interstate system of roads.  The fought and died in World War I and II.

I doubt a college graduate of today (unless they have a specialized history degree) could tell you much at all about World War I or II.

But at least they know who Katy Perry and Lady GaGa are...

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