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Forum Post: Debt Death Spiral

Posted 3 years ago on June 1, 2017, 9:06 a.m. EST by agkaiser (2459) from Fredericksburg, TX
This content is user submitted and not an official statement

Yves Smith at Naked Capitalism posted a short Michael Hudson essay about student loans and debt in general on June 1, 2017:

"A lot of people forget that having debt you can't pay back really sucks. Debt is not just a credit instrument, it is an instrument of political and economic control. ..." Yves Smith

"Bankers sit on the boards of the leading universities – not simply by buying their way in as donors, but because they finance the transformation of universities into real estate companies. Columbia and New York University are major real estate holders in New York City. Like the churches, they pay no property or income tax, being considered to play a vital social role. But from the bankers' vantage point, their role is to provide a market for debt whose magnitude now outstrips even that of credit card debt!..." Michael Hudson


Austerity measures are imposed to reduce debt. Spiraling debt grows and wealth becomes more concentrated because of the interest, which is the profit of those who invest in debt. We go into debt, as does our govt. because we have insufficient income. Debt dividends are the income of the banksters and billionaires who own everything.

Do you really think the banksters and billionaires are going to let us or our government, their two biggest cash cows, get out of debt through austerity or any other means we poor mortals can devise? The debt spiral that feeds the parasitic monsters who own everything is the death spiral for the economy and the human race.



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[-] 1 points by ImNotMe (1488) 3 years ago

'The 'Sovereign Debt Jubilee', Japanese-Style'', by Ellen Brown:

''Waging Love to End Debt's Stranglehold'', by Sarah van Gelder:

radix omnium malorum est cupiditas ...

[-] 1 points by beautifulworld (23316) 3 years ago

Trump & DeVos making student loans more and more difficult to repay.


"Make no mistake: The federal government loves this lending system. In 2012 the Department of Education profited more than $50 billion per year from student loans. This has surely increased. Disturbingly, years of White House budget data confirm that unlike credit card companies, who recover about 10 cents on the dollar for defaulted accounts, the federal government actually recovers more than book value on its defaulted student loans."

Students will be soaked with late fees:


[-] 1 points by ImNotMe (1488) 3 years ago

''Students will be soaked with late fees'' ..& https://www.dailykos.com/story/2017/3/18/1644592/-Betsy-DeVos-and-Donald-Trump-give-lenders-the-go-ahead-to-soak-students-for-thousands-in-late-fees .. is an important link about this terrible matter of Student Debt. The high returns on Student Debt and the Debt Derivatives based on it are nothing short of .. Usurious Parasitism & Unconscionable Wealth Extraction. Happy 4th July to you and yours bw & - fyi ..

multum in parvo ...

[-] 1 points by grapes (5232) 3 years ago

The colleges/universities becoming landlords in gentrifying neighborhoods is definitely a problem. Both Columbia and NYU have greatly expanded their real estate holdings. Gentrification is good for the owners due to increased property values(often driven by rampant credit creation "out of thin air") but detrimental to renters who are forced out by the higher rents. Some landlords' greed knows no bounds. I experienced that myself when I first started out working and renting a place. My rent was tripled on the new lease! I wised up and never rented again. That ridiculous increase in rent occurred at a time that nearly coincided with the abduction and murder of a young teenage white girl walking in the evening alone in the street of a nearby affluent "white and safe" neighborhood. I suspect that the greed led to someone's rage that led to the rape and murder.

The neighborhood near Columbia's new medical campus north of West 125th street may not be all that "safe" despite its gentrification. Beware of the Jubjub. Human minds harbor karma so even dead people(Karl Marx and Vladimir Lenin[the Capitalist will lift sanctions and sell fracking technology so that Russia can gain the economic and political power from the fracked oil and gas and then overrun Europe] were terrible villains leading billions of people astray) "wield" influence through others. It's the most fundamental law of nature - any interaction leaves an imprint that may affect future interactions.

Oh yes, I joined the wealthier people in feeding from the government-furnished trough of mortgage interest deductions and shielded incomes from taxes. Generally speaking, the darker skinned folks were less capable of reaching up to drink from the trough. It's in fact biased towards the wealthier lighter skinned folks. This was how I could tell that flip was Not dark-skinned because he loved the 1970s with its very high inflation rates that made the mortgage debts payable with greatly cheapened dollars. As the Bible said, "the have's shall have even more and the have-not's shall have even less." Everything including this is God's Will!

Trump to the world, the Me-thane is come! Let Earth receive her Ding. Let everyone prepare him shroom.

"They went out from us, but they did not really belong to us. For if they had belonged to us, they would have remained with us; but their going showed that none of them belonged to us." - 1 John 2:19.

Here's the proof of superior French verbal intelligence and the senility of the Winbreaker.

[-] 1 points by grapes (5232) 3 years ago

The FIRE sector gets something from nearly nothing by the creation of credit and loaning it out to form assets. Our government colludes with this scheme and causes inflation, deflation, unemployment, crimes, misallocation of resources, speculations by watching the monetary policy of the credit creating entities, etc.

Most people only see the surface symptoms and clamor for price control, inflation, government-funded employment training programs, more police, smart people going to the FIRE sector creating more nefarious instruments of booms and busts rather than thinking of how to make the overall pie bigger, watching and trading by following the [Non-]U.S. [Non-]Federal [No-]Reserve's credit creation policy statement was more profitable than gauging the actual market conditions to steer the economy properly.

Is it any wonder that our economy keeps on crashing into a ditch requiring bailouts?

I'm not surprised at all. Driving a car by looking at the vanity mirror to discern the minutiae of the driver's countenance will crash the car sooner or later.

As for student debts, I remember a time when public colleges and universities were tuition free. New York and California were so. The 1970's Arab Oil Embargo led to the demise of free higher education and much else. Oh yes, at the root of it all was Abram's adulterous polygamy that led to some Semites wanting to drive the other Semites into the Mediterranean Sea. The Bible said that the Semites had descended from half brothers born of Abram who became Abraham and the Semites' ancestors crossed the Red Sea to escape from the land of Egypt so let God blast His nostrils again and the Middle East antisemitic problem of the Semites will be solved! Maybe shaking the flowers wildly to release a lot of pollens can elicit God's "Gesundheit" response.

Jews may not be the ultimate culprits but they help the devils in the FIRE sector and become the public face of Evilness in the minds of most peoples who have come into close contacts with them. Who acquitted the guilty ones? The Jewish lawyers and judges. Who foreclosed upon the mortgages? The Jewish bankers. Who stopped Adolf Hitler from attending art school? A Jew. Do you see the pattern and the results?

Around the world, there are still many developed countries with free higher education for their citizens. It's an opportunity to hold onto tightly, Not to be passed up lightly - the U.S. doesn't have it.

"But the fruit of the Spirit is love, joy, peace, patience, kindness, goodness, faithfulness, gentleness and self-control." - Galatians 5:22-23.

Nor does the U.S. have national healthcare. The U.S. does have government-enforced purchasing of healthcare insurance by the taxpayers(those who don't buy must pay an income tax penalty) from the insurance companies. Thanks to the severely inbred, stingy, devious, and narrow-minded Retard-I-Can'ts who had argued that we the taxpayers would be free to buy the insurance coverage we truly desired if the government forced us to pay the insurance companies for coverage.

When I was contemplating either working a job or studying in a college, my father said that he liked the co-operative educational system of Germany which had industry involvement in training the students for jobs. He himself at one time went through an apprenticeship in a factory so he was familiar with on-the-job training(though not in Germany). Of course, what Germany had was inapplicable to me because I wasn't nor would likely be there soon at that time(although he had actually considered moving our entire family to Germany but "Germany is Not an immigrant country," he said). He set me up with my first paid gig earning a meager wage.

I went to college instead(not knowing how I would even pay for it all!), eventually taking on an odd-hour near-fulltime job(through my brother's connection[it helps to be related to some people!]) and a part-time job(which ended up being much worse than worthless because my increased earnings diminished my college financial aids and I also got sick; then the medical bill wiped out my earnings and a big chunk of my savings in addition to the pains and sufferings). The going had been extremely tough but I emerged from college debt free, achieving my financial goal despite the cut of college financial aids that I had experienced due to my increased earnings. I know the feelings of having someone shortening and shoving the ladder further down when I tried extra hard to climb up the ladder. This was why I disliked any nefarious injustice done behind the scene. The Trumpanzees may have the same feelings but maybe they haven't had the open-mindedness to see beyond the silvery "0 ba ma freedom" sheet and realize the existence and transreality 》die Transwirklichkeit《 of the Matrix powered by human batteries. "We are hard-working people. We don't have time to look under this sheet," said the working-stiff human batteries who would be flushed to drown in freedom if they had been chosen to be discarded as Neo was.

A great lesson that I had learnt was the money/time tradeoff. I paved over my naiveté and lack of awareness with much money (health Not wealth is almost always more important, considering that I had already taken on fulltime studying and a near-fulltime job["quantity has a quality all its own"]; I should've realized the law of diminishing returns and not to take on the part-time job because I and most people couldn't afford to get sick in the U.S.A.!) but it was worth it because I often gained time and wisdom(health first, wealth later, perhaps - being unable to recall the name of my doctor instantaneously due to not being sick is a great thing!).

I much prefer that learning and earning be decoupled rather than linked concurrently to avoid overloading or Zusammenbruch. Co-operative education akin to apprenticeship may help but a lucrative or at least economically decent career had better be waiting there at the end of it. It shouldn't be abused in the same way as H-1B visas for foreigners that companies use as an excuse to pay low wages to untrained(but only claimed to be highly skilled) foreign labor. Why else would a current American worker be required by their soon-to-be ex-employer to Train for months their own replacement person from India, Canada, or China before being fired? Insufficient job skill level of the H-1B visa holders!

Actually, not everyone needs to go to college to hold down a job competently(yet refinements of the mind probably need the leisure time to pursue the very worthwhile higher education which should not be targeting job training[too narrow-minded]) but the U.S. uses college education as the be-all end-all so-called solution to the employment problem which is really created by the government-industry Anschluß to destroy jobs in the U.S. for its citizens. We must fix that or we are damned!

Reagan got this one right -- jobs for people are very important.

However, jobs assume such importance only in our present money-driven economic system - livelihood is what truly matters - I didn't feel that I was suffering much as a young child when I was eating wild blueberries, sucking nectar from flower buds, or a guava or two, all freebies - I had no "job" except as a proto-Pokémon trainer perhaps, engaging in tournaments of cricket fights with other children's pet crickets. I almost forgot - I was an anthropologist/recycler, too. Using proper decoders, everything tells a tale.

[-] 1 points by agkaiser (2459) from Fredericksburg, TX 3 years ago

1/x as x approaches zero represents the increasing wealth of the rich. 1/x as x approaches infinity represents the wealth and well being of the rest of us as a result.