Lars Larson: Another $1 trillion bubble

by Lars Larson

Would you believe America is staring down the barrel of another $1 trillion bubble?

It’s a trillion dollar bubble. Not houses this time, not automobiles, but higher education. Last year alone, United States college students borrowed $117 billion. Now some of that was probably for jobs that will easily pay back those loans: doctors, engineers and scientists.

But an awful lot of it is loaned to young men and women, who for all the right reasons, go off to college but don’t know exactly what they’re going to do. And the education they get isn’t worth the salary that will easily pay back those loans. That means there’s going to be a bubble.

The total amount of U.S. student loan debt now stands at $1 trillion. And when a lot of those young men and women come out into a workforce, even if the economy takes off again, that does not supply the jobs they need to pay the money back – guess who’s on the hook?

That’s right – you and me – the taxpayers.

For more Lars Larson, visit Lars’ web site

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Posted by at 05:08 | Posted in Education, Taxes | 32 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Jancascade

    The bubble is bigger than thought.  Many laid off middle age peopel were convinced to return to college to improve their skills.  They took out student loans and now the government is garnishing their social security checks.

    When government gets involved things always seem to spiral out of control.

    http://www.washingtonpost.com/business/economy/senior-citizens-continue-to-bear-burden-of-student-loans/2012/04/01/gIQAs47lpS_story.html?wprss=rss_homepage%3f

    I would not advise kids to even start college unless the know that they want to do and how much the job pays.  They would be better off working and taking community college classes for a few years after high school.  Continue your education, but do it the smart way and stay out of debt.

  • Bob Clark

    When government offers up its treasury to finance demand in an industry, the end result is usually not good for economic efficiency and therefore prosperity.  This is because, suppliers to the industry seeing such a huge buyer do not offer up more supply but rather demand higher prices.  Government sometimes even makes it difficult to expand actual supply volume through over regulation.

    The most vivid example for me of destructive government interference was the 2000/2001 western electricity crisis when California’ governor Grey Davis decided to throw California’s treasury behind buying (demand) electricity supplies at a time when electricity supplies were nearly fixed.

    A better way for government to help an industry is from the supply side.  Lowering barriers to entry, deregulating the industry, and keeping tax rates stable and constant.

  • valley person

    Ignorance must indeed be bliss.

     

  • Ramalama

    That’s right. Those young women and men could skip college and just become right-wing radio hosts, where they don’t have to use research skills because they can just make stuff up. In fact, the more they make up, the more their audience will eat it up.

    • valley person

       The only bubble here is the air in Lars head.

      • Jim karlock

         I’ll bet Lars does more homework every day than you did to get your advanced grade school degree.

        He is even well studied enough to be able to articulate why he does NOT believe in AGW, unlike you, who has never been able to articulate the evidence for your position. (Excepting, of course the religouos argument that some authority told me so.)

        Thanks
        JK

        • Ramalama

          Jim,

          If by “homework” you mean “looking up the days right-wing talking points,” you may be correct.

          If you mean actual research, though, it’s clear that Lars either does very little, or he ignores information that contradicts the right-wing line.

          As for the evidence for human-caused global warming and climate change, we know that temperatures have been rising, we know that the amount of carbon dioxide has been increasing due to human activity, and we know that carbon dioxide has a “greenhouse” effect.

          Lars is studied enough in right-wing talking points to be able to spout them, but I doubt he has any understanding of what’s going on.

          But I’m sure he’s handsomely paid to spout those talking points, so, in a sense, he’s doing his job.

          • valley person

             Don’t get Jim started on global warming. He won’t accept any of your factual premises.

          • Jim karlock

            Ramalama : If you mean actual research, though, it’s clear that Lars either does very little, or he ignores information that contradicts the right-wing line.
            JK: I see you are quite certain that Lars ignores information, give us a few of the many examples you must have to make such a sweeping claim.

            Ramalama : As for the evidence for human-caused global warming and climate change, we know that temperatures have been rising, we know that the amount of carbon dioxide has been increasing due to human activity, and we know that carbon dioxide has a “greenhouse” effect.
            JK: And we know that correlation DOES NOT prove causation.
            But if you like correlations, solar cycles are much better correlated to climate than CO2.
            And you have to explain the pause in warming as CO2 increased in the 60s and in the last 10 years.

            Do you know of any actual evidence that man’s CO2 is causing dangerous warming? (Dean sure doesn’t, it is just a religion with him.)

            Thanks
            JK

          • valley person

             “And we know that correlation DOES NOT prove causation.”

            The way science works Jim, is theories are advanced and proven with observation and/or data. The fairly precise measurement of the amount of C02 it takes to raise global temperature by X has been proven for well over 100 years. The amount of C02 in the atmosphere has measurably increased by something like 35%. The global temperature has increased by about an amount proportional to this increase.

            That is good enough correlation to BE causation for every major scientific body on the planet. The fact it isn’t good enough for you is immaterial. 

          • Jim karlock

             Dean Apostile——– The fact it isn’t good enough for you is immaterial.  
            JK———————-Good to se eyou finally coming around to the sun as the cause of global warming because the solar cycle is MUCH BETTER correlation to climate than CO2 ever was.

            Quit being a fool and actually look at evidence.

            Thanks
            JK

          • valley person

             Which must be why every major scientific academy on the planet has agreed with you. No? Or wait…how about a single one? No again?

            So guess what? Your theory is bunkum Jim. 

          • Jim karlock

            You are relying on the high priest to tell you how to think.
            Learn basic logic.
            Learn the difference between data and rhetoric.
            Learn to look at the data.
            Learn to analyze data,
            Learn to think and quit being a zombie!

            Thanks
            JK

    • Just doing the math

      Yes, and in the Land of Lars, research skills are not
      a job requirement.

      • Jim karlock

        Care to give us some examples of factual errors that Lars has made?

        (I’ll bet he has made a few AND that you don’t have a clue.)

        PS: I heard Randy Rhodes say the newest CRU email was 10yr old. She didn’t bother to read any of them, she just repeated Al Gore’s lie!

        Thanks
        JK

        • 3H

          One comes to mind..  he made the claim on OC that oil companies do not get any special tax breaks.  That was wrong.

        • Ramalama

          I’ve heard Lars claim that nearly all of the terrorist acts of the last 40 years have been by Muslims.

          I guess he’s forgotten about the IRA, about Oklahoma City, about The Order, about the abortion clinic bombings and shootings, and about the death squads in Central America in the 1980s.

          About a year and a half ago, Lars claimed that the U.S. Senate held hearings on Senator John McCain’s citizenship. The article was quickly taken down when it was pointed out that this was a complete fabrication, but there was no acknowledgment that what Lars posted was a lie.

          Lars once claimed that alcohol kills more people than cigarettes. It turns out that cigarettes kill about 10 times more people than alcohol. 

        • Just doing the math

          If you actually read my very short
          reply to Ramalama, I commented
          on research skills not being a job
          requirement in Lar’s world.

  • George

    You cannot escape the debt of governement backed education loans.  You can’t charge it off in bankruptcy and it does not expire.  They will garnish your tax returns and eventually your wages. 

    I do see a slight point that our k – 12 system guides more kids to go to collegee when it is not necessarily a good fit for them on a personal level.  But this is not really the same thing as a “tech” bubble or “real estate” bubble.

    • Ardbeg

      5% of student loan debt are senior citizens.  Paying off student loans with your retirement money-that’s a depressing thought.

  • Jancascade

    Am was not advocating never going to college, but taking the time to experience life on their own before mortgaging their futures.  Most kids have never earned their own money or had to manage their spending.  I think taking an 18 yr to a college campus is like taking a 5 yr old to Toys R Us and expecting them to price shop and weigh the value of the money they are spending.

    • 3H

      I’m not convinced that is necessarily true.   I’d like to see the statistics on how many kids have part-time jobs when they graduated from High School.  Even if they didn’t, I’m pretty sure that many have worked summer jobs.

      Also, in large part, much of that debt is also incurred at the graduate school level where grants are much more difficult to come by, and tuition tends to be higher.   I’m pretty sure (without evidence to back it up) that by the time most students have reached graduate school.. they have worked, managed a budget and many, if not most, are living on their own.

      • valley person

         You have that right. Undergraduate debt is pretty manageable for most. But graduate debt is a lot harder. Unfortunately what used to take a BS or BA now takes an MS or MA. In my office, 13 out of 15 of us have advanced degrees, and all the ones here under 40 have substantial debt loads. They can manage these if they stay employed, but it severely crimps their other economic options, from buying a car or house to recreation. This is a problem for them, but a larger problem for a consumer driven national economy. In effect, we are transferring enormous amounts of income to bankers and lenders because we decided to defund public higher education and rely on increased tuition to cover the cost.

        It isn’t a bubble. Its more like a crimp.

  • Educationman

    All students should go to college to see if they have what it takes. Our society no longer needs workers with no skills. We are losing all our manufacturing. We are a knowledge society and businesses are now all about knowledge. So, if you can’t get a college degree good luck finding a job.

  • Just doing the math

    So, what do you expect people to do? Just not
    go to school? Instead of foaming at the mouth
    why not offer a solution?

  • Rupert in Springfield

    Yep, if you are against excessive student loans, then you are against college. This is the sort of idiotic argument I am seeing here.

    It would be nice if people on the left could actually make a cogent argument rather than this kind of nit wit stuff.

    Here is my cogent argument – When I went to college the maximum allowable student loan was $2,500 per year.

    At that time an expensive college was $10,000 per year

    When I graduated, it was in a higher paying profession, electrical engineering, average starting salary was $25k per year.

    In other words the maximum student loan was 25% of a four year degree ($2.5k x four years = $10 which is 25% of $10k per year times four years)

    Or, looked at another way the maximum student loan was 40% of starting earnings for the highest paid profession obtainable with a four year degree (electrical engineering)

    Does this seem at all comparable to what we see now? Because I see plenty of people with art degrees with tens of thousands of dollars worth of debt. Way more than I had and with a degree that offers no hope for repaying it.

    Basically what we have is predatory educational lending.

    Yeah, thats right, remember all the hubub about predatory lending from the banks? Supposedly they tricked people into buying houses they could not afford.

    That seems to be a damn sight different than what we see here.

    Tricking an adult into buying a house he cant afford is one thing

    Tricking some 18 year old kid into going in debt for a graphics arts degree quite another

    The latter is far more egregious, yet the former is the only one complained about.

    Yes – The fact that I question anything about education or college funding should be taken to mean I hate education, hate teachers and eat children.

    Now that thats out of the way, can anyone tell me why I should be excited about a bank tricking an adult into buying a house he cant afford, but a college tricking a kind into an education he cant afford is something that should be looked over?

    Been asking this question for years, never got an answer.

    • Jjkarlock

      Better watch you language around the liberals here, they consider this higher math:  “($2.5k x four years = $10 which is 25% of $10k per year times four
      years)”

      And never expect them to exhibit any logic ability. (Some of them are even so silly as to believe in peak oil and AGW, while being unable to give any logical argument to support their faith.)

      Thanks
      JK

    • valley person

       College in your and my day was much cheaper Rupert, because state’s had not yet discovered right wing tax cutting, which gradually shifted the cost of college onto the backs of tuition payers. The minimum wage was also much higher relative to the value of a dollar. I went to an out of state university in the 70s and paid $1500 a year  in tuition. I earned that much at a summer job at near minimum wage. Today’s tuition is much higher than what a student can earn at a summer job. My son had a $12,000 a year tuition bill and was only earning $3600 over the course of a summer at minimum wage. I graduated with zero debt, even with little help from my parents. My son graduated with debt, even though he had much more help.

      As for “art” majors…the right wing likes to make fun of them, but some artists earn a lot more than most engineers. Art education often includes design, including industrial design, film, photography, and a lot of other skills that can earn quite high wages or lead to entrepenurial opportunities. Our office has a graphic design arts group that earns just as much as many if not most engineers.

      And even if engineers were always better off than artists economically, which they aren’t, everyone is not cut out to be an engineer by temperment or proclivity. Nor is everyone cut out to be an artist.

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