Bailouts for the dropouts?
With the stroke of a pen, the socialist Obama administration has nationalized the student-loan industry. So far, so bad. The first casualties will be 2,500 of the 8,000 employees at Sallie Mae, formerly the largest provider of student loans. Don’t be surprised if the laid-off end up drawing government paychecks as Uncle Sam muscles out another piece of the productive private sector.
Now that the legislation has become law, the Congressional Budget Office says a fairer analysis reveals it will add $53 billion to the federal deficit, rather than reduce it by $68 billion, as the CBO estimated weeks ago to dupe Congress into supporting the measure. Maybe now the CBO will get around to a fairer scoring of Obamacare so Americans will know just how badly Rep. Bart Stupak, D-Mich., and other useful-idiot Blue Dog Democrats were duped.
Overlooked in the fawning media coverage of this government expansion is the effect on college costs. The government will pour additional billions into the higher-education system that already is saturated with cash. Colleges will have even less incentive to reduce their spending and curb their runaway tuition, fees, and room and board. So costs will continue to rise, provoking “do-something” politicians to throw even more money at loans and grants, and colleges will respond by raising their rates further, and so on.
One more thing: Most of the new cash is intended for students who statistically are the least likely to graduate; as it is, barely half of students at four-year colleges get diplomas in six. So the government will lend more money, more students will borrow, and more student-borrowers will flunk or drop out and will be saddled with huge debts with nothing to show for it. Now, given the government’s propensity for rewarding people who make foolish or reckless choices, it’s quite possible the administration would bail out the dropouts by forgiving some or all of their debts in much the same way it has bailed out abusive credit-card borrowers, tax frauds, unionized autoworkers, people who lied to get mortgages and the like.
To make the student-loan program whole again, however, the government would turn to taxpayers to make good on the forgiven loans. In other words, responsible Americans first would be compelled to lend money to dropouts and then pay back the loans themselves. When that happens, the Obama administration will have achieved socialism squared, by spreading the wealth around twice.
Read the whole story at Waterbury Republican-American
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