Tuesday, December 16, 2014

Study This for Awhile

As Doug Short notes, student loans may be a liability on the consumer balance sheet, but they constitute an asset for Uncle Sam. Just how big? It's 45.3 percent of the total federal assets, up from 37.2 percent at the end of 2012. This is about 7 times larger than the 6.4 percent for the Total Mortgages outstanding and 4.8 times the size of Taxes Receivable.

In other words, there is no market judgement involved in the sanity of these loans held by the government. They are made for all practical reasons by the government for political reasons to:

A. prop up the education infrastructure


B. buy the votes of students.

Is it any wonder there are so many interventionists in academia and students come out of college with no understanding at all about free markets and the nature of entrepreneurship?

It's a rigged game.

And, oh yeah, the government will eventually forgive the student loans.


  1. That's a lot of leverage over such a large segment of society. Caesar gets all kinds of options to play.

  2. Forgive them? why would you forgive them? thats a nice 'little' earner right there. roll them over, change the conditions a bit? Sure. Let them off the hook, never.