First post on the Financial Stupidity topic - much more to come

Posted On: Thursday - January 19th 2017 6:40PM MST
In Topics: 
  University  Global Financial Stupidity  Economics

In particular, I would like to write about the University loan bubble and accompanying University Stupidity that is at a very high level right now. There will be more to come on this topic and also the general topic of Global Financial Stupidity.

Due to time constraint for today, we will start now with an article from zerohedge on some "accounting problems" with student loan default rates. This is not starting with a very good introduction, but it's just to put this out there while the article is new, and we are at the last day of the Øb☭ma administration, bureaucrats of which have been faking data like a Chinese Cadre reporting directly to Chairman Mao.

Zerohedge says US Government Caught Massively Fabricating Student Loan Default Data
An the WSJ reported overnight "many more students have defaulted on or failed to pay back their college loans than the U.S. government previously believed."

The admission came last Friday, when the Education Department released a memo saying that it had overstated student loan repayment rates at most colleges and trade schools and provided updated numbers. This also means that the number of loan defaults in various cohorts is far greater than previously revealed.

A spokeswoman for the Education Department said that the problem resulted from a "technical programming error."

And so, the infamous "glitch" strikes again.

How bad was the data fabrication? When The Wall Street Journal analyzed the new numbers, the data revealed that the Department previously had inflated the repayment rates for 99.8% of all colleges and trade schools in the country. In other words, virtually every single number was made to appear better than it actually was. And people mock China for its own "fake data."

According to an analysis of the revised data, at more than 1,000 colleges and trade schools, or about a quarter of the total, at least half the students had defaulted or failed to pay down at least $1 on their debt within seven years. This is a stunning number and suggests that the student loan crisis is far greater than anyone had anticipated previously. It also means that the US taxpayer will be on the hook for hundreds of billions in government-funded loans once attention finally turns to who is expected to foot the bill for years of flawed lending practices.

Was this the 2nd Great Leap Forward, being called GLF 2.0? It does seems like we have all leaped, but more like off the New River Gorge bridge with a china-made parachute than forward, it seems to me. Hey, could I be a zerohedge commenter - gosh darn it, I'm funny enough!

Here's a real ZH commenter - just off the first few for this article:

Krungle's picture
Krungle NoWayJose Jan 19, 2017 11:37 AM

You cannot tell a bank that they can make risky loans to teenagers with no credit history or jobs and that the government will be responsible for defaults and not expect bankers to hand them out like candy. This is yet another case where the taxpayer assumes the risk for banks and the banks only have to worry about the profit. If these loans were could all be discharged with bankruptcy, and if the government assumed no risk, you would find the student loan market immediately tighten up dramatically. And schools would adjust accordingly. If the loans came with grade requirements (something like if you start failing classes, we will stop funding you), you would find schools suddenly investing in education, not administration. As with almost everything in our society, the bad behavior starts with absolving banks of risk and guaranteeing their profits.

This is so correct that there is nothing that PeakStupidity could write for this post to explain any better (but we will later, just for the heck of it, as we thought of all this first).

Thursday - January 19th 2017 10:12PM MST
Well, I agree with all. I will read Fred Reed - I sometimes get sick of him, but I'll look at that one on unz.

Re your last 2 paragraphs. First off, you should definitely be a Ron Paul and Pat Buchanan supporter. "A Republic, not an Empire" was either the name of a Buchanan book or maybe just a column of his.

Not only do you not need the high population to do well, but any average population density beyond a certain point becomes a hindrance. I think just the amount of land available per average American (if we put a stop to this massive immigration right away) is as great a benefit as the other natural resources. I want to write more later about lower pop. density can = a more libertarian-oriented country.

Have a good night, Frank.
Thursday - January 19th 2017 7:47PM MST
Fred Reed had an interesting post on Unz.

It goes along with the whole financial thing, well if you think about it.

If you read the article by him, regardless of whether you think his analysis of what is happening holds water or he has anyone's motivations correct...

The simple truth is that the US not only is not the invisible hand that moves the world, there is quite a bit they can do absolutely nothing about, even if they want to.

Unless something really odd happens in the next decade or two it is pretty much inevitable the economic center of the world moves to Asia (which pretty much means China).

That's an inevitable reality, at least to my eyes, because I can think of absolutely nothing that can stop it.

But the thing is, there is a quote from Idiocracy:

"Don't worry scro, there's lots of tards out there living really kick ass lives."

Instead of trying to piss on a string trying to prop up the "empire" (which is pretty much something that has only existed in American history since 1945), we ought to be doing what it takes to make this a better place to live than China ever will be.

And on another note, Japan has had roughly 1/3 of our population for quite a while (guess we are edging ahead with immigration and their declining population). Still hasn't stopped them from being the wealthiest per capita society on earth. Not to mention that they aren't exactly pikers at technology and science either.

No reason we can't do the same, even if we aren't continually involved in these idiotic adventures in Syria, Iraq, or what have you. Especially since we are basically half a continent, and have natural resources Japan (and frankly China) could never dream of.
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