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Student Loan Forgiveness: Who Pays?

Student Loan Forgiveness: Who Pays?

Via SchiffGold.com,

Student loan forgiveness has been in the news lately.

There are a number of different…

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Student Loan Forgiveness: Who Pays?

Via SchiffGold.com,

Student loan forgiveness has been in the news lately.

There are a number of different plans being floated, from blanket debt repudiation up to various amounts, to more limited income-based schemes.

But nobody ever talks about a key question: who is going to pay for it?

Well, you will.

I think most Americans think Joe Biden or Congress can just wave some kind of magic wand and student loan debt will just disappear. Poof! No harm, no foul. In fact, I think a lot of people believe student loan forgiveness will stick it to the evil banks who lent out all of that money.

But it doesn’t work that way.

Most student loans are backed by the federal government. That means the taxpayer is on the hook. The “evil” lenders will still get their money. The only thing that would change is who foots the bill. Instead of the person who signed their name promising to pay off the loan, the American taxpayer will get stuck with the bill.

A lot of people object to student loan forgiveness because they view it as “unfair.” After all, the borrower willingly took out the loan. This is certainly a valid objection. But most people don’t care about your moral scruples. They’ll just call you uncaring and move on.

But the economic ramifications are a little harder to ignore – if you understand them. And they will impact everybody whether they think they care now or not.

Remember those stimulus checks?  Everybody was thrilled to get that “free” money. But you’re paying for those stimmy checks today through the inflation tax. Most people seem less than pleased.

The Scope of the Problem

Currently, 46 million Americans have outstanding student loans. Of that number, 45.4 million hold federally-backed loans. The total student loan bill stands at $1.75 trillion.

In 2020, the US government stopped defaults and allowed borrowers to pause payments due to the COVID-19 pandemic. At that time, 11.1% of student loans were 90 days or more delinquent or were in default. This doesn’t count the people who were in various deferment programs and were not counted as delinquent.

President Biden recently extended the payment pause until September. It was the sixth extension since authorizing the initial deferment.

“We are still recovering from the pandemic and the unprecedented economic disruption it caused,” Biden said, in an April 6 statement announcing the latest pause.

(On a side note, the president keeps telling us how strong the economy is. Something here doesn’t make sense here.)

Ironically, the blame for this glut of student loan debt falls squarely on the shoulders of the US government – the same people promising to fix the problem. Had Uncle Sam not guaranteed all of these loans, lenders would have never been willing to loan a bunch of college kids money to begin with.

Ramifications

Student loan debt forgiveness sounds good, but it will have a slew of nasty consequences.

For one thing, loan forgiveness would likely raise the cost of college even higher.  The widespread availability of student loans drove up college tuition in the first place.  Studies have shown the influx of government-backed student loan money into the university system is directly linked to the surging cost of a college education.

As Peter Schiff pointed out in a podcast, loan forgiveness would be like Christmas for colleges and universities. College administrators will figure, “Now we can really raise tuition because our students know they can borrow the money and they won’t ever have to pay it back.”

Peter said it won’t likely be a one-time thing. This will create a moral hazard.

If they do it once, they’re going to do it again. Everyone is going to expect it. … The moral hazard there is nobody is going to pay for college. Nobody is going to work to try to avoid going into debt because you’re an idiot. Take on the debt! It’s going to be forgiven.”

The second problem is the US government doesn’t have any money. It will have to borrow billions more to pay for any loan forgiveness scheme. Borrowed money has to be paid back by taxpayers, either in the form of higher taxes or inflation – likely both.

Student loan forgiveness would also pour more gasoline on the inflationary fire. It would be another massive stimulus program. If the Fed forgave $1.7 trillion in student loans, it would basically be like dropping $1.7 trillion from a helicopter.

Again, think back to the coronavirus stimulus.

When you consider the mechanics of loan forgiveness, it becomes clear why it would be inflationary.

Under normal circumstances, when somebody defaults on debt and simply doesn’t pay, it is a gain to the borrower, but a loss to the lender. This isn’t inflationary. The extra money the debtor saves on debt payments and now has to spend is offset by the money the lender will never have to spend. But when the government backs the loan, the calculus changes. Borrowers will have extra money since they no longer have to pay on the loans. Lenders will get their money because the government will pay the balance. And of course, the government will borrow that money and the Fed will monetize the debt.

In the cases where the government issued direct student loans, it effectively printed money that will never go come out of circulation because the student now doesn’t have to return it to the government.

In effect, loan forgiveness is not much different than quantitative easing.

But unlike QE, the money will flow into Main Street instead of Wall Street. That means this inflationary action would be more likely to show up in consumer prices.

Student loan forgiveness sounds good. It’s politically popular. But it is bad economics. And economics doesn’t care about anybody’s feelings.

Tyler Durden Fri, 05/06/2022 - 13:20

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Vaccinia virus MacGyvers a makeshift tool to repair its DNA, exposing a vulnerability that could be targeted

Instead of relying on the cell’s repair mechanisms, the vaccinia virus MacGyvers a tool for DNA repair from one that it already uses to copy DNA, reports…

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Instead of relying on the cell’s repair mechanisms, the vaccinia virus MacGyvers a tool for DNA repair from one that it already uses to copy DNA, reports a team of researchers at the Medical University of South Carolina (MUSC) in the Journal of Virology. Blocking that tool – an enzyme known as polymerase – at once disrupts the virus’s ability to copy and to repair DNA, exposing an Achilles’ heel that could be targeted with a therapeutic. 

Credit: Medical University of South Carolina. Photo by Sarah Pack.

Instead of relying on the cell’s repair mechanisms, the vaccinia virus MacGyvers a tool for DNA repair from one that it already uses to copy DNA, reports a team of researchers at the Medical University of South Carolina (MUSC) in the Journal of Virology. Blocking that tool – an enzyme known as polymerase – at once disrupts the virus’s ability to copy and to repair DNA, exposing an Achilles’ heel that could be targeted with a therapeutic. 

“For vaccinia virus, polymerase is a Sawzall – a tool that you can use for everything” said Paula Traktman, Ph.D., senior author of the article and dean of the College of Graduate Studies at MUSC, who has studied the virus for decades. “Viruses have smaller chromosomes, and so they’ve evolved to be able to use their tools for different things.”

“It’s like the virus’s Swiss Army knife,” said Conor Templeton, Ph.D.  lead author of the article, who was a predoctoral candidate in the Traktman laboratory during the study and has since completed his doctorate. “It’s a protein that’s involved in replicating or copying DNA, but it also seems to be involved in repair.”

Such detailed basic science findings about the way viruses copy and repair their DNA have paved the way for breakthrough antiviral therapies in the past 20 years, said Traktman.

“HIV antiretroviral drugs were made by really painstaking analysis of which proteins in the virus are essential, leading to drugs that now have made it a chronic disease,” she said. “A curative treatment for hepatitis C was made possible by painstaking analysis of which proteins are essential for the virus. The more we know about the enemies, the better the weapons we can develop against them.”

Better therapies for pox viruses are certainly needed. The vaccinia virus is a close relative of the virus causing smallpox and was used in the vaccine that successfully eradicated it in the late 20th century. Although smallpox no longer naturally occurs, the threat that it might be used as a bioweapon remains, and currently, there is only one approved antiviral agent against it. Other pox viruses, most notably monkeypox, continue to afflict humans and can be lethal.

Vaccinia is a large DNA virus made up of about 200 genes, and its approach to survival differs markedly from that of smaller, nimbler RNA viruses, such as that which causes COVID-19. The RNA viruses mutate quickly to outrun the body’s immune system. However, they do so at the cost of corrupting their genome. Vaccinia virus prefers a slower, steadier approach and is less likely to make mistakes, helping to ensure genomic stability.

“Vaccinia has gone for ‘I may not be a Ferrari, but I’m a jeep, and I’m going to come out undamaged, and I’m going to be stable, and I’m going to stick around,’” said Traktman.

Unlike other DNA viruses, vaccinia virus does not set up shop in the cell’s nucleus but instead stays in the cytoplasm, where it begins reproducing itself using only the tools it brought with it.

“The nucleus is like the kitchen of the cell,” said Traktman. “If you came into somebody’s house to cook dinner, you would go to their kitchen because that’s where all the necessary equipment is. You wouldn’t decide to go downstairs to their basement because then you’d have to start from scratch. But that’s what vaccinia does. It says ‘I’m not going into the kitchen where you cook. I’m going to just set up shop in the basement, where there’s lots of space. I’ll build everything I need.’”

The MUSC team wanted to see how vaccinia virus would react to damage to its DNA caused by ultraviolet (UV) radiation. They chose UV radiation because it is already known to affect viral replication negatively. They also wanted to know whether exposing the cell to UV radiation one hour before infection with vaccinia would affect the virus’s ability to copy and repair DNA.

The MUSC team found that exposing cells to UV radiation either one hour before or four hours after infection with vaccinia virus reduced the number of mature viral units, or virions, vaccinia was able to produce.

The enzyme polymerase is known to be necessary for successful viral replication, and UV radiation can prevent it from doing its job.

“Polymerase is like a car running down the road,” said Templeton. “It runs smoothly when the road is nice and flat. But UV radiation acts like a speed bump, stopping it in its tracks.”

The UV radiation can cause damage that makes it impossible for DNA replication to continue.

The team found UV-caused damage in the viral DNA of cells irradiated four hours after infection but not in those irradiated an hour before infection. The cells irradiated at four hours after infection also produced 30 times fewer new viruses. This UV-caused damage could account for the reduced infectivity of these cells. Although viral DNA levels were able to recover slightly by 10 to 18 hours, suggesting some viral DNA repair, blocking polymerase resulted in a further tenfold to twentyfold reduction.

“Polymerase is a well-known character in DNA replication,” said Traktman. “It’s a well-known character in actually synthesizing the genome, but this is its debut in repair.”

In essence, the virus’s polymerase “multitasks,” but in so doing makes the virus vulnerable. Because vaccinia relies on polymerase both for DNA copying and repair, blocking it could be a particularly devastating weapon against the virus. The current blocking agent, however, is too broad, and a much more tailored one would be needed for the clinic.

Next, the MUSC team wants to understand better why blocking polymerase makes the DNA more vulnerable to damage and less able to repair itself.

“We want to establish the ensemble of culprits in that process and then try to understand why it is that when you inhibit polymerase function, you see this sensitivity,” said Templeton.

About MUSC

Founded in 1824 in Charleston, MUSC is home to the oldest medical school in the South as well as the state’s only integrated academic health sciences center, with a unique charge to serve the state through education, research and patient care. Each year, MUSC educates and trains more than 3,000 students and nearly 800 residents in six colleges: Dental Medicine, Graduate Studies, Health Professions, Medicine, Nursing and Pharmacy. MUSC brought in more than $327.6 million in biomedical research funds in fiscal year 2021, continuing to lead the state in obtaining federal and National Institutes of Health funding, with more than $220 million. For information on academic programs, visit musc.edu.

As the clinical health system of the Medical University of South Carolina, MUSC Health is dedicated to delivering the highest-quality and safest patient care available while training generations of compassionate, competent health care providers to serve the people of South Carolina and beyond. Patient care is provided at 14 hospitals with approximately 2,500 beds and five additional hospital locations in development, more than 300 telehealth sites and nearly 750 care locations situated in the Lowcountry, Midlands, Pee Dee and Upstate regions of South Carolina. In 2021, for the seventh consecutive year, U.S. News & World Report named MUSC Health the No. 1 hospital in South Carolina. To learn more about clinical patient services, visit muschealth.org.

MUSC and its affiliates have collective annual budgets of $4.4 billion. The more than 24,000 MUSC team members include world-class faculty, physicians, specialty providers, scientists and care team members who deliver groundbreaking education, research, technology and patient care.


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The New Rift Between WHO And China

The New Rift Between WHO And China

Authored by Jeffrey Tucker via The Brownstone Institute,

From the beginning of the pandemic, the World…

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The New Rift Between WHO And China

Authored by Jeffrey Tucker via The Brownstone Institute,

From the beginning of the pandemic, the World Health Organization and China’s CCP have worked and spoken hand-in-glove, culminating in the Potemkin Village junket of mid-February 2020. The WHO-sponsored travel report—how wonderfully China had performed!—was written and signed by American public health officials who recommended Wuhan-style lockdowns, a disastrous policy that further inspired most governments in the world to do the same.

Twenty-six months later, it turns out that China in fact had not “eliminated the virus fully within its borders,” contrary to the over-the-top claims of TV pundit Devi Sridhar in her new book “Preventable.” They only pushed cases into the future, as the CCP discovered when positive tests appeared all over Shanghai, leading to 7 weeks of brutal lockdowns.

This move on China’s part has been a disaster for the country and the world economy, and presently endangers the financial and technological future of the entire country.

For Xi Jinping, lockdowns and zero-covid were his greatest achievement, one which was celebrated the world over, causing his political pride to swell beyond all bounds. Now, he cannot back off lest he face possible losses in upcoming party elections.

Just this past weekend, he made it clear to the entire government that there would be no backing off the zero-covid policy: the CCP will “unswervingly adhere to the general policy of ‘dynamic zero-Covid,’ and resolutely fight against any words and deeds that distort, doubt or deny our country’s epidemic prevention policies.”

The problem is acute: vast numbers in China likely need to acquire natural immunity via exposure. The lockdown policy likely puts a damper on the achievement of endemicity. That means long-term damage to China’s future.

Sensing this problem, the head of the WHO, Tedros Adhanom Ghebreyesus, offered a mild criticism:

“Considering the behavior of the virus, I think a shift will be very important,” adding that he had discussed this point with Chinese scientists.

What happened next is truly fascinating: Tedros’s comments were censored all over China and searches for the name Tedros were immediately blocked within the country.

Implausibly, merely by stating the incredibly obvious point, Tedros has made himself an enemy of the state.

Meanwhile, another WHO/China partisan, Bill Gates, has been sheepishly saying something very similar in interviews, namely that the virus cannot be eradicated.

It’s not just Tedros and Gates who are trying to flee their advocacy of lockdowns. Anthony Fauci himself denied that the United States ever had “complete lockdowns”—which is technically correct but not because he didn’t demand them.

On March 16, 2020, Fauci faced the national press and read from a CDC directive: “In states with evidence of community transmission, bars, restaurants, food courts, gyms and other indoor and outdoor venues where groups of people congregate should be closed.”

In fact, one gets the strong sense that governments around the world are pretending as if the whole pathetic and terrible affair never happened, even as they are attempting to reserve the power to do it all over again should the need arise.

On May 12, 2022, many governments around the world gathered for a video call and agreed to pour many billions more into covid work, and reaffirm their dedication to an “all-of-society” and “whole-of-government” approach to infectious disease. The U.S. government under the administration readily agreed to this idea.

Leaders reinforced the value of whole-of-government and whole-of-society approaches to bring the acute phase of COVID-19 to an end, and the importance of being prepared for future pandemic threats. The Summit was focused on preventing complacency, recognizing the pandemic is not over; protecting the most vulnerable, including the elderly, immunocompromised people, and frontline and health workers; and preventing future health crises, recognizing now is the time to secure political and financial commitment for pandemic preparedness.

The Summit catalyzed bold commitments. Financially, leaders committed to provide nearly $2 billion in new funding—additional to pledges made earlier in 2022. These funds will accelerate access to vaccinations, testing, and treatments, and they will contribute to a new pandemic preparedness and global health security fund housed at the World Bank.

Is it progress to see these people throwing around language from the much-criticized but now wholly vindicated Great Barrington Declaration? Doubtful. You can’t make a bad policy better by tossing around words. There is every indication from this statement that there will be no apologies, no regrets, and no changes in the default position that governments must always and everywhere have maximum power to control any pathogen of their choosing.

Despite Tedros’s censored words, it’s no wonder that Xi Jinping continues to feel vindicated and affirmed, and sees no real political danger in choosing his own power over the health and well-being of his people. Governments around the world still cannot muster the courage to make a full-throated and solid attack on zero-covid, for fear of the implications of such a concession. Nudges and hints, even from the WHO, will not do it.

Tyler Durden Mon, 05/16/2022 - 19:45

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Spread & Containment

100,000 More Recalls And Even More Shanghai Delays Sting Tesla To Start The Week

100,000 More Recalls And Even More Shanghai Delays Sting Tesla To Start The Week

Just as it started to look like everything had finally been…

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100,000 More Recalls And Even More Shanghai Delays Sting Tesla To Start The Week

Just as it started to look like everything had finally been sorted out for Tesla in Shanghai, we reported last week that the company once again had to halt its production due to "issues with supplies". 

Starting off this week, it doesn't look like things are getting any better. First, Bloomberg reported that "no vehicles were sold in Shanghai last month" as a result of the lockdown, according to an auto-seller association in the city. 

Meanwhile, Tesla's plans to restart Shanghai to its pre-pandemic production levels have been pushed back another week, Reuters reported this weekend. Citing an internal memo, Reuters wrote that Tesla is still planning on just one shift for its plant this week and a daily output of about 1,200 units.

Tesla is aiming for 2,600 units per day by May 23. 

Additionally, it was reported Monday that Tesla would be recalling over 100,000 vehicles in China. 107,293 vehicles in China will be recalled "due to safety risks", according to the China People's Daily

The recall, which relates to a defect in the central touchscreen during fast charging, "involves Model 3 and Model Y vehicles produced in the country between Oct 19, 2021, and April 26, 2022," the report says. 

Recall, Tesla's most recent Shanghai shutdown came just three weeks after the plant resumed production. The plant was closed for a total of 22 days, Reuters noted. Shanghai is now in its seventh week of lockdowns, and we noted last week that it was "unclear when the supply issues can be resolved and when Tesla can resume production".

Wire harness maker Aptiv is one supplier who is currently facing issues due to "infections found among its employees", we reported last week. Meanwhile, Tesla had just started to eye resuming double shifts at its plant, we noted two weeks ago. The plant was making plans to "resume double shifts" at its Shanghai factory as soon as mid-May after starting back up in mid April. 

Tyler Durden Mon, 05/16/2022 - 19:25

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