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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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International

Repeated COVID-19 Vaccination Weakens Immune System: Study

Repeated COVID-19 Vaccination Weakens Immune System: Study

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

Repeated COVID-19…

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Repeated COVID-19 Vaccination Weakens Immune System: Study

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

Repeated COVID-19 vaccination weakens the immune system, potentially making people susceptible to life-threatening conditions such as cancer, according to a new study.

A man is given a COVID-19 vaccine in Chelsea, Mass., on Feb. 16, 2021. (Joseph Prezioso/AFP via Getty Images)

Multiple doses of the Pfizer or Moderna COVID-19 vaccines lead to higher levels of antibodies called IgG4, which can provide a protective effect. But a growing body of evidence indicates that the “abnormally high levels” of the immunoglobulin subclass actually make the immune system more susceptible to the COVID-19 spike protein in the vaccines, researchers said in the paper.

They pointed to experiments performed on mice that found multiple boosters on top of the initial COVID-19 vaccination “significantly decreased” protection against both the Delta and Omicron virus variants and testing that found a spike in IgG4 levels after repeat Pfizer vaccination, suggesting immune exhaustion.

Studies have detected higher levels of IgG4 in people who died with COVID-19 when compared to those who recovered and linked the levels with another known determinant of COVID-19-related mortality, the researchers also noted.

A review of the literature also showed that vaccines against HIV, malaria, and pertussis also induce the production of IgG4.

“In sum, COVID-19 epidemiological studies cited in our work plus the failure of HIV, Malaria, and Pertussis vaccines constitute irrefutable evidence demonstrating that an increase in IgG4 levels impairs immune responses,” Alberto Rubio Casillas, a researcher with the biology laboratory at the University of Guadalajara in Mexico and one of the authors of the new paper, told The Epoch Times via email.

The paper was published by the journal Vaccines in May.

Pfizer and Moderna officials didn’t respond to requests for comment.

Both companies utilize messenger RNA (mRNA) technology in their vaccines.

Dr. Robert Malone, who helped invent the technology, said the paper illustrates why he’s been warning about the negative effects of repeated vaccination.

“I warned that more jabs can result in what’s called high zone tolerance, of which the switch to IgG4 is one of the mechanisms. And now we have data that clearly demonstrate that’s occurring in the case of this as well as some other vaccines,” Malone, who wasn’t involved with the study, told The Epoch Times.

So it’s basically validating that this rush to administer and re-administer without having solid data to back those decisions was highly counterproductive and appears to have resulted in a cohort of people that are actually more susceptible to the disease.”

Possible Problems

The weakened immune systems brought about by repeated vaccination could lead to serious problems, including cancer, the researchers said.

Read more here...

Tyler Durden Sat, 06/03/2023 - 22:30

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International

Study Falsely Linking Hydroxychloroquine To Increased Deaths Frequently Cited Even After Retraction

Study Falsely Linking Hydroxychloroquine To Increased Deaths Frequently Cited Even After Retraction

Authored by Jessie Zhang via Thje Epoch…

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Study Falsely Linking Hydroxychloroquine To Increased Deaths Frequently Cited Even After Retraction

Authored by Jessie Zhang via Thje Epoch Times (emphasis ours),

An Australian and Swedish investigation has found that among the hundreds of COVID-19 research papers that have been withdrawn, a retracted study linking the drug hydroxychloroquine to increased mortality was the most cited paper.

Hydroxychloroquine sulphate tablets. (Memories Over Mocha/Shutterstock)

With 1,360 citations at the time of data extraction, researchers in the field were still referring to the paper “Hydroxychloroquine or chloroquine with or without a macrolide for treatment of COVID-19: a multinational registry analysis” long after it was retracted.

Authors of the analysis involving the University of Wollongong, Linköping University, and Western Sydney Local Health District wrote (pdf) that “most researchers who cite retracted research do not identify that the paper is retracted, even when submitting long after the paper has been withdrawn.”

“This has serious implications for the reliability of published research and the academic literature, which need to be addressed,” they said.

Retraction is the final safeguard against academic error and misconduct, and thus a cornerstone of the entire process of knowledge generation.”

Scientists Question Findings

Over 100 medical professionals wrote an open letter, raising ten major issues with the paper.

These included the fact that there was “no ethics review” and “unusually small reported variances in baseline variables, interventions and outcomes,” as well as “no mention of the countries or hospitals that contributed to the data source and no acknowledgments to their contributions.”

A bottle of Hydroxychloroquine at the Medicine Shoppe in Wilkes-Barre, Pa on March 31, 2020. Some politicians and doctors were sparring over whether to use hydroxychloroquine against the new coronavirus, with many scientists saying the evidence is too thin to recommend it yet. (Mark Moran/The Citizens’ Voice via AP)

Other concerns were that the average daily doses of hydroxychloroquine were higher than the FDA-recommended amounts, which would present skewed results.

They also found that the data that was reportedly from Australian patients did not seem to match data from the Australian government.

Eventually, the study led the World Health Organization to temporarily suspend the trial of hydroxychloroquine on COVID-19 patients and to the UK regulatory body, MHRA, requesting the temporary pause of recruitment into all hydroxychloroquine trials in the UK.

France also changed its national recommendation of the drug in COVID-19 treatments and halted all trials.

Currently, a total of 337 research papers on COVID-19 have been retracted, according to Retraction Watch.

Further retractions are expected as the investigation of proceeds.

Tyler Durden Sat, 06/03/2023 - 17:30

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Government

Biden Signs Debt Ceiling Bill, Ending Monthslong Political Battle

Biden Signs Debt Ceiling Bill, Ending Monthslong Political Battle

Authored by Lawrence Wilson via The Epoch Times,

President Joe Biden signed…

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Biden Signs Debt Ceiling Bill, Ending Monthslong Political Battle

Authored by Lawrence Wilson via The Epoch Times,

President Joe Biden signed the Fiscal Responsibility Act on Saturday, suspending the debt ceiling for 19 months and bringing a monthslong political battle to a close.

The compromise legislation negotiated by Biden and House Speaker Kevin McCarthy (R-Calif.) passed both houses of Congress with bipartisan support this week, averting a potential default on the nation’s financial obligations.

“Passing this budget agreement was critical. The stakes could not have been higher,” Biden said in a Friday evening address to the nation from the Oval Office.

Congressional leaders in both parties, eager to avoid financial disaster, endorsed the bill.

McCarthy referred to the legislation in historic terms, calling it the biggest spending cut ever enacted by Congress. Senate Majority Leader Chuck Schumer (D-N.Y.) said, “We’ve saved the country from the scourge of default,” after the bill passed the Senate on June 1.

House Minority Leader Hakeem Jeffries (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.) both supported the bill.

Biden vs. McCarthy

The president’s signature ends a monthslong cold war with McCarthy over terms for raising the nation’s $31.4 trillion debt ceiling.

The Financial Responsibility Act suspends the debt ceiling until Jan. 1, 2025, cuts non-defense discretionary spending slightly in 2024, and limits discretionary spending growth to 1 percent in 2025.

The agreement also contains permitting reforms for oil and gas drilling, changes to work requirements for some social welfare programs, and clawbacks of $20 billion in IRS funding and $30 billion in unspent COVID-19 relief funds, among other provisions.

President Joe Biden hosts debt limit talks with House Speaker Kevin McCarthy (R-Calif.) and other congressional leaders in the Oval Office at the White House on May 9, 2023. (Kevin Lamarque/Reuters)

In the absence of congressional action to allow additional borrowing, the United States would have lacked the ready cash to pay all of its bills on June 5, according to Treasury Secretary Janet Yellen.

Yellen announced in January that the country was in danger of reaching its limit.

McCarthy then said Congress would not increase the limit without an agreement from the White House to cut spending. Biden said he would not negotiate over lifting the limit because that would put the full faith and credit of the United States at risk.

The impasse was broken in late April when the House passed the Limit, Save, Grow Act, authorizing a $1.5 trillion increase in borrowing along with spending cuts and other measures favored by Republicans.

Biden then agreed to negotiate with McCarthy, resulting in the Fiscal Responsibility Act.

Opposition

A vocal minority of lawmakers in both parties opposed the bill.

Some Republicans believed the agreement conceded too much to Democrats. Rep. Chip Roy (R-Texas) nearly blocked the bill in committee, but it cleared by a single vote.

Some Democrats opposed the agreement because it cuts discretionary spending and changes work requirements for the Supplemental Nutrition Assistance Program (SNAP). They said those provisions would hurt working Americans and those in need.

​​House Rules Committee member Rep. Chip Roy (R-Texas) speaks at the Capitol on Jan. 30. (Win McNamee/Getty Images)

A group of Senate Republicans led by Lindsey Graham (R-N.C.) and Susan Collins (R-Maine) initially opposed the bill due to concerns about the level of defense spending. They were brought on board by assurances from Schumer and McConnell that emergency defense appropriations could be added later if needed.

The bill passed the House by a vote of 314 to 117 on May 31. Forty-six Democrats and 71 Republicans voted no.

The Senate passed the measure 63 to 36 the next day. Four Democrats, one Independent, and 41 Republicans voted no.

Mixed Reactions

Outside the Capitol, some observers applauded the bipartisan effort while others echoed the complaints of congressional dissenters.

“This kind of compromise is exactly how divided government should work,” Kelly Veney Darnell, interim CEO of the Bipartisan Policy Center, said in a June 2 statement.

EJ Antoni, a research fellow at The Heritage Institute, said “conservatives have little to celebrate with this deal, and much about which to complain.” According to Antoni, the bill doesn’t actually cut spending. He called it “left-wing legislation” in a statement published June 1.

Navin Nayak, counselor at the Center for American Progress, endorsed the legislation unenthusiastically, saying it was imperfect but necessary in a May 31 statement. Nayak said the Mountain Valley Pipeline, green-lighted by the bill, puts the safety of thousands at risk and the added work requirements will increase hunger in America.

Congress must now work the provisions of the Fiscal Responsibility Act into a federal budget and the dozen appropriations bills required to fund the government in the coming year.

The 2024 fiscal year begins on Oct. 1.

Tyler Durden Sat, 06/03/2023 - 15:30

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