Archive for debt

Laffy on the Nicole Sandler Show: Debt and Destruction



Laffy was on the Nicole Sandler show this morning. The topic: Debt and Destruction
The podcast is here.

From the Radio Or Not website:

I’m one of the lucky ones. My father paid my way through college, as he did for my two sisters as well. We all went to Florida state universities and, back in the 1970′s and 80′s, tuition was remarkably inexpensive.

In 2013, the average college graduate embarked on the next chapter of his or her life with $35,200 of debt and, sadly, limited career and income opportunities. Senator Elizabeth Warren had long advocated for relief and, last May, introduced the Bank on Students Loan Fairness Act, which could come up for a vote tomorrow, and would allow people with higher interest rates to refinance their student loans at the current low rate of 3.4% an option currently denied to most borrowers by federal rules


Must-Read: Personal debt that enriches Wall St. -- NOT national debt -- is greatest threat to retirees


must read

Your Daily Dose of BuzzFlash at Truthout, via my pal Mark Karlin:

Whenever the elected political tools of the oligarchs trash Social Security, they tout 401(k)-type accounts and voluntary retirement savings programs. [...]

...WP article is entitled, "Most Americans accumulating debt faster than they’re saving for retirement":

A majority of Americans with 401(k)-type savings accounts are accumulating debt faster than they are setting aside money for retirement, further undermining the nation’s troubled system for old-age saving, a new report has found....


So the problem facing even non-Social Security dependent retirees (who have earned their checks by paying into the fund) is due to personal debt not national debt. What people owe money on are non-government expenses such as college, housing, cars, credit cards, etc.  This is private indebtedness that is contributing to a looming personal retirement shortfall of funds.

Ironically, Social Security is one of the few programs that is keeping most seniors from economic impoverishment, as meager as the average monthly check is.  [...]

Since the Reagan era, wages have been relatively stagnant in the United States as debt has risen.  It is indeed this growing personal (again not national) debt that has been a primary source of profit for the banks too big to fail.  Persons who owe large amounts of money are paying off interest at often exorbitant sums (think credit cards) while in many cases barely scratching away at principal.  This is all easy money for banks that are paying out literally .01 % on savings accounts. [...]

So, let this WP article be a mini-lesson on what the oligarchy and their minions on the Hill, such as Paul Ryan, have been up to. Since the Reagan era, they have been promoting policies that increase personal debt while stagnating wages (except for themselves, of course).  In turn, a likely majority of the 99% has to go into debt and borrow money at high interest rates, while those who save receive virtually no interest on their savings.  This, in turn (except for Social Security) limits what they can save for retirement.

Then the financial titans sponsor think tanks and give campaign contributions to blame "entitlements" for all the personal indebtedness which has fueled their profitsSo, if a "grand bargain" of Social Security and Medicare cuts are enacted, the elderly become indebted and poorer, while the Wall Street barons make even a greater profit from increased borrowing as the national debt is lowered in the name of "austerity" (without revenue increases in the form of higher progressive taxes on the rich).

Please read the entire post here.


I Love My Debt Collector


debtors prison

Times are tough, the economy has sputtered thanks to the sequester and the government shutdown. Many of us live on hopes and dreams of a better day. And try as we do, those days seem separated from arriving by trying to stretch the few dollars we have to make them go as far as they can.

This isn't exactly rob Peter to pay Paul, but it's a shell game, for sure. We make minimum payments here, delay a payment there -- even though the check we write this month won't really lower what we owe. We're just buying time while the banks get rich -- or richer.

No matter how good we think we are at this ploy, sometimes circumstances arise and some payment just can't get made -- especially if you and your loved ones want to be fed. And minimum wage jobs don't cover everything, not with a family.

Then the inevitable happens. The call. That call. It's the bill collector. They're not going to take you off to debtor's prison, basically because they don't exist anymore in the States, but it's painful  none-the-less.

These are never pleasant calls, and the people who are making minimum wage placing the collection reminders can't be blamed. It's their job and probably the only one they can get. Despite efforts to be patient while hearing the same excuses everyone uses, they really have one goal in mind -- to get you to pay your bills. And it's not as if we don't want to. It's that in some cases we just can't.

What's the solution? There is one. Think of it as a spoonful of sugar helps the medicine go down approach.

CFS2. Never heard of them? Well, they're a new kind of debt collector. They've got new approach and it's working both for the creditors and for the debtors. Their success rate is more than twice that of comparable companies. Instead of railing at you for not paying a bill, they help you find a way to  pay it. Then when those assets come in, they reap even more rewards.

If it sounds complicated, it's not. It's just an original way to deal with an age old problem. Check it out. It's so amazing that CBS did a spot on it for the evening news. This is not a commercial or endorsement from me. That's why I'm not giving your a homepage website link. It's just a wonderful, uplifting story you should see.

Oh, and here's a bit about the man who came up with this.  Bill Bartmann is his name. He left a dirt-poor family at age 14 to join the carnival; became an alcoholic gang member by age 17; later paralyzed by falling down stairs drunk; being told that he’ll never walk again, yet proving the doctors wrong, later walked out of the hospital unassisted.

This is a guy who "saw it all" and took life's lessons, turning his lemons into our lemonade.


Live Streaming Video- President Obama Makes a Statement 10:35a EDT




Elizabeth Warren -- If That Strikes You As Bizarre, Then You Are Not Alone


Dine and Dash 2

I think Senator Warren's explanation is simple and quite eloquent. She doesn't mince words and at the same time, explains what the current financial crisis is really about and the imminent disaster approaching in days, not weeks or months.

What it boils down to in the street vernacular of my native Boston suburbs is this here is a wicked pissah of a crisis, the result of "dine and dash." (You may also know it as  "dine and ditch", "eat and run" or "beating the check") But it all means the same thing. And Congress is playing games with our government now matter which way you cut it.


Sen. Elizabeth Warren (D-Mass.) issued a stern warning against allowing the U.S. government to default on its debt, and blamed Congress for the government's current fiscal impasse during a Wednesday speech on the Senate floor.

We’re in this position for one reason, and one reason only: Congress told the government to spend more money than we have. Congress told the Treasury to run up our debt to pay for it. But now Congress is threatening to run out on the bill,” Warren said. "If that strikes you as bizarre, then you are not alone."

The Massachusetts senator and consumer rights activist/protector spoke firmly, precisely and points fingers. If you want to enjoy seeing someone stand up for you and me, to nail the wrong-doers for their reckless and irresponsible behavior, here you go:

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Video- The Daily Show: Shutstorm 2013- Scare Tactics


Happy, Happy, Joy, Joy, Not


lipstick on a pig

Whoopee. A student loan bill is being sent to the president and he's expected to sign it. It's a lipstick on a pig bill is what it truly is. And sadly, it's better than the option, but since when are we going to just settle for better, and not the best? Isn't the U.S. Army's slogan, "Be the best you can be"? It's not just be good, or be better than someone else, it's be the best.

Don't our students, our future, deserve that same treatment? What we gave them is more of the bait and switch.

In 2007, the Democratic Congress lowered the borrowing rate on student loans from 6.8 percent to 3.4 percent. That reduction was temporary, however, and in the last few years, Congress has had to wrestle with how to extend the low rate and how to pay for it.

Well, first off, it paid for itself. And secondly the program had been working just fine. But that wasn't good enough for the Republican House. The extremists in the party and in the house felt they were making education too affordable. Too easy for everyday Americans. Truthfully, what they feared was that an educated populace would not vote Republican. Simple as that. It's the same argument with voter ID's and immigration. We can't let the many have a say in their governance or the GOP will go Bye-bye.

Knowing they had to do something, they decided to pull the old, "Let's double the price, then mark it down a quarter and people will think they're getting a bargain price" scam. And they did. And the weak Democrats fell for it.

What am I talking about?  When the existing bill expired, June 30th, (the GOP had dragged their feet and made sure it did expire) Congress "rushed" to pass a stop-gap bill and in doing so, doubled the fee on loans from 3.4% back to 6.8%.  Mind you, this program wasn't costing the US a single cent. It was doing just the contrary, it was making the US billions in interest fees. It was one of the top three profitable programs in all of our revenue generating schemes. Need some perspective:  The Congressional Budget Office's latest projections, the federal government projects a record $50-billion profit on student loans this year.


That amount is more money off student loans this fiscal year than ExxonMobil, Apple, J.P. Morgan Chase or Fannie Mae made on their respective businesses last year. No, that wasn't enough. Let's saddle the poor students with more. Make them slaves to debt so they can never be free.

Here's a few facts according the the American Student Assistance - a non-profit organization.

There are approximately 37 million student loan borrowers with outstanding student loans today.

There is roughly somewhere between $902 billion and $1 trillion in total outstanding student loan debt in the United States today.

As of October 2012, the average amount of student loan debt for the Class of 2011 was $26,600, a 5 percent increase from approximately $25,350 in 2010.

College degree

There's no doubt a post high school education impacts the economy in more than just interest payments. It increases salaries earned and thus more tax revenues. Here's a brief breakdown:

In 2010, people ages 25 to 34 with bachelor's degrees earned 114 percent more than did those without high-school diplomas.

College graduates earned 50 percent more than did young adults who completed only high school, and 22 percent more than did those with associate degrees.

Why not be happy then with the bill the president is poised to sign lowering the interest charged to students? Because we're trying to pay for wasteful government programs on the backs of our future. The government has become a Shylock. We'd be better off keeping the rates low, not floating them against treasury note rate PLUS 2.5%. Ask yourself why it's students and their families who are being punished for the wasteful and irresponsible spending of boondoggle programs and pork barrel laced bills.

Go ahead, Mr.President. Sign this bill. It's temporary relief from an artificial crisis, but don't expect a thanks. The Republicans robbed our future. The Democrats were complicit. And you're stuck with a "lesser of two evils." It's a tough place to be, but that's why they pay you the big bucks to be the boss.