President Obama Is Looking To Extend The School Year

The left wing has done its share of revisionism too, I might add.

Gator, I would suggest you copy your post above and send it to Mr. Putin. Russia has not only not apologized for what it did for its 75 years in power, it seems determined to recreate the Soviet Union or Russian Empire. Our current foreign policy seems to be "don't offend anyone," so we'll see how this plays out over the next few years if Russia decides to get aggressive.

Ensign, interesting that you say that Clinton's failure becomes "our" inaction, yet anything done or not done by those you oppose becomes specifically a "right wing" issue.

The military campaigns that the Clinton administration oversaw had very little, if any Republican support, so I don't see how you could give them much credit for those successes. In contrast, Republicans and Democrats alike, in both the administration and in Congress, sat on their collective hands while genocide in Rwanda went on and on. I'd say that qualifies for the term 'our'.

Remember the scene in Mean Girls where Gretchen Wieners says, "I'm sorry that people are so jealous of me... but I can't help it that I'm so popular." Yeah, that's pretty much the US for most of the last decade. Our wealth and success (what little we still have) comes at the expense of others. While you certainly don't need to be ashamed of that, assuming you're playing fair in the first place, you also don't wave it in the face of others with arrogance and expect that no one is going to mess with you. Great power has to be balanced against a certain amount of humility and a willingness to do the right thing with that power. The US has largely failed to do that, and that's not good for us in the long run in foreign policy terms or macroeconomics. We don't live in a vacuum independent of the rest of the world.

GoBucks89 said:

***I never said the feds were making direct loans under ECASLA. I said they were effectively making direct loans. Big difference.

I said synonymous. My point is still that they were not effectively making Direct Loans.

***How could the feds have replaced FFEL with direct loans in May 2008? It was emergency legislation enacted to make sure college students were able to pay tuition in fall (which also helped out colleges/universities who were depending on those tuition checks). To go to direct lending, the feds needed to work with colleges/universities to establish procedures and to arrange for servicing of the loans. They didn't have time to do that in May 2008. What they did was totally seemless to colleges/universities and students even though it fundamentally changed the economics of the program.

Here's a better source of information about what was going on at the time.

The procedures you reference are already in place, so time was not an issue. (Pell operates just about the same way Direct Lending does with the exception of the promissory note and many school service their own Perkins loans currently and have procedures to do so.) The legislators made a conscious decision at the time not to go in that direction and part of the reason was to preserve the lenders interest in the FFEL program.

***That is exactly why what the feds were doing under ECASLA was effectively making direct loans. Look at the economics of the program. If I am a student loan lender with $100 million of existing student loans on the date the program starts, the feds buy those $100 million in loans from me and I then use the fed proceeds to make new student loans of $100 million, have I really made any new loans from an economic standpoint? As a result of the program, I have the same amount of loans outstanding (to different students yes, but with the fed guarantee there isn't any difference in risk levels though I will receive checks from different people) and my cash position hasn't changed. The feds have $100 million of additional loans and $100 million less cash (and really they have $100 million more in debt because they needed to borrow the money to buy the student loans from me). Now lets compare what would have happened if the feds had just been making direct loans under the May 2008 legislation. I still have the $100 million of student loans and my cash position doesn't change. The feds have $100 million of additional loans and $100 million less cash (or again, owe more debt having to borrow to make the loans). Not much of a difference.

Well, again, I think that article helps here. But you, the bank, are still receiving accrued interest on the loan from the point the loan was issued until the feds buy it from you not to mention some fees depending on the option the bank participating with. Had the federal government been making Direct Loans, you the bank, would have received nothing on the new loans. Thus the reason the banks didn't like that option very much.

***So first it was a bank bailout. Now its a FFEL bailout? :)

Yep, that's what I said. There's little difference in my opinion. The largest interest in FFELP is held by the banks. There would be no need to bail out that program without the banks wanting to protect their interest.

***Article that you linked indicates that the government has already contracted with the 4 largest education lenders to service the government's direct loans. So as a result, as the article also indicates, from a practical perspective most students won't notice a difference between direct loans and FFEL loans.

The article does reference the four largest education lenders gaining the contract to service Direct Loans. What it leaves out is that those lenders needed to be Guarantors, as well, to qualify. Not all lenders have the ability to service the loans and even those that do will be making a lot less money now.

I have to tell you, while I'm sure you believe yourself to be making sound debatable points, what is clear to me is that you have lost perspective on the bigger picture and I don't even know what your point is any longer.

To that end, I'm ending my part of this discussion.

RatherGoodBear said:

Gator, I would suggest you copy your post above and send it to Mr. Putin.

I did...he said "nyet!". ;)

Seriously, do or don't....just remember that in the court (lower-case c) of World Opinion that it matters a great deal what others think of you. Russia invaded...(Georgia was it?) and immediately saw *Billions* of dollars heading back to the Europeans bankers from whence it came. Finance is the means by which "good neighbors" will punish those who misbehave...and right about now, I'd rather be considered a "Most Favoured Nation" when the Europeans are considering who to do business with...

edited to call attention to one word in Jeff's post above: HUMILITY. It costs nothing to display, but benefits everyone when you want to negotiate as equals...and since this is no longer 1950 and the Marshall Plan is no longer in effect, we might want to consdier our allies as such.

It will be interesting to see how the US deals with the decline of its significance relative to the rest of the world over the coming decades. My guess is it won't be pretty.

carrie -- I accept your offer to end the discussion about student loans. But please tell me what you do for a living doesn't involve teaching others about finance. :)

Getting a final snide remark in doesn't make you right and putting a smiley face at the end doesn't make you less of an ass.

America gives much more foreign aid than any other country. We have spent billions on helping Africa combat AIDS and not too long ago they began trails of an AIDS vaccine in Africa thanks to us. We were the first to respond to the tsunami in Asia a few years ago with our Navy and provided the people with billions of dollars of assistance. We have hospital ships that provide care for sick people in other nations. Those are just a few examples of our generousity as a nation. We have nothing to apologize for. We don't wave our success in the face of others. We are the most powerful nation but we are also the most generous.

Clinton, not the Republicans, is to blame for Somalia. He pulled the US out of Somalia and let the warlords run free. Then he sent in troops when it got bad, but without armor getting many killed. Then instead of going back stronger he let the prisoners go and left leaving Somalia to become what it is now.

Seems to me that if I wanted to be an ass, I would have gone point by point through your last post showing how it evidences a lack of understanding of principles of finance and/or is flat out wrong. And I would have asked why you would link an article that contradicts the point for which you linked it and supports what I had said (and which you were attacking). But I didn't want to be an ass so I didn't do that. Though I must admit that now that you have called me a name, I don't care about decorum as much.

And I stand by that last statement. One of the biggest educational problems we have in this country is a lack of understanding of basic finance/economic principles. And that problem is only compounded when you have people who do not understand those principles teaching others.

GoBucks89 said:
It will be interesting to see how the US deals with the decline of its significance relative to the rest of the world over the coming decades. My guess is it won't be pretty.

Significant in what way? And what does that have to do with anything? Your hyperbole makes not a debate.

Primarily economically. Over the next several decades, our economy will not grow at the same rates as many other countries (particularly China and India). So relative to the rest of the world, our economy becomes less significant. And our continued acceleration of consumption via debt won't help. And its relevant because much of any given country's power in the world is dependent on its economic power. Valued trading partners get more attention/favorable treatment. Someone else noted in this thread that we often vary our response based on economic interests in other parts of the world (ie. oil). If it wasn't for oil, Saudi Arabia likely would have been blown off the map as the home country for most of the 9/11 terrorists and known sources of funding for terrorists. But because they have oil we hold hands with their kings and do nothing. As our economic power declines relative to the rest of the world, our power in the world (short of pure military power) will also decline. Other countries will be more likely to oppose us and less likely to support us.

And based on our country's history, I think that will cause a lot of problems. This country was founded and continues to exist on pride that borders on arrogance (and often times that border is crossed). And that has largely served us well. However, embedded in that is this notion (believed by many) that we are the best country in the world, universe, history of time, ever, etc. When that changes, there will be a lot of adjustments.

And I find it interesting to get called out for hyperbole by the guy who said "Our wealth and success (what little we still have) comes at the expense of others."

What you describe is globalization. We've been resisting that equilibrium for a long time. It's not going to negatively affect the US provided we learn to play in the sandbox.

Arrogance under the guise of pride has never served this country well. Ever.

Carrie M. said:
Getting a final snide remark in doesn't make you right and putting a smiley face at the end doesn't make you less of an ass.

Crap. Under those rules, I've lost every debate...ever. ;)

Awesome!!

Certain folks in the US certainly have resisted the effects of globalization for a long time and continue to do so. The process began (at least on a truly global scale) when Columbus left Europe in a boat. As with most things, there are winners and losers in that process. Typically its the losers who complain about the process. But prior to about the 1970s, the US didn't really have many (if any) losers in the globalization process. At one point, we were the low cost provider. And throughout our history, we have done incredibly well with globalization. In the 70s, we saw rumblings by those in the manufacturing sector who were displaced in the process. We continue to see more rumblings as more jobs are displaced in the process. And that is all part of the process. But all throughout that process, we had the world's largest economy and thus had a lot of power. That will not be true forever. And I think the changes that are associated with it will not be easy for us to make (particularly not looking back at our history and relative position in the world throughout our history to date).

And how well we do going forward will depend on how we react. But everyone doesn't show up to the sandbox on equal footing. Relative power matters. And in the coming decades we will be in the sandbox with relative power levels that we have not experienced at any other time in our history. I think it will be interesting to see how we react to that.

And arrogance under the guise of pride is not a good thing. But as you noted (or maybe it was someone else, I can't remember), the world isn't as simple/easy as black and white. There is a fine line there and its often extemely difficult to tell the difference.

What's the difference between arrogance and pride? You can swallow one. Seriously, the fine line is whether you listen to your "allies" before making rash decisions (allies in quotes because if you don't listen to them, they don't stay allies).

Lord Gonchar said:

Crap. Under those rules, I've lost every debate...ever. ;)

Well, there ya go! ;)

^^ Except just about every one of our allies has acted in its own self-interest first, and then the common good after that as it suits them. And I don't mean what "we" have wanted them to do. France maintained trade with Syria and Iraq despite UN approved sanctions. Israel continues to build settlements in territory given to the Palestinians through signed agreements. Those are just a few examples of what I would call arrogance on the part of our "allies" as well. I don't see the need for us to ask the world's permission to fart, when the rest of the world does as it pleases.