Half of the US government's financial assets are student loans

Re:Half of the US government's financial assets are student ... by aggronn on Friday January 12, 2018 @05:05PM (#16136738)

Okay you piqued my interest... "bad monetary policy" usually means we should be on the gold standard, but I've never heard that before as a solution for student loans. What are you proposing is the monetary fix?

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Re:Half of the US government's financial assets are student ... by eemax on Friday January 12, 2018 @05:27PM (#16136900)

A gold standard is terrible monetary policy, even worse than the status quo.

Good monetary policy would be the fed doing NGDP level targeting a la Scott Sumner: https://www.mercatus.org/system/files/NGDP_Sumner_v-10%20cop...

Monetary policy only goes so far though, if you actually want to distribute resources in an equitable way, you probably also need good tax policy.

Good tax policy would be taxes which decrease wealth inequality (e.g. luxury consumption taxes, land value taxes).

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Re:Half of the US government's financial assets are student ... by adamson on Friday January 12, 2018 @07:21PM (#16137468)

I don't think the Mercatus Center is the best place to look for good or sincere ideas on how to distribute resources in an equitable way

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Re:Half of the US government's financial assets are student ... by koolba on Friday January 12, 2018 @05:15PM (#16136811)

Rampant inflation would fix those student loans real quick. Ditto for discharging the crippling mortgage payments and credit card debt.

Not suggesting I recommended it but it is an option for an across the board sweep.

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Re:Half of the US government's financial assets are student ... by wonder_er on Friday January 12, 2018 @05:38PM (#16136958)

not OP, but taking a stab, since I agree with their assessment:

bad monetary policy, in regards to student loans, means subsidizing them in two ways (at least):

1. paying the difference in interest rate compared to going to a regular bank. I can get student loans w/3% interest, but a bank wouldn't give me that money for less than 7%.

2. Making it illegal to disperse student loans in bankruptcy.

Both of these are monetary policy decisions that "hide" risk.

The higher interest rate is to compensate for the riskiness of the loan, while making loans illegal to disperse is the gov't response to the risk.

both of these will hide increasingly large amount of risks, where everything looks like its going fine, until it will all fail, catastrophically.

The politicians will claim no one could have seen it coming, but if they'd not allowed the risk to be so hidden, they'd have seen the institution crumbling decades before.

edit: formatting

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