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A comment on The Real Cost of the 2008 Financial Crisis. Parent comment

Re:The Real Cost of the 2008 Financial Crisis by slg on Tuesday September 11, 2018 @11:10AM (#17960428)
You see a similar thing with student loans. You can't make any reasonable system work when you set the requirements to be that everyone should be able to afford to go to college and free market lenders are the ones responsible for making that happen. I imagine that the first condition is one that most people agree one. So instead of making college cheaper for those people who can't afford it, we decided that we need to entice more lenders to make loans that are financially unsustainable. The end result is we need to guarantee the loans that private businesses give 18 year olds. You see it time and time again where there is a easier and more logical solution that the US refuses to implement because it is a little bit socialist. Instead we go with a more complicated and less practical solution that is more pro-business.
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Re:The Real Cost of the 2008 Financial Crisis by learc83 on Tuesday September 11, 2018 @11:35AM (#17960656)
We haven't guaranteed student loans since 2010 when the government started directly issuing student loans.

Today 91% of student loan disbursements are public loans that are funded directly from the treasury. The remaining new private loans aren't federally guaranteed (although we still make it difficult to discharge them in bankruptcy).

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Re:The Real Cost of the 2008 Financial Crisis by slg on Tuesday September 11, 2018 @11:59AM (#17960911)
Undergrad students are limited to $31k or $57.5k in federal loans (including only $23k of subsidized loans) depending on whether they are a dependent or not. [1] That is still not enough for many students to attend their college of choice.

I will admit I chose the wrong word in my prior comment when I said guaranteed since that has a very specific meaning in this context. I was using that phrase more colloquially because there are other ways that the government protects the lender beyond a literal guarantee. For example, student loan debt cannot be discharged in a bankruptcy like mortgages, medical debt, or credit card debt. This was done because a private lender is normally heavily disincentivized from loaning money to someone with no credit history, no collateral, no income, and no expectation to start making payments on the loan for years.

[1] - https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsid...

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Re:The Real Cost of the 2008 Financial Crisis by learc83 on Tuesday September 11, 2018 @06:28PM (#17963961)
It's enough that only a small percentage of students are taking out private loans. New private loans are a very small part of the problem.

I'm not really concerned with whether or not students are able to attend their "college of choice."

If government loans provide enough to go to a state school, or even enough to live at home or off campus and go to a community college for the first 2 years, I'm fine with that.

Also you'll notice that I mentioned bankruptcy in my comment.

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Re:The Real Cost of the 2008 Financial Crisis by paulddraper on Tuesday September 11, 2018 @11:32AM (#17960625)
What is the easier, little-bit socialist solution to home ownership?
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Re:The Real Cost of the 2008 Financial Crisis by stale2002 on Tuesday September 11, 2018 @01:52PM (#17961852)
The answer is to create laws that allow developers to build more housing.

The price of housing in many high cost of living is completely unrelated to how much it cost to build the apartment building.

Or in other words, the actual construction of the building is the easy part. It is the government that is getting in the way of reduced prices

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Re:The Real Cost of the 2008 Financial Crisis by paulddraper on Wednesday September 12, 2018 @02:18PM (#17971507)
> The answer is to create laws that allow developers to build more housing

I didn't know reducing regulation on businesses was the socialist solution. But yeah, sounds good to me.

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Re:The Real Cost of the 2008 Financial Crisis by stale2002 on Wednesday September 12, 2018 @03:43PM (#17972426)
Well, presumably socialists care as much about allowing people to give cheaply as do free market advocates.

I am not sure why a socialist would be opposed to lower living expenses for poor people.

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Re:The Real Cost of the 2008 Financial Crisis by slg on Tuesday September 11, 2018 @12:00PM (#17960920)
Taxes and tax incentives.
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Re:The Real Cost of the 2008 Financial Crisis by dragonwriter on Wednesday September 12, 2018 @02:38PM (#17971692)
But not the current ones.

We should, if we want to use tax policy to promote home ownership outside of the wealthy, be subsidizing principal payments for owner-occupied primary residences meeting certain local and personal affordability standards, and possibly tax-favoring sale proceeds for sales of property when, after sale, it will be owner-occupied primary residence meeting affordability standards.

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Re:The Real Cost of the 2008 Financial Crisis by paulddraper on Tuesday September 11, 2018 @12:20PM (#17961106)
The U.S. does that. Loan interest and capital gains are treated much differently by the U.S. tax system if they are on a primary residence rather than on other assets.

(More often than not, I see criticism of this on HN.)

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Re:The Real Cost of the 2008 Financial Crisis by slg on Tuesday September 11, 2018 @01:17PM (#17961566)
Those benefits are regressive which results in the them barely moving the needle for working or middle class families. It goes back to the original comment in this thread that it is implemented in such a way that it has a nearly opposite result to its supposed intended effect.
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Re:The Real Cost of the 2008 Financial Crisis by paulddraper on Tuesday September 11, 2018 @03:06PM (#17962367)
I agree. That is often the case with taxes and tax incentives.
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