The mountebanks of fantasy economics continue to ply their deceptive trade with the latest attempt to “ease the burden” imposed by the spiraling cost of student loans.
With much fanfare and even more gibberish, the Obama administration announced the expansion of a program, beginning in December 2015, that allows borrowers to cap their repayments at 10 percent of monthly income (no matter how much they borrowed) and even forgive those loans after 20 years (10 years if they work for a nonprofit or for the government).
So, who picks up the slack? Taxpayers, of course, to the tune of $7 billion in the first year alone. Companion legislation before the Senate that would make taxpayers the primary refinancing bank for higher-interest student loans would soak the public for an additional $58 billion over 10 years.
“(W)e think this is something that would be fantastic for the economy,” said Education Secretary Arne Duncan.
All of this is the definition of madness. Government intervention — subsidizing higher education — directly fueled the explosion in tuition costs by repeatedly giving colleges and universities cover for jacking up those rates far in excess of inflation. Now, to cover the lies of past interventions, government intervenes again, decrying the very results that its perpetuation of the vicious cycle guarantees.
This is what passes for government policy these days. In the real world, it's better known by its more common name — fraud.
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