In January 2008, President George W. Bush was scrambling to bolster the American economy. The subprime mortgage industry was collapsing, and the Dow Jones industrial…
Don’t look now but there’s another giant bubble out there. It’s so big it rivals subprime.
I’m talking about the student loan bubble.
Recently, the outstanding volume of student loans passed $1 trillion. What’s more bothersome is that the average individual amount owed by new college graduates has passed $25,000.
With college costs zooming upwards faster than inflation, this is rapidly becoming another subprime mortgage-like sinkhole.
Just like subprime, the problem is that people of modest means are being suckered by high-pressure salesmen into taking on too much debt.
The difference is that since student loans are government guaranteed and can’t be released in bankruptcy, the burdens will be paid by the unfortunate ex-students and the U.S. taxpayer.
The standard justification for soaring higher education costs is a simple one.
The United States needs to maintain an educational lead in order for its wage levels to remain above those of its competitors.
I’m talking largely about emerging markets, which have been helped enormously by modern communications, making global sourcing much easier than it was.
There are two problems with this view.
November 10, 2011
Europe’s Banks Turned to Safe Bonds and Found Illusion
By LIZ ALDERMAN and SUSANNE CRAIG
PARIS — As the bets that European banks made on United States mortgage investments went bust a few years ago, bankers piled into what…
Three years ago the most-powerful instutitions in America were the nation’s largest banks and brokerages, Wall Street for short.
While millions of people were losing their homes, their jobs and their savings, the nation’s elite extracted a $700…
September 8, 2011, 10:00 pm
Settlement Said to Be Near for Fannie and Freddie
By BEN PROTESS and AZAM AHMED
Daniel Rosenbaum for The New York Times
Robert Khuzami, the Securities and Exchange Commission enforcement chief, is said to h…