Obama's latest attempt to look like a real liberal is student loan reform. And he's really running with it, having a big mock fight with Congress and everything.
Problem is, it only really affects future students. Hypothetical go-getters who will only have to pay 1% interest on their degrees that don't guarantee a happy middle-class life anymore. Those of us still propping up the trillion dollar debt bubble will just have to grin and bear it.
Except we won't. We can't - not with unemployment still up and demand still down. The United States can run on deficits indefinitely but private citizens have to answer on their debt. Or default.
Like the housing market. Remember that? Billions of dollars, the wealth of millions of citizens, and it all went up in smoke overnight. Because it all ran on debt that couldn't be paid back.
Whether that was because banks made predatory loans or because the Big Bad Gub'mint forced banks to loan to lazy black people is a point still debated by idiots. What matters is that the defaults happened and sent Wall Street's debt-financed party van straight off a cliff. And as regulation doesn't exist in this country, they've loaded up a brand new bandwagon of unsustainable debt products.
Including student debt. That trillion dollars millennial college grads owe is being chopped up and passed around same as mortgages were in the Bush years and - same as mortgages - they're an utterly hollow investment. A trillion Dead Souls that only look impressive on paper - as anyone who tries to collect will soon learn.
Default isn't easy with student debt - as I pointed out just two weeks ago. You can even have your wages garnished, assuming you're getting any. But courts already favor banks in foreclosure cases and that hasn't made housing prices return any more than the vast shadow inventory of bank-owned ghost towns. So while default may be bad for you personally, it'll do as much for the debt-party as a collapsed vein will for a vampire.
At it's peak, the housing bubble was sporting 350,000 home sales for about that much each. That's a lot but it ain't a trillion. And with the way this country has absolutely lost its shit since the housing crash, you'd better be plenty scared of what will happen when the student debt bubble bursts in the very near future. People might even start to take those libertarian whackadoos seriously, start wearing gold foil hats or something...