Debt bubble poses generational danger

The student debt bubble has continued to inflate.

According to Slate, student loan debt is now at $900 billion, two and a half times what it was just seven years ago, and large numbers of those carrying debt are falling behind.

The Fed’s numbers show that a startling 12 percent of borrowers aged 40 to 49 are at least 90 days behind. That’s a demographic that should be in the prime of their careers and free of such stress. The unemployment rate for that group is probably under 7 percent, according to Bureau of Labor Statistics data, significantly below the national average of 8.2 percent. Moreover, though joblessness has declined from its late 2009 peak of 10 percent, most age groups are experiencing higher rates of student loan delinquencies.

We are faced with the prospect of an entire generation, working to get ahead by getting degrees, burying itself under an unmanageable level of debt.

The problem is not, as Mitt Romney says, that students are not shopping around for cheap schools. And it is not just the banks’ outsized role in the student funding racket.

The problem is that we have been forced to borrow because there are few other funding options and school costs have skyrocketed.

We should be moving away from loans to direct grants to students and a massive infusion of direct funding to the schools themselves.

Romney, the empty suit

Matt Taibbi does not pull punches. His post to Rolling Stone on the Romney NAACP speech was a classic, taking apart the Republican nominee’s tedious political gambit and unmasking Romney for the soulless hack he is.

Romney really showed us something in his luridly self-congratulating N.A.A.C.P. gambit, followed by the awesomely disgusting “free stuff” post-mortem speech he delivered the next night in front of friendlier audiences. The twin appearances revealed the candidate to be not merely unlikable, and not merely a fatuous, unoriginal hack of a politician, but also a genuinely repugnant human being, a grasping corporate hypocrite with so little feel for how to get along with people that he has to dream up elaborate schemes just to try to pander to the mob.

There was a lot of Bill Clinton in Romney’s appearance and follow — call it Romney’s Sistah Souljah moment — but none of the warmth or personality that Clinton seems to exude. Romney lacks that, and much more.

Romney can’t even be mean with any honesty. Even when he’s pandering to viciousness, ignorance and racism, it comes across like a scaly calculation. A guy who feels like he has to take a dump on the N.A.A.C.P. in Houston in order to connect with frustrated white yahoos everywhere else is a guy who has absolutely no social instincts at all. Someone like Jesse Helms at least had a genuine emotional connection with his crazy-mean-stupid audiences. But Mitt Romney has to think his way to the lowest common denominator, which is somehow so much worse.

Most presidents have something under the hood – wit, warmth, approachability, something. Even the most liberal football fan could enjoy watching an NFL game with George Bush. And even a Klansman probably would have found some of LBJ’s jokes funny. The biggest office in the world requires someone who buzzes with enough personality to fill the job, and most of them have it.

But Romney doesn’t buzz with anything. His vision of humanity is just a million tons of meat floating around in a sea of base calculations. He’s like a teenager who stays up all night thinking of a way to impress the prom queen, and what he comes up with is kicking a kid in a wheelchair. Instincts like those are probably what made him a great leveraged buyout specialist, but in a public figure? Man, is he a disaster.

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  • Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
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What’s $200 million among political rivals?

The news on the state’s budget front was not good today, unless you are the governor and you view the nonpartisan Office of Legislative Services as a political tool of the Democrats.

The state’s revenues look to be about $200 million below the Christie administration’s estimates, creating a shortfall for the just-ended budget year and calling into doubt Christie’s 2012-2013 revenue estimates.

I’ve written this before, but responsible budgeting is based on the notion of conservative estimates: low-ball the revenues and over-estimate the expenses, which then limits the exposure in case something unexpected happens. Municipal governments are required to operate this way — they cannot anticipate more revenue for the upcoming year than they raised in the year about to end without prior approval. The state, however, does not, which makes the requirement that it balance its budget a sham.

It would be easy to blame Christie for this — it is his budget that we are talking about, along with his potential vice presidential ambitions or gubernatorial re-election campaign. Christie promised to end these shenanigans, but he is not the only one responsible. The selective use of revenue estimates is a time-honored Trenton tradition, as is the pretense that allows Trenton politicians to claim they are being responsible when they cut things like the Earned Income Tax Credit or delay pension payments.

New Jerseyans deserve an honest debate — and not the kind of silly name calling (Corzine Democrats, Bush/Rove budgeting) that passes for discussion these days.

  • Send me an e-mail.
  • Read poetry at The Subterranean.
  • Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
  • Suburban Pastoral, a chapbook by Hank Kalet, available here.

Unsustainable delusions

Angelo Villanueva, a stone mason, went from making $35 an hour doing brick and stone work on new buildings, to repointing older buildings to occasional work, until he had no income and lost his housing.

He ended up in Tent City in Lakewood about a year ago.

He told me he never expected to be out of work, that he always would be able to rely on his hands to make a living. That, unfortunately, is not the case.

Villanueva’s story is not unusual. As Peter S. Goodman points out.

You can easily meet people confronting such circumstances at food banks, homeless shelters, and in welfare offices. It used to be that those who landed in such straits tended to present a complex assortment of problems, from substance abuse to mental illness. More and more, people have been sliding into such states because of one dominant problem: They can’t find work.

The American economy remains in a funk. Forget the chatter that you’re hearing about a nascent recovery. Ignore signs of a housing market rebound. The only number that matters is the jobs number — or, more accurately, the without a job number. It is an indication that, despite the talk on the campaign trail and among the chattering classes on television, that there is something fundamentally wrong with American capitalism.

The economy is creating jobs, but not nearly enough to keep up with population growth and far from the number needed to put the millions who have lost their jobs back to work in something resembling their previous job.

“The horrendous job market is not a political story,” says Peter S. Goodman. “It is a national emergency playing out in slow motion, a catastrophe that has come to dominate life in millions of American homes.”

The persistent shortage of paychecks has seeped into our aspirations and made them smaller. It has eroded the basic American understanding about the supposed rewards of trying hard, getting educated and looking for work — a formula too many people have been following only to wind up destitute, discouraged and dispossessed.

More than one in six are out of work or working at jobs well below what they think they should have, and an obscene number — 5.4 million — have been out of work for months. And that has forced them to do things they never thought they’d do, like visit the local food pantry, a soup kitchen or something more dire, like sleeping in the woods.

What we appear to be going through is a tectonic shift. Our economy is not sustainable. We value the wrong things, and have put ourselves on a collision course with environmental and economic catastrophe. The economic and political elites either refuse to see what is happening, or they don’t care.

In the short term, we need a massive jobs bill — one far larger than the president even imagines, but we also need to shift away from the unfettered capitalism that has pushed us so close to the precipice. We should be identifying the goods and services that we believe are human rights — housing, food, health care — and ensure that they are available to all who want or need them, outside the markets. Access to healthy food or to food in general should not depend upon where you live, nor should access to doctors and a roof and a bed.

We are long past the time for change.

  • Send me an e-mail.
  • Read poetry at The Subterranean.
  • Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
  • Suburban Pastoral, a chapbook by Hank Kalet, available here.

Christie on Medicaid expansion

Gov. Chris Christie says there is not much room for New Jersey to expand Medicaid:

“Medicaid is pretty well expanded in our state already because of the legacy of previous Democratic governors. So I don’t know if there’s a lot more to do in New Jersey that regard,” Christie said on Fox & Friends.

It’s an interesting choice of words. My assumption is that he views the expansion of health coverage to the near poor as a terrible affront to freedom, though I’d bet the Democrats in question — McGreevey, Codey, Corzine and the Legislature — would view this as a legacy worth embracing.