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Another way to look at the student loan legislation is that it basically halves the doubling time of the principal itself. It WILL mean the difference for many Americans in being able to pay off that loan or not.

It's simple insanity that it could possibly bring in extra revenue, as a lot of revenue will be lost in a declining economy due to those same people not contributing as they could do otherwise. It's nothing short of putting a leg iron on many of the most promising young Americans.

One thing not mentioned in the CNN article is that the rate for parents paying for their children's education will be capped at 10.5%. Because, clearly, they can afford it. Why else would they take out a loan?

Beyond the corporate tax rate, or tax rates for the highest incomes, or closing loopholes, our yearly defense budget is over 8,000x (not an exaggeration) the amount of extra revenue generated from raising the student loan interest rates. We couldn't shave off 1/8,000th of that?

I see Washington and politics as basically being about who gets the money. All the struggles going on right now come down to that simple element. Inside that struggle, factions constantly battle over who gets to sport the crown for the day. It's all pure self-interest. In this arena, money speaks the loudest, and so, more money naturally flows towards more money. There's nothing benign about it.

Ken Barrows

Mr. Bernanke, please respond to my comment:

There are been three periods of US economic history since 1900. Period one was 6% - 7% yearly increase in oil consumption until the early 1970s. Period two was exploding debt as measured by total credit market debt/GDP from 1970 to 2008-09. Period three is your institution buying assets by making money out of nothing. What do you think period four is?


Maybe I am dense, but my reaction to Benny's mantra of "push the rationality postulate as far as it will go" is that he is talking about bending the definition of rationality until it absorbs what any sane person would call irrationality.

With these guys - blinkered from reality like over-fed skittish horses - it's all about keeping up appearances despite all the evidence that they are wrong, twisting logic to intolerable levels. But then they belong to a club of bipeds who cannot see anything other than social status and dollars in personal accounts as measures of 'success'. To outsiders like me, that puts Bernanke and Co into a human grouping that ought to be termed The Primitives.

For fuck's sake, how much enlightenment does it require to understand that whether you die rich or poor, having no humility about screwing people over is the worst kind of bestiality on this sad planet, on a par with rape and murder. I'd rather kiss a hungry shark any day.

Dave Cohen


Re: bending the definition of rationality until...

Yes, that's exactly right.

-- Dave


Exactly, you can't rationally expect homo economicus to act rationally if you have been paying attention to the evidence. It stands to reason then, that homo economicus' will believe that they are acting completely rationally, and pushing the rational postulate, is just rational behaviour.

Mike Roberts

Speaking of oceans, I recently came across this talk by Jeremy Jackson:


He doesn't include much optimism.

Alexander Ač


isn't it than Ben Bernanke himself is the best example of irrationality and destruction? Oh my!


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