Thursday, August 1, 2013

Why Student Loans Are The New Adjustable Rate Mortgage

If I've learned anything about our country it’s that we are fond of biblical teachings and the founding fathers. I want to share a bit of both. Leviticus 25:35-37 “If any of your fellow Israelites become poor and are unable to support themselves among you, help them as you would a foreigner and stranger, so they can continue to live among you.  Do not take interest or any profit from them, but fear your God, so that they may continue to live among you. You must not lend them money at interest or sell them food at a profit.”

I bring this up because congress just passed a comprehensive student loan bill that attaches interest rates to the improvement of the economy. This sounds good considering rates were going to be over 6% for undergraduates this upcoming school year, but the reality is that these rates could be 8.5% in less than a decade. We are basically doing to college tuition what we did to the mortgage industry. We watched Adjustable Rate Mortgages destroy the wealth of many middle class Americans, and now we have forced a similar system on to our youth.

James Madison once said, "The primary function of government is to protect the minority of the opulent from the majority of the poor." I’m wondering if I'm being too literal in my interpretation of these words. The idea of the Federal Republic is to concentrate power into the hands of a select few.

As I spend more time with biblical and historical texts the differences between them becomes more pronounced. Our kids are being saddled with the equivalent of a mortgage by the time they graduate. I can't understand why investment banks can borrow our tax dollars at a lower rate than our kids can.

We worship a free market system that sends our jobs overseas to Communists countries, hides the profits in more friendly countries, and speculates on future debt. Instead of addressing the issues that have a bearing on our lives, we argue and fight over the details. This is the tragedy of the Occupy Wall Street movement and the TEA party; both want very similar things, but won’t work with each other to get them.