derivative (Noun): A security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties.
By Douglas V. Gibbs
When the housing bubble burst, the fingerpointing went everywhere except where blame was actually due. The liberal democrats accused republicans of causing the subsequent recession, and blamed President George W. Bush's policies for the financial failure.
Subprime mortgages were the culprit, and that has been recognized, but the reasons behind the existence of the subprime mortgages where low-income debtors that had no business borrowing that kind of money were signing mortgage papers were shrugged off and ignored by the press, the politicians, and the bankers. Loans were being dished out to people who could not afford them under the direction of the political establishment, and when the high-risk loans began to go unpaid, the banks sold them as derivatives to get the worthless paper off their hands. Once the investors realized their investments were worthless, they too sold the derivatives to unsuspecting investors. Eventually, the species of unknowing investors became extinct. There was nobody left to buy the worthless loans, and so the system collapsed.
The liberal premise was that everyone deserves a home, and in line with policies like the Community Reinvestment Act, loans were ordered to be given to anyone and everyone to make sure even the poor were able to achieve the American Dream of owning a home. . . even if they can't afford it.,
The liberal promise is that everyone deserves an education. In line with Obama's policies of making sure everyone gets a student loan, which The President believes he has ensured with his federal takeover of student loans, loans for a college education are being dished out rampantly with no concern over if the debtor can repay the loan. With the weight of loan defaults becoming too much for the system to survive, the student loan bubble is about to burst.
Except, there is a difference.
Obama is in position to become a hero to all of those people that aren't on entitlements. . . yet. The President, with one stroke of a pen in the form of yet another unconstitutional executive order, can forgive all of those loans, and free America from the shackles of the bursting student loan bubble.
The democrats don't care if handing out degrees so freely cheapens the value of the collegiate accomplishment. Making sure people receive an education is not truly their goal. This is all about buying votes, and indoctrination in the classroom.
Student loan debt in America is at $1 trillion. One in five households have student-related debt of over $26,000. Unlike credit card debt and mortgage debt, however, student loans cannot be discharged by bankruptcy. More striking is the fact that in 2011-12, the federal government issued 93 percent of all student loans.
Loans for education are easy to get, and are not tied to the ability to repay. Knowing this, education is rising in cost because, like with the doctors knowing insurance companies have deep pockets, colleges know that with the student loan industry they have access to what seems to be an endless money supply.
The public has been wrongly convinced that education is a right, and the new reality is that decent employment is depending more and more on a collegiate degree. But because of the cheapening of the value of a bachelor's degree, now it has become necessary to pursue a master's for any hope of achieving what was once the domain of a lesser degree in terms of income, and status.
In the end, when the student loan bubble bursts, and the government has no other choice (their words, not mine) to forgive all of those loans, the democrats will try to blame the GOP, and any other group they see as opposition, accusing those non-liberals that the radical right-wing crazy people caused this because they don't want all Americans to have a righteous education. . . insert charges of racism, bigotry, etc.
As the student loan debacle begins to reach maximum capacity, the democrats are also beginning to spin the cogs of yet another mortgage subprime disaster once again. It is not about learning from past mistakes. This all is about power, money, and eliminating viable opposition.
-- Political Pistachio Conservative News and Commentary
Student Loan Crisis Solved, Next Problem? - Forbes
Student Loan Debt Crisis: How'd We Get Here and What Happens Next? - Time
Is the student loan bubble about to pop? - Human Events
Obama wants to try that whole "subprime mortgage" thing again - RedState
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