I have written about this before, a classic mistake made by politicians is to see correlation (college graduates generally earn more) and ASSume they can just expand the population going to college and everybody will earn more money and there won't be any unintended consequences.Script said:Student loan system is almost inexistent in Japan. There is small-amont, government-based support though (not enough to pay for tuitions, just a little help for rent etc).
Findings have shown that students who benefitted from support are indeed able to get better (paid) jobs later in life.
There are better ways to improve the education level of the public than just making borrowing easy. Just like too easy lending made the housing bubble, we have seen a similar cost increase in college tuition as they soak up all the extra money, and worse lower the standards of that education to accommodate the expanded population of new students.However, these people tend not to be better off automatically. On the contrary: simply because they spend money and time to pay back their debts during the prime time of their work/employment lifetime.
Technology has made it so much cheaper to deliver course materials including lectures via electronic media, such that the government could just about subsidize free education for anybody with web access. This too would cause economic distortion as the old business model of college institutions crumbles under the weight of their obsolescence.Clearly, although better employed, there is no significant rise in or incentive to marry or/and have kids for example (which is vital for the future of any society).
This makes me think that student loans are rather useless in the first place.
Student grants based on performance and/or a combination of subject-related criteria seems a much better system to tap into talent.
It was an interesting split decisionJohnRoberts said:This thread appears to be a monologue but many may not get much real economic news, so here goes another tidbit.
SCOTUS just overturned the 1992 precedent that states couldn't collect sales taxes from out of state merchants for out of state sales. Small internet businesses (like me) are now liable for out of state sales taxes.
JohnRoberts said:Job openings have just exceeded the number on unemployment. This means it "should" be easier to find jobs and will increase upward pressure on wages.
The lack of qualified workers could actually limit economic growth (still arguments about our ability to grow GDP faster than 3% but now they are grasping for different excuses for why we can't).
The rate of productivity increase is slower than it was before but still slightly increasing.
The headline is that states can now collect millions of dollars from internet sales occurring outside the states. The reality is that this will not be trivial in practice. First the large web retailers are already collecting and paying state sales tax, so the headline numbers may be exaggerated. Collecting from the smaller retailers will be more work for less revenue.dmp said:It was an interesting split decision
KENNEDY, J., delivered the opinion of the Court, in which THOMAS, GINSBURG, ALITO, and GORSUCH, JJ., joined.
THOMAS, J., and GORSUCH,J., filed concurring opinions.
ROBERTS, C. J., filed a dissenting opinion, in which BREYER, SOTOMAYOR, and KAGAN, JJ., joined.
It seems this overturned a long held precedent.
I wonder how it will affect state coffers and if this will reduce the incentive of companies to locate in low tax states.
... inflation happens only when wages rise, and we aren't seeing serious wage increases yet, only modest increases.
Yes the last budget was too big, and attempts at rescission have failed. President Trumps $60B rescission package in April has already shrunk to $15B by June, and is still missing in action. So yes the Republicans are big spenders too.dmp said:On the macro economic picture, some recent news on the USA finances.
The deficit is increasing again as the chart here shows. The deficit hit a high in 2010 after the great recession, and decreased over the Obama admin. Now with the Republican tax cut and spending increases, the deficit is projected to go further into the red.
cough,,, Glad to see Larry survived his mild heart attack. He should be a voice of moderation and wisdom among President Trumps economic advisers. One voice among several does not move the needle that far but I am glad he is in that room.Recently the white house made news when Larry Kudlow spoke about the Fed policy. Like many parts of the USA Gov, administering monetary policy is supposed to be separated from politics
The Trump WH is way too invested in watching (and taking credit) for the stock market. The market goes both up and down so this could end embarrassingly badly, but probably not before Nov. I have been selling stocks lately but mostly because I'm old and up.From WSJ:
"President Donald Trump’s top economic adviser said he hoped the Federal Reserve would raise interest rates “very slowly,” breaking with a 25-year White House precedent of generally refraining from commenting on monetary policy."
The fed has been trying to manage this grand experiment for a decade now. In that time the world economies have become even more intertwined. While not strictly correlated the liquidity pumped in by central bankers is fungible and has increased economic activity across the world.Now the question is, how much pressure will the white house exert on the Fed to keep the rising debt level manageable? Higher interest rates make debt more expensive. And when the interest causes the debt to increase it is a dangerous kind of positive feedback.
The FED has an inflation target that it is only now hitting, inflation has been below target for some time. The obvious concern is about having no dry powder to use for stimulus the next time it is needed. You can't reduce rates below zero (while some central bankers even do that). So we need to get rates higher, but gradually as the economy grows.Low interest rates in an 'overheated' economy are generally believed to allow high inflation, which is why the Fed is raising rates.
Inflation is classically considered a money supply issue, more money chasing the same economic output results in higher prices.But inflation happens only when wages rise, and we aren't seeing serious wage increases yet, only modest increases.
Yes, way too invested in watching and, even more so, taking credit, but...The Trump WH is way too invested in watching (and taking credit) for the stock market. The market goes both up and down so this could end embarrassingly badly, but probably not before Nov.
November is the mid term elections for congress so he/they can (probably?) continue to brag about the economy (stock market) past then.Script said:Yes, way too invested in watching and, even more so, taking credit, but...
What is supposed to happen in Nov (November?) ?
"I'd be rich if I could predict the future. I can't even call elections"
They wish they could predict it tooboji said:Well it doesn't help when you can't trust any published win probabilities.
I voted, even though I expected to lose, but i always vote... and can resist the "force". ;DI had a rude awakening when my blind trust of NYT got the "Hillary is 95% probable to win" message they kept blasting for weeks about as wrong as possible.
How many people didn't run to the polls or submit absentee ballots because they thought, 'why bother? It's a clean sweep!'
I heard other "pundits" weren't giving such high probabilities. Regardless, if they're not predicting anything less than a 100 percent probability, they didn't "predict wrong" in a statistical sense. Sometime five coin flips DO come up as five heads.boji said:Well it doesn't help when you can't trust any published win probabilities.
I had a rude awakening when my blind trust of NYT got the "Hillary is 95% probable to win" message they kept blasting for weeks about as wrong as possible.
That's harder to say.How many people didn't run to the polls or submit absentee ballots because they thought, 'why bother? It's a clean sweep!'
A modern problem is voting across several time zones with access to instant media analysis that could easily discourage west coast voters, if they think their vote doesn't matter.benb said:I heard other "pundits" weren't giving such high probabilities. Regardless, if they're not predicting anything less than a 100 percent probability, they didn't "predict wrong" in a statistical sense. Sometime five coin flips DO come up as five heads.
That's harder to say.