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Monday, March 19, 2012

In defense of interest free student loans

For everyone moaning about interest free loans and why should the poor subsidize middle class educational aspirations - if you charge interest, the graduating student adds those interest charges onto their end fee - so every time you use a doctor, a lawyer, an engineer etc etc you will be paying for their interest built into the fees they will be charging. Removing interest free on student loans builds the cost into the fee later down stream and then EVERYONE pays more. That this very simple truth is utterly ignored by the right in their drive to inject user pays into the heart of education to kill off the remaining social contract isn't surprising, but I can't wait for the impacts of the increase in fees to start biting if student loans were removed. It's a case of NZ once again trying to save a dollar today which will cost us a thousand dollars tomorrow.



At 19/3/12 7:49 am, Blogger Nitrium said...

The key issue with interest free student loans is that it gives NO INCENTIVE to pay off the debt ASAP. So what happens is that inflation slowly decreases the real value of the the loan, and this lowers the value for money the TAX PAYERS who financed the loan get back when (if) it is eventually paid off.
I absolutely hate to have to quote the awful Margaret Thatcher, but she is right on this: "The trouble with socialism is that you eventually run out of other people's money."

At 19/3/12 9:07 am, Blogger fatty said...

"I absolutely hate to have to quote the awful Margaret Thatcher"

You don't have to quote Saggy Thather at all...she should not even be thought of in regards to education....unless of course you are considering what she paid for her education?
Remember those days when getting an education was paid for by the previous generation...NZ could even afford to do this for the statistical bulge that was the baby-boomers, paid for by the relatively small (but not greedy) previous generation.

Fuck Saggy Thatcher, fuck the baby boomers and fuck their concept of individualism.
I'll show you greedy wankers about individualism in a few years when I graduate with my Masters or PHD...I'm leaving this selfish shithole of a country, don't expect my tax to pay for the retirement of Kiwi babyboomers, don't expect my student loan in a hurry...baby-boomers pushed for individualism, they will have to live with it

At 19/3/12 10:27 am, Blogger Richard Christie said...

The inter-generational mud slinging indulged in on this blog by both owners and commentators is truly pathetic and only serves to debase discourse.

At 19/3/12 4:59 pm, Blogger Frank said...

The Alliance made this point when student debt was mounting. As an example, it was suggested that high student fees for dentists would have an eventual consequence; higher dentists' fees and fewer people having dental work done.

And so it came to pass; http://www.stuff.co.nz/nelson-mail/news/5854199/Costs-of-dental-care-hurting

At 19/3/12 5:05 pm, Blogger Frank said...

Richard; "The inter-generational mud slinging indulged in on this blog by both owners and commentators is truly pathetic and only serves to debase discourse."

And yet, "Fatty" has made a valid point. Though his delivery was a bit crude, his analysis and conclusion of inter-generation theft is spot on.

At 19/3/12 8:31 pm, Blogger jane said...

C'mon children, don't make generationalism be the new racism...that's just playing right into the evil thacherish agenda of divide and rule. Btw did you know she took countless acting lessons to perfect her silly faux "upper class" accent? Shame on you, Nitrium, for raising the un-dead. Run along and watch Twilight or something...

At 19/3/12 9:33 pm, Blogger Tim said...

I think what is often characterised on here as an intergenerational thing with fuckwit BabyBoomers is more to do with the fact that Hobbits (of ALL ages at the time AND SINCE) simply rolled over when the neo-lib agenda from the 80s onwards took effect. Some of the biggest 'individualists', those thinking that living on credit, indulging in the consumer society and so on are today's youth (or the offspring of the BBs). That's NOT to say though that Babyboomers haven't sold out future generations, but the younger generation continues to do so.

At 19/3/12 9:37 pm, Blogger Richard Christie said...

Frank, Fatty's point is absolute garbage on many levels, painting a whole generation as responsible for the actions of individual Governments, in NZ elected with minority support of the population in 1980s and 1990s, whose far right legislative activity essentially spanned under decade in total, gives the lie to the generalisation for a start.
Then examine the idealogues behind the Chicago School of economics, Milton Friedman, archetypical representative of libertarian economics was born in 1912 for christs sake, hardly a baby boomer. I could go on but it's hardly worth dignifying the claims with rational analysis.

At 19/3/12 10:24 pm, Blogger Nitrium said...

"Shame on you, Nitrium, for raising the un-dead. Run along and watch Twilight or something..."

Alright already, I apologise for mentioning the horrible Thatcher!
But the fact remains that NZ (and indeed most of the rest of the developed world) is in truly dire economic straights. We are collectively out of money and, contrary to neo-Keynesian theory, printing money does NOT create wealth. Options that don't involve cut-backs in Government spending are getting increasingly unrealistic/unsustainable.
Oh, and have not seen any of the Twilight films. Have I missed anything?

At 20/3/12 11:06 am, Blogger fatty said...

FFS Richard,

"Fatty's point is absolute garbage on many levels, painting a whole generation as responsible for the actions of individual Governments"

When I say baby-boomer I am not accusing every person from within that generation of being selfish...but the generation as a whole must be considered selfish. If I say Kiwi's are obsessed with rugby, I do not mean every single Kiwi. If I say a French accent is sexy, I am not saying that all people who are French are sexy.

I also never directly mentioned the Government...the current leaders of the red and blue neolib teams are far more destructive than any leaders of the 80s and 90s. They are a couple of pathetic aspirational wankers who continue to reinforce each others stupidity. I don't blame politicians, I blame voters. I blame the selfish and individualized ideology created and cemented by the baby-boomer generation.
Under 'democracy', Governmental policy is the result of an ideology...Governmental policy does not create an ideology.

You only consider my point to be 'absolute garbage' because you twisted it and failed to understand it.

I fail to understand your point about Milton Friedman...please elaborate, it makes no sense to me.

Finally, I am getting sick of hearing people being offended by 'intergenerational' hatred...people dismissing an argument as being a 'generational issue' are more often than not sitting within the privileged generation...just as those who are 'anti-PC' are usually older white men...just as those who are anti-Treaty are usually Pakeha...just as those who deny class issues are usually wealthy...just as those who claim sexuality as a non-issue are usually heterosexual.

If you are going to write off my statement as 'anti-generational' then you had better back it up with a real argument...otherwise I'll take your criticism as proof of my belief that another invisible privilege exists.
Remember, whenever you react to an issue by reducing it to 'inter-generational mud slinging' you might make yourself feel better, but you are effectively highlighting generational disparities...reminds me of how Israel use the term antisemitic.

At 22/3/12 3:49 am, Blogger Raph NZ said...

Solent Green is people and now we have the neutron bomb we should... kill kill kill the poor.
A long way from New Zealand right now I find it really hard to watch the Nats fuck things up even more!
Interest free student loans are an incredible incentive to keep doctors and engineers in New Zealand and also studying.
They are also very useful at keeping New Zealand's debt realistic. Because you can write down that this paid education generation owes 15B or 100B but if they decide to never pay it back or piss off overseas them New Zealand loses out.


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