With the 61% majority stake in GM and $85 Billion takeover of AIG complete, the liberal government has set its sights on the private student loan market and health care.
Both initiatives will cost roughly one trillion dollars each and neither one will be passed by the Senate in a traditional vote where 60 senators consent.
Health Care and student loans are on track to be voted on in a fall budgetary maneuver known as reconciliation. This tactic only requires a simple majority and was intended to promote better fiscal discipline in the budget process. It is clearly having the reverse affect.
The $85 Billion-a-year student loan program had been a totally government-serviced operation until consumer outrage at the poor support and absolute lack of efficiency pushed them to the private market. So if the government did such a poor job, why is this even in consideration?
In 2007, a liberal congress legislated loan returns to a level so low that private companies could not make any money. They just stopped writing the loans which forced consumers back into the hands of the government. The government didn’t pause at all. The federal programs started buying up loan assets at an alarming rate in 2008.
In the President’s budget for 20101 a section named “TERMINATION: ENTITLEMENTS FOR FINANCIAL INTERMEDIARIES UNDER THE FEDERAL FAMILY EDUCATION LOAN PROGRAM, the first sentence says it all, “The Administration proposes to eliminate unnecessary subsidies to lenders that make loans to students.”. Obama is ending the privatized student loan industry by force. By terminating the subsidies, that were only necessary due to the government lowering rates to unsustainable levels, there will be nowhere else to go but the government when Americans need student loans. This strategy isn’t new, it’s the exact same one being used to sucker-punch citizens into a single-payer health care solution. You could call it – single lender student loans.
Following their game plan to the letter, the administration is using its usual tricks of claiming “savings” and then putting plans in-place to spend the savings before they’ve materialized – as if we would be able to accurately measure these savings anyway. Obama has planned to use the purported savings to increase Pell grant funding by almost $50 Billion. If loan defaults increase, and they will, taxpayers will be funding the increases in Pell grants.
Recognize the basic strategy that elitists are using to gather more-and-more power to themselves and therefor strip more from states and individuals. They predictably regulate an industry into the ground, start a government plan, create false “savings”, then run the private industry out-of-business by using anti-competitive practices. It’s not new, it’s not right, but it is their method of operation.
Health Care and student loans will mean a two trillion dollar take over of yet another private enterprise without the constitutionally mandated 60 votes, not to mention that a federal-run student loan program may be unconstitutional. For education and health care, we will have nowhere to go but Uncle Sam.
1- Budget of the U.S. Government Fiscal Year 2010 – Terminations, Reductions, and SavingsWake up Right! Subscribe to our Morning Briefing and get the news delivered to your inbox before breakfast!