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View Diary: Gillibrand offers bill to lower student loan interest for millions (54 comments)

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  •  It made $51 billion... (0+ / 0-)

    but how much did it loan out?  where did that money come from?

    Sadly under our current tax code, the money has to come from the tax payer or from promises to raise taxes later (bonds).  

    So to loan out $140 billion the Fed Gov has to come up with $140 billion.  Under current tax code, that means all tax payers (which we know are not the rich) have less money in their take home paychecks to come up with this money to loan out to college students.

    If the $51 billion was rolled over into the fund, then instead of having to come up with $140 billion this year, they only need to come up with $89 billion and they still can loan out $140 billion.  In theory this means the tax payer gets to keep more of their pay check.  Or they could add the money to the program, still come up with $140 billion plus the $51 billion and loan out $191 billion to more people.

    They could loan out $140 billion at 0%, and the taxpayers could just eat that cost. But in that case, you might as well just turn all student loans issued by the Fed Gov into Grants.  That would end the problem of student loan debt by turning the program into a grant program.  You don't have to pay back grants.

    Stupid question hour starts now and ends in five minutes.

    by DrillSgtK on Mon May 20, 2013 at 12:34:47 PM PDT

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    •  This is not true. (0+ / 0-)
      Sadly under our current tax code, the money has to come from the tax payer or from promises to raise taxes later (bonds).
      Gov't does not have to rely on tax payers to fund gov't spending.  Time to read up on how federal economy works.

      "In this world of sin and sorrow there is always something to be thankful for; as for me, I rejoice that I am not a Republican." - H. L. Mencken

      by SueDe on Mon May 20, 2013 at 03:16:19 PM PDT

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      •  If not taxes then how? (0+ / 0-)

        The government has to get money from someplace.  I see three sources: 1) taxes (on people directly like income/sales/fees/etc and indirectly through business taxes) 2) borrowing (saying "we will tax people later to pay you back") and 3) printing (inflation, making the value of the money less, a tax on money directly.)

        if the third method, the taxpayer will see the amount of stuff they can buy with their money get smaller, so everything will cost more and out side of a few people, their pay check won't keep up with the increase.  Just look at the median pay of a worker adjusted for inflation, we have lost ground because what we get paid is not being increased as fast as inflation has been growing.  

        Inflation goes up every month, most people get an annual cost of living adjustment after the fact.

        If the Fed Gov could print money to pay for everything, then they would not need to tax anyone.  They don't just run the printing press because that would destroy the value of the dollar.

        Stupid question hour starts now and ends in five minutes.

        by DrillSgtK on Mon May 20, 2013 at 05:00:02 PM PDT

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