Friday, February 03, 2006

EFW: Especially For Woo

As per Woo's request. Everyone who has student loans, write and thank your Congressional representatives who finally got around to passing the reconciliation bill from last year's Deficit Reduction Act! The legislation cuts among other things, 12.7 Billion from the federal student loan program. If you owe $15,000, you'll owe another $1,360 over the course 10 years... If you owe upwards of a hundred thousand like many graduate students, it's gonna' be a whole lot more than that. One would expect that a Congress intent on stimulating the economy would consider education a good investment. Apparently not though. Instead they pass the buck and essentially "raise" taxes on middle and lower class families through these cuts. Unfortunately student loans aren't the problem. This is equivalent to putting a band aid on a leg with gangrene. Add to this the fact that the Bush administration is pushing to make several tax cuts permanent and you negate any "deficit reduction" supposedly achieved by this bill and keep the federal deficit nice and ballooned (estimated by the OMB to be over $400 billion in 2016).

21 comments:

woo said...

THANK YOU! But I disagree with everything you said.

Marc said...

Of course you did, because I said it!

BA said...

Oh man, all the poor professionals are going to have to pay a few hundred bucks more!

Tara said...

All I know is I have been getting excellent tax returns since 2000, and we're as poor as it gets. Thanks Dubya!!

Marc said...

How old are you Tara? How much do you earn? I really don't think "Dubya's" tax returns are helping you much. Even so, I don't see what that has to do with cutting student loan subsidies.

A few hundred bucks? These will end up costing you a lot more than that Brian. And you and I aren't the worst off. This will cost several students in my ward more than $20,000 over the life of their loans. All in the name of "deficit reduction." It's a smoke screen for fiscal responsibility when the real problem is things like appropriation bill "pork" riders, making permanent the tax cuts, and medicare.

BA said...

You're right, the Republicans were probably like:
Rep 1, "how can we screw over the students and poor people a little more?"

Rep 2, "well we could stop funding things like financial aid and medicare?"

Rep 3, "but that has not rational relationship to getting federal spending under control"

Rep 1, "Rep 3, you are a traitor to the party, we're not here to worry about that. We just need to make ourlselves rich enough to be able to pay to get our kids off the hook when they get caught with crack. We also need enough money to send our slut daughters out of the country for legal abortions in Canada once we get Scalito to overturn Roe v. Wade. Do you think we can get that rich without screwing over students and poor people? Hell no."

Rep 3, "I see the error of my ways, what can I do to help in the fight against minorities?"

No hyperbole was intended in this post.

tigerfoxbear said...

Hey, all i know is I'm paying over the past few years about 7% income tax. Not to bad if I do say so myself.

Tara said...

Marc, a lady never reveals her age! Plus I was responding to your rant about Bush making the tax cuts permanent. I for one LOVE the tax cuts. FANTASTIC if you ask me. Crazy liberal. J/K

Marc said...

Tara - I'm assuming that you're not wealthy and that you're young. So what you say about your tax returns being better since 2000 have nothing to do with Bush's tax cuts... you almost certainly didn't make enough before or since to have it really affect you.

Brian - Since I've discussed student loan cuts with you and know that we're not in disagreement on this one, I'm not going to take the bait.

Sean - Great.

woo said...

More tax cuts, less spending! Woohoo! Oh, and more money for guns please. I guess the astute citizen would quit school, get a high paying arms building job, and start an hsa.

Marc, how exactly will student loans be affected? The interest is deductible anyway, so isn't an increase offset by that?

Marc said...

Woo... unless it is a tax CREDIT, being merely deductible doesn't negate the higher interest rate you are asked to pay. As I'm sure you are aware, it is simply deducted from your total gross earnings. It eases the blow a little, but you're still paying most of it.

Marc said...

By the way... Blogger.com has been having a few problems of late and it was brought to my attention that several posts made on this string yesterday failed to register. If anyone made a post that failed to register, I apologize and invite you to re-post it.

Tara said...

Marc-
From the way you talk "down" to me you must truly be elite. Thanks for opening my eyes to what the superbly intelligent are thinking these days. I've been out of high school for nearly 9 years so I'm pretty sure I've made enough for the cuts to affect me. Thanks for your concern though. Just like I said earlier CRAZY LIBERAL!!

Marc said...

Tara... I hate to point out your hypocrisy... but calling me a "Crazy Liberal" sure seems to constitute "talking down" to me as well. You know absolutely nothing about my politics other than that I oppose cutting the federal Stafford loan subsidies. This is NOT a liberal/conservative issue. In fact, had the student loans cuts not been attached to the larger bill, they almost certainly would not have passed on their own. The only politics that are clearly on display here are your apparent unwavering devotion to "Dubya" and his tax policies.

Note: Being out of High School for 9 years would have made you 20-21 when Bush came into office. This is EXACTLY what I'm referring to. I'm very doubtful that his tax cuts really affected your tax returns at all.

BA said...

I'm going to have to side with Marc on this one. Bush's tax cuts have only helped people with a lot of capital gains and corporations, I don't know how you could fit into either of those groups, but if you have congrats on becoming so wealthy.

Tara said...

Marc I was joking when I called you a crazy liberal. I'm sorry to have hurt your feelings! :) I can honestly tell you that I don't know anything about the student loan stuff you are talking about. And I do not have an insane devotion to "dubya", all I am saying is that I appreciate the tax cuts - I like his theory. I think it works. Everyone complains that tax cuts are for the rich, and even if they are (which they are not)- the rich create jobs. They invest their money. What do poor people do? They spend it. Both help out our economy, which helps explain why the economy is doing so well. That's just my opinion.

Tara said...

Now I'm getting out of here before you really start to hate me!!

Marc said...

Trickle down economics sure sounds nice... but unfortunately it doesn't always translate so neatly in the real world. There is a lot of evidence to suggest that the economy doesn't respond as consistently as proponents of this theory purport.

The economy really isn't doing that well. In fact, most economists think it is underperforming and its recovery may be in danger. The deficit has ballooned to record levels and shows no signs of disapating, as a result there are a lot of consternation about inflation. Moreover, the job creation of the last two years has produced jobs that pay markedly less than those lost in the first two years of Bush's presidency.

Before you jump on my "politics"... This assessment isn't a "liberal" one... it's shared by a slew of economic conservatives. If you're interested, here's a really interesting article in a recent issue of the economist.

woo said...

Now THAT is the dialog I missed. So, I am not so sure that the student loan cuts are really all that bad... in the short run, yes, the interest rate is fixed at a higher apr than before. However, it is fixed, whereas the previous rate could have reached 2 percent higher, if the Fed continues to raise the baseline. The other way that they were cut were by reducing the subsidies that went to the LENDERS. While these may have encouraged people to lend money to stinky students, most likely folks won't stop lending to law students, cause they know that in 3 years (or now, if your name is Marc) you will be paying that back with interest.

Now, ideally, the money saved could have gone to allow more people to get subsidized loans, but the bill was aimed at reducing the deficit.

So, in the end, I think more money for me, less for lawyers, and less war would be the only way to please everyone.

XOXO

Marc said...

That's what my band-aid on a leg with gangrene comment comes in Woo... it's "deficit reduction" in name only. First of all, student loan subsidies aren't why we have a deficit problem. Secondly, if your tax cuts are more than your discretionary spending cuts (as Bush has proposed) then you AREN'T reducing the deficit.

But it's highly unlikely at this point that the tax cuts are going to be extended because the deficit projections are so large. There are a lot of conservative Republicans that think it is fiscally irresponsible at this point to make the Dividends tax cut permanent.

woo said...

I agree with you marc, it is not the right thing to do to reduce the deficit. There, I said it.