This may be the biggest accounting fraud in history

[*bfine32*]

Is how the WSJ Editorial Broad described the Obama's administration' s decision to eliminate the role of private lenders in the federal student lending market.

https://www.goldismoney2.com/threads/obama-administration-commit-the-biggest-accounting-fraud-in-history-with-student-loans.298522/

I can see the rationale of the Board's Op-Ed (Sorta made the government a publicly funded Enron) 

Quote:When the Obama administration “got rid of the guarantee program with the private sector out of the process and made it a direct federal loan, they got rid of all underwriting,” Holtz-Eakin noted.

“And so they recreated the worst aspects of the subprime mortgage lending crisis,” he stated. “They gave anyone who walked up a loan, without any notion of their capacity to repay.”

But I think intent would be required before anyone should be charged with a crime. This may have simply been a case of incompetence.

[Benton]

Isn't that the nature of a student loan though?

You're investing in that student. That's the collateral. With most loans you're loaning against something tangible, but with student loans, you're just loaning them money to buy a chance at a job.

Not to say Obama did or didn't do anything wrong, just that I don't see how you can look at student loans with the same light as a home loan or business loan.

[CJD]

Comparing it to the housing market crash, I guess the equivalent will be, at some point, the bubble bursts and everyone's education is no longer worth the money they were loaned to purchase it.

Oh wait, that has already happened for the vast majority of degrees.

So I guess we're in the Student Loan Market Crash right now, as we speak XD.

[Belsnickel]

So, the FDSLP has existed since 1992 and was piloted under G.H.W. Bush. They have been around before Obama was in office. Following the HCERA another type of federal loan was stopped, and those were the guaranteed loans, or those with private sector underwriters. But from 1992 to 2010ish, both types existed. Direct loans have never been credit based (as they are actually intended to help a student who lacks any credit help build up their credit) other than the PLUS loans, which are credit based but are for parents and graduate students.

What we see, now, is that there is a growing volume of private lenders working directly with parents and students. I've seen the proportion of private loans to direct loans increasing over the years (though what this year looked like, I'm not sure, as I don't handle the accounting for loans directly any longer) and these numbers move based upon interest rates and what is needed. Also, there is a cap on the FDSLP monies a student can receive that is much lower than that of PLUS or private loans. A student could not pay for their entire semester on those loans alone, and that's here at the least expensive four-year in Virginia.

This isn't really much to talk about, to be quite honest. Administrations on both sides can be blamed for the problem of the FDSLP and while Obama was responsible for ending the privately underwritten federal student loans, there is still a private loan industry that is absolutely thriving right now and credit based loans are carrying the bulk of the load from what I can see.

[oncemoreuntothejimbreech]

1) Where's the fraud?

2) Giving people loans wasn't the worst part of the subprime mortgage lending crisis. The worst part was knowingly ripping off investors by selling derivatives they knew would fail based upon those loans. I'm not surprised a WSJ editorial would attempt to blow more smoke up our asses about that.

[*bfine32*]

(09-10-2019, 11:12 AM)oncemoreuntothejimbreech Wrote: 1) Where's the fraud?

2) Giving people loans wasn't the worst part of the subprime mortgage lending crisis. The worst part was knowingly ripping off investors by selling derivatives they knew would fail based upon those loans.  I'm not surprised a WSJ editorial would attempt to blow more smoke up our asses about that.

1) I'd say the suggested fraud lies here:

Quote:WSJ asserted. “The Congressional Budget Office at the time forecast that eliminating private lenders would save taxpayers $58 billion over 10 years. This estimate was pure fantasy, and now we’re seeing how much.”

2) It appears they think the worse part is having taxpayers assume the burden of private loan default. 


But as I said: I think we would have to establish intent to determine if someone committed a crime. Could have just been a bad move. 

[Belsnickel]

(09-10-2019, 04:28 PM)bfine32 Wrote: I'd say the suggested fraud lies here:

So, a fraud was perpetrated by a federal agency the Obama administration had no authority of, but the largest fraud was committed by the administration's decision based on said agency's estimates? That seems a little off.

[*bfine32*]

(09-10-2019, 04:36 PM)Belsnickel Wrote: So, a fraud was perpetrated by a federal agency the Obama administration had no authority of, but the largest fraud was committed by the administration's decision based on said agency's estimates? That seems a little off.

You'd have to take that up with the board at WSJ as I haven't done an in depth analysis of the economic decision. I simply pointed to where I thought WSJ was finding fraud. Perhaps there was some sort of "collusion" between POTUS and the Democratically controlled Congress. It seem they think the administration misrepresented the "benefit" of de-privatizing to loan system and perhaps did it with the motivation of funding their wall healthcare plan. 

The crazy thing is: It seems the Liberal would be more upset about this than the Conservative; as it could be a case of American citizens bailing out the rich, but they were "Too Big to Fail".

[Belsnickel]

(09-10-2019, 04:44 PM)bfine32 Wrote: You'd have to take that up with the board at WSJ as I haven't done an in depth analysis of the economic decision. I simply pointed to where I thought WSJ was finding fraud. Perhaps there was some sort of "collusion" between POTUS and the Democratically controlled Congress. It seem they think the administration misrepresented the "benefit" of de-privatizing to loan system and perhaps did it with the motivation of funding their wall healthcare plan. 

Well, the CBO is a nonpartisan agency that is there to provide fiscal estimates to Congress. The post you link to indicates that the reason for the faulty estimate was due to a bill signed in 1990 that prevents the CBO from accurately assessing these sorts of financial issues. It's almost as if the WSJ editorial board is full of shit and chose to ignore this in order to cast aspersions at the last Democratic administration as the election season heats up. But that's just one possible option.

(09-10-2019, 04:44 PM)bfine32 Wrote: The crazy thing is: It seems the Liberal would be more upset about this than the Conservative; as it could be a case of American citizens bailing out the rich, but they were "Too Big to Fail".

Or I'm not expressing my opinion on the move by Congress and the Obama administration and rather just trying to make sure we aren't disguising highly partisan false information within seemingly reasonable conversation.

[oncemoreuntothejimbreech]

(09-10-2019, 04:28 PM)bfine32 Wrote: 1) I'd say the suggested fraud lies here:

2) It appears they think the worse part is having taxpayers assume the burden of private loan default. 


But as I said: I think we would have to establish intent to determine if someone committed a crime. Could have just been a bad move. 

Oh, so the nonpartisan CBO committed fraud by using the rules the are required to use?

Tax payers assuming what private loan default? I assume you mean student loan default since this is an editorial about student loans.

[oncemoreuntothejimbreech]

(09-10-2019, 04:44 PM)bfine32 Wrote: You'd have to take that up with the board at WSJ as I haven't done an in depth analysis of the economic decision. I simply pointed to where I thought WSJ was finding fraud. Perhaps there was some sort of "collusion" between POTUS and the Democratically controlled Congress. It seem they think the administration misrepresented the "benefit" of de-privatizing to loan system and perhaps did it with the motivation of funding their wall healthcare plan. 

Obamacare was passed by the 111th Congress in 2010. According to the WSJ, Congress created these student loan plans in 2012 which would be during the 112th Congress in which the Dems controlled the Senate and the Repubs controlled the House. So much for "Democratically" controlled. I'm not buying the Repubs voted to fund Obamacare (which was already passed) two years later with student loans.

Quote:The crazy thing is: It seems the Liberal would be more upset about this than the Conservative; as it could be a case of American citizens bailing out the rich, but they were "Too Big to Fail".

Bailing out the rich? Are you suggesting bailing out students who default on their loans?

[*bfine32*]

(09-10-2019, 06:25 PM)oncemoreuntothejimbreech Wrote: 1. Obamacare was passed by the 111th Congress in 2010. According to the WSJ, Congress created these student loan plans in 2012 which would be during the 112th Congress in which the Dems controlled the Senate and the Repubs controlled the House. So much for "Democratically" controlled. I'm not buying the Repubs voted to fund Obamacare (which was already passed) two years later with student loans.


2. Bailing out the rich?  Are you suggesting bailing out students who default on their loans?

1. Well somebody voted to fund Obamacare. As I told both you and Matt I simply linked a article that I thought was of interest. As far as I know Obama is not eligible to run for POTUS and as I've said we would have to find intent. If you and Matt want to dispute the WSJ Board's that's definitely your prerogative and I welcome the insight. I realize Matt has a background in student loans and you are familiar with insurance payments. 

2. Nah bailing out the private financial institutions that funded the Student Loans. The student is defaulting regardless. 

[oncemoreuntothejimbreech]

(09-10-2019, 06:39 PM)bfine32 Wrote: 1. Well somebody voted to fund Obamacare. As I told both you and Matt I simply linked a article that I thought was of interest. As far as I know Obama is not eligible to run for POTUS and as I've said we would have to find intent. If you and Matt want to dispute the WSJ Board's that's definitely your prerogative and I welcome the insight. I realize Matt has a background in student loans and you are familiar with insurance payments. 

Yes, someone did vote for Obamacare two years before this unrelated student loan program was approved by a Republican House of Representatives and a Democratic Senate. And you're suggesting it was passed by the Republicans to retroactively fund Obamacare while they were simultaneously trying to defund and abolish Obamacare?

Quote:2. Nah bailing out the private financial institutions that funded the Student Loans. The student is defaulting regardless. 

The private financial institutions that funded the student loans aren't getting bailed out by tax payers because the private institutions got cut out from financing the students. That's supposed to be part of the biggest accounting fraud ever, remember?

Students who default on loans can't have their debt forgiven by declaring bankruptcy, unlike Trump's failed businesses.

[*bfine32*]

(09-10-2019, 11:24 PM)oncemoreuntothejimbreech Wrote: 1. Yes, someone did vote for Obamacare two years before this unrelated student loan program was approved by a Republican House of Representatives and a Democratic Senate.  And you're suggesting it was passed by the Republicans to retroactively fund Obamacare while they were simultaneously trying to defund and abolish Obamacare?


2. The private financial institutions that funded the student loans aren't getting bailed out by tax payers because the private institutions got cut out from financing the students. That's supposed to be part of the biggest accounting fraud ever, remember?

3. Students who default on loans can't have their debt forgiven by declaring bankruptcy, unlike Trump's failed businesses.

1. The article draws the correlation to the de-privatization and the funding of Obamacare; I did not. As it states:

Quote:In 2010, Democrats “nationalized the market to help pay for Obama Care,” WSJ asserted.

2. Of course they got bailed out. They got relief from a rash of defaulted loans. American citizen assumed the debt. I do remember the article is just a couple days old.

3. Have 0 idea what Trump has to do with it, but a thread is not a thread without the 7 degrees of Donald Trump

You can address the points brought forth by the WSJ board or you can address my attempt to answer questions posed. I've always made the mistake of answering questions posed. 

[oncemoreuntothejimbreech]

(09-11-2019, 12:03 AM)bfine32 Wrote: 1. The article draws the correlation to the de-privatization and the funding of Obamacare; I did not. As it states:

As I stated from the beginning, that's just smoke being blown up our asses by a Robert Murdoch owned news outlet or the WSJ's edition of Fox News. You know that, right?

One, the Republican controlled House would have never approved the loan program if it actually did fund Obamacare.

Two, the WSJ could also make the claim this was to fund defense spending or the national debt, but didn't. I wonder why? Because they're owned by Robert Murdoch.

Quote:2. Of course they got bailed out. They got relief from a rash of defaulted loans. American citizen assumed the debt. I do remember the article is just a couple days old.

LOL

If the government paid the private lenders for loans already in default that would be a bailout. That isn't what happened.

Quote:3. Have 0 idea what Trump has to do with it, but a thread is not a thread without the 7 degrees of Donald Trump

I have zero idea what this has to do with Obamacare other than an unfounded claim by the WSJ.

Trump sought and obtained relief from his debt by declaring bankruptcy. Students can't do that to get relief from student loans and even if they are behind in their payments (meaning they are in default) they still owe the government money and the government can garnish their wages and tax returns. And that debt will follow them until they pay or die. Unlike Trump's debt from failed businesses.

Quote:You can address the points brought forth by the WSJ board or you can address my attempt to answer questions posed.

Um, in otherwords I can keep doing what I've been doing. Gee, thanks.

Quote: I've always made the mistake of answering questions posed. 

More smoke.

Yeah, until you go into your town crier act, "Hear ye, hear ye, hear ye! By official decree of His, with a capital H, imperial potentate and soon to be a major motion picture, bfine has declared, "I'm done with this!" Because the altitude of the high horse He, with a capital H, rode out of here on prevents the sound of mere peons like you wretched refuse from reaching his ears or for Him, with a capital H, from stooping to your level."

You always need to announce you're taking the high road to give the false impression you're taking the high road. The need for the announcement is how I know of the insincerity. Because if you actually took the high road without the preemptive announcement then people wouldn't know you're taking the high road. Thus the need for the announcement and why it is only the appearance of taking the high road instead of actually taking the high road. Shit's more fake than Saturday morning rasslin'. Or windmill cancer.

[BakertheBeast]

It seems the few Trumplicans left here are getting more and more desperate to find something, anything even remotely improper to spin it in a negative way to try to pin on Obama. While Trumps administration has a scandal every other day and are constantly doing crooked stuff and lying, Trumplicans try their best to play "whataboutism" but it fails every time. Its getting embarrassing.

[*bfine32*]

(09-11-2019, 05:05 AM)oncemoreuntothejimbreech Wrote: As I stated from the beginning, that's just smoke being blown up our asses by a Robert Murdoch owned news outlet or the WSJ's edition of Fox News. You know that, right?

One, the Republican controlled House would have never approved the loan program if it actually did fund Obamacare.

Two, the WSJ could also make the claim this was to fund defense spending or the national debt, but didn't. I wonder why? Because they're owned by Robert Murdoch.


LOL

If the government paid the private lenders for loans already in default that would be a bailout. That isn't what happened.


I have zero idea what this has to do with Obamacare other than an unfounded claim by the WSJ.

Trump sought and obtained relief from his debt by declaring bankruptcy. Students can't do that to get relief from student loans and even if they are behind in their payments (meaning they are in default) they still owe the government money and the government can garnish their wages and tax returns. And that debt will follow them until they pay or die. Unlike Trump's debt from failed businesses.


Um, in otherwords I can keep doing what I've been doing. Gee, thanks.


More smoke.

Yeah, until you go into your town crier act, "Hear ye, hear ye, hear ye! By official decree of His, with a capital H, imperial potentate and soon to be a major motion picture, bfine has declared, "I'm done with this!" Because the altitude of the high horse He, with a capital H, rode out of here on prevents the sound of mere peons like you wretched refuse from reaching his ears or for Him, with a capital H, from stooping to your level."

You always need to announce you're taking the high road to give the false impression you're taking the high road. The need for the announcement is how I know of the insincerity. Because if you actually took the high road without the preemptive announcement then people wouldn't know you're taking the high road. Thus the need for the announcement and why it is only the appearance of taking the high road instead of actually taking the high road. Shit's more fake than Saturday morning rasslin'. Or windmill cancer.

The article stated the debt program was nationalized in 2010. Now you may suggest that's a lie, but if it is true I'm pretty sure the Dems controlled both houses of Congress.

Sure they are. They have saved them from incurring the costs of a record number of defaulted loans. They American People must now pay that cost. The difference is: The private leaner got to select to whom they lent money; unfortunately, the American public does not

Of course you can continue to do what you do.

If pointing to the content of the article is "Taking the High Horse" then guilty as charged.

[oncemoreuntothejimbreech]

(09-11-2019, 10:24 AM)bfine32 Wrote: The article stated the debt program was nationalized in 2010. Now you may suggest that's a lie, but if it is true I'm pretty sure the Dems controlled both houses of Congress.

Sure they are. They have saved them from incurring the costs of a record number of defaulted loans. They American People must now pay that cost. The difference is: The private leaner got to select to whom they lent money; unfortunately, the American public does not

Of course you can continue to do what you do.

If pointing to the content of the article is "Taking the High Horse" then guilty as charged.

Okay, let's point to the content of the WSJ article . . .

https://www.wsj.com/articles/the-great-student-loan-scam-11566343674

Quote:Congress created these nifty plans in 2012

So they nationalized the market in 2010 two years before these nifty plans were created?  And they got the Republican controlled House of Representatives to approve a college loan plan that would retroactively fund Obamacare as these same Republicans were trying to get rid of Obamacare?  That's complete BS.

Nationalized what markets?  And how does that specifically pay for Obamacare instead of anything else our taxes pay for?  Don't bother answering because I know you don't know because the WSJ just stated it was fact without any supporting evidence to explain that opinion.  

The American people aren't paying the cost of these loans because they are student loans.  Not consumer debt which can be discharged during bankruptcy.  It's almost impossible to get rid of student loan debt.  Less than 1% of bankruptcy filings include student loan debt because it is so difficult to have discharged most people don't even try.  Which leaves the student loan borrowers with some options: 1) pay voluntarily, 2) pay involuntarily via wage garnishment or withholding of tax returns, 3) die.  But, you're not paying off their debt.

Lastly, you see that bold part?  So you're point being the government bailed out the private lenders from making loans.  Loans that they wouldn't have made in the first place.  To summarize: you want me to believe the government bailed out lenders by preventing them from making loans they wouldn't have made.  That's F'n brilliant.  Except for the fact you've already mentioned these private lenders knowingly agreed to mortgages they knew would fail and Wall Street sold derivatives based on these bad loans IOT profit in the short term.  Leaving the taxpayers to bail them out. It was the single greatest redistribution of wealth from the poor and middle class to the wealthy ever in the history of the world. That was the greatest accounting scam ever. Bar none.

Let's take this one step further and connect some dots the editorial board of the WSJ never will.  What's the conservative mantra anytime anyone mentions increasing wages . . . ever?  "Oh, we can't increase wages because businesses will just pass the cost along to the consumer and then we'll have the $2 menu instead of the $1 menu at McDonald's. AND I'M NOT PAYING $2 FOR F'N McNUGGETS SO SOME LOSER CAN LIVE ABOVE THE POVERTY LINE!"  Right?  When consumer debt to private lenders is discharged in bankruptcy they lose money.  What do you think happens there?  Private lenders pass those losses on to the consumer, you.  Damn, those lenders are making you pay for other's bad debt and bad decisions.  That sounds like some sort of accounting fraud; shifting their debt onto you. But, the WSJ editorial board isn't going to mention a capitalist screwing you.  Why?  Because they don't want you to realize they're screwing you.

If the WSJ wants to change my mind, show me some evidence.  Not unsubstantiated claims.

[Dill]

(09-11-2019, 12:16 PM)oncemoreuntothejimbreech Wrote: Lastly, you see that bold part?  So you're point being the government bailed out the private lenders from making loans.  Loans that they wouldn't have made in the first place.  To summarize: you want me to believe the government bailed out lenders by preventing them from making loans they wouldn't have made.  That's F'n brilliant.  Except for the fact you've already mentioned these private lenders knowingly agreed to mortgages they knew would fail and Wall Street sold derivatives based on these bad loans IOT profit in the short term.  Leaving the taxpayers to bail them out. It was the single greatest redistribution of wealth from the poor and middle class to the wealthy ever in the history of the world. That was the greatest accounting scam ever. Bar none.

This.  

[Dill]

(09-11-2019, 06:20 AM)BakertheBeast Wrote: It seems the few Trumplicans left here are getting more and more desperate to find something, anything even remotely improper to spin it in a negative way to try to pin on Obama. While Trumps administration has a scandal every other day and are constantly doing crooked stuff and lying, Trumplicans try their best to play "whataboutism" but it fails every time. Its getting embarrassing.

Fails for us.



DOESN'T fail for the 38% who support him no matter what, or for the Trump defenders-but-not-supporters.