> government that offers discount loans - i.e. loans with poor prospects/low interests rates - so that there is a higher allocation of capital to education than would occur in a pure private lending market
This is not nearly the full extent of the problem, just look at the housing market. Through credit, banks have been able to completely erode the concept of ownership and turn it into just another form of renting (except for those rare few with fuck-you money that we all dream of being)
1. Every loan is subsidized by virtue of any bank being able to effectively conjure money out of thin air. Giving out a loans would normally affect the backing of the depositor's accounts, but they have absolutely no concern due to FDIC insurance. So the only checks on how much a bank will loan out are the reserve requirement, and how accurately their own accounting model reflects what could go wrong (eg a massive drop in housing prices making all of that on-paper "collateral" worth less).
2. Overly strong enforcement of collateral, through both modern tracking technologies and a government that facilitates efficient repossession of property as if the debtor does not actually own it.
3. AFAIK student loan debt is not even discharageable in bankruptcy. (It is amazingly automatically discharged at time of death, but presumably private creditors are paid by the government when this happens, yet another subsidy).
4. The ridiculous overemphasis on credit scores, and how people are indoctrinated to constantly worry about them, and believe they will fail at life if they do not suck up to the rating companies.
5. People have been led to believe that failing to pay back a (good-faith-taken) loan is immoral, and that debts are absolute. Bankruptcy has been made to seem like a game-over death-equivalent where you've fallen off the path of a respectable life.
The systematic overemphasis on credit over assets has made it so that most people have a high monthly burn rate. Of course they take on more debt on non-capital expenses like new cars and further the cycle - they're no longer in control of their life, so they might as well enjoy what they can. Which then makes it so they always have to be working a full time job (and squirreling away a tiny amount with the idea of maybe not having to work when they're old and achy).
But this is happening concurrently with massive ongoing efficiency gains, so many of these jobs actually no longer need to be done! Due to a wider advertising/logistics reach, there are fewer market winners, thus less competition so companies have more surplus resources to employ these unnecessary people, who just end up being a detriment to the functioning of the organization. So with the current trends, we've got a future where robots are producing everything, but all the humans are essentially doing busywork (while completely stressed out as they believe they're not) just for access to the basic necessities of life.
This is not nearly the full extent of the problem, just look at the housing market. Through credit, banks have been able to completely erode the concept of ownership and turn it into just another form of renting (except for those rare few with fuck-you money that we all dream of being)
1. Every loan is subsidized by virtue of any bank being able to effectively conjure money out of thin air. Giving out a loans would normally affect the backing of the depositor's accounts, but they have absolutely no concern due to FDIC insurance. So the only checks on how much a bank will loan out are the reserve requirement, and how accurately their own accounting model reflects what could go wrong (eg a massive drop in housing prices making all of that on-paper "collateral" worth less).
2. Overly strong enforcement of collateral, through both modern tracking technologies and a government that facilitates efficient repossession of property as if the debtor does not actually own it.
3. AFAIK student loan debt is not even discharageable in bankruptcy. (It is amazingly automatically discharged at time of death, but presumably private creditors are paid by the government when this happens, yet another subsidy).
4. The ridiculous overemphasis on credit scores, and how people are indoctrinated to constantly worry about them, and believe they will fail at life if they do not suck up to the rating companies.
5. People have been led to believe that failing to pay back a (good-faith-taken) loan is immoral, and that debts are absolute. Bankruptcy has been made to seem like a game-over death-equivalent where you've fallen off the path of a respectable life.
The systematic overemphasis on credit over assets has made it so that most people have a high monthly burn rate. Of course they take on more debt on non-capital expenses like new cars and further the cycle - they're no longer in control of their life, so they might as well enjoy what they can. Which then makes it so they always have to be working a full time job (and squirreling away a tiny amount with the idea of maybe not having to work when they're old and achy).
But this is happening concurrently with massive ongoing efficiency gains, so many of these jobs actually no longer need to be done! Due to a wider advertising/logistics reach, there are fewer market winners, thus less competition so companies have more surplus resources to employ these unnecessary people, who just end up being a detriment to the functioning of the organization. So with the current trends, we've got a future where robots are producing everything, but all the humans are essentially doing busywork (while completely stressed out as they believe they're not) just for access to the basic necessities of life.