Why the Government is Bankrupt
I couldn't resist clicking through to this article supposedly laying out a "trend" that increasing numbers of women were finding "sugar daddies" to pay for college. I was considering an article calling BS on the whole trend when my attention was diverted. I found the best single-statement illustration of the attitude that is bankrupting this nation. First, the basic story:
Nearly 300 NYU co-eds joined the site’s service last year seeking a “mutually beneficial” arrangement with rich older men — a 154 percent jump over 2011.
It was the second-highest number of new members for any college in the country.
Hundreds more young women from Columbia, Cornell and Syracuse universities also have recently signed up for the service, the site said.
“I’ll admit that I’ve thought about doing something like that,” said a Columbia junior who gave only her first name, Karen.“It would be easier in some ways than working, taking classes and then spending years paying back loans.”
The writer is obviously trying to get me to be outraged, but all I can do is shrug. There are a lot of worse things in the world to worry about than people entering into "mutually beneficial relationships." But this is the line that stopped me short:
“Clearly, we need more financial aid if those are the lengths people are going to pay for school,” sniffed Ashley Thaxton, 20, an NYU theater major.
God, is there ever going to be a non-problem that doesn't require more government spending. How about lowering tuition? Cutting back on bloated administrative staffs? Eliminating useless academic departments? Channeling less money to the football team? Or how about we just accept that some people make personal choices that might be distasteful to us, but are really their own god damned business.
Mark:
How about abolish "theatre majors"?
January 17, 2013, 12:25 ammarque2:
Stop bagging on the athletic departments. The Athletic departments tend to be at least somewhat self funding. The football and basketball programs actually have enough surplus to support the varsity women's badmitten team and other useless sports the school foists upon the department.
January 17, 2013, 8:09 amMaybe some of these other colleges could figure a way to become self funding. The Computer Science department could have students design apps for the department, the Sociology department could have the students do social things.
marque2:
What should be done is abolish federally funded student loans. They don't distinguish between degrees that are capable of providing enough cash to pay back the loan, or not. In fact, if you get a low paying job, they always had programs to forgive part of the loan after 20 years. Creating an incentive to sign up for weak majors. If banks had to approve the loan and students knew really had to pay them back, many of these departments would die on their own. Of course the University would try to make Theater a manditory general ed class then.
January 17, 2013, 8:13 ammarque2:
The student loans are also causing the college admin bloat, I think there are now an average of 3 admins per teaching professor. Schools just raise the prices, students and parents whine, and then the federal government comes in and saves everyone with higher student loan amounts, which cause the cycle to start again. Universities will always raise their prices just to the point of pain. The student loan programs hide that pain.
January 17, 2013, 8:15 amCTD:
Indeed. Most (I'm not willing to say all) athletic departments are self-supporting . The money they get from the operating budget of most schools tends to be fairly trivial in the grand scheme.
January 17, 2013, 9:00 amSean Wise:
There was a story over at CNBC about web-cam girls. The last line of the article by a guy who hires these girls is enlightening, "Just because they were in porn doesn't mean they're going to make it in chat," said Love. "I don't want porn models. I don't want strippers. I want the college girl who's trying to make her tuition payment. She's going to show up." I think the students have caught on to the fact that even if the government throws more money at education, it will mean raises and increased staffing for the folks at the college and they will still be on the hook for the same amount of money and perhaps even more. Do the universities have any misgivings at all about how bloated costs force students into desparate situations? Can we campare this to symbiotic relationship between pimps and drug adicted hookers trying to make a living?
January 17, 2013, 11:32 amMNHawk:
Who's she going to have to service after college to make ends meet, being burdened with a Theater major?
January 17, 2013, 11:45 ammarque2:
Actually, considering how many folks "break into" the industry with their first few jobs, this technique is good practice for future career advancement.
January 17, 2013, 11:51 amRuss R.:
When I got my MBA acceptance package a decade ago, it included a brochure from a national bank informing me that I was pre-approved for a line of credit up to $108k with no co-signor. (It probably helped that the bank's president was an alumnus of the same business school).
I later found out the bank offers similar loan packages (though not pre-approved) to admitted graduate students at any university studying to be doctors and dentists ($200k, no co-signor); optometrists, pharmacists, veterinarians, and lawyers ($80k); and chiropractors ($62k).
Grad students in any other program (e.g. theater) could borrow a maximum of $16k.
January 17, 2013, 2:15 pmLarryGross:
re: "mutually beneficial relationships". I swear, when I read your stuff sometimes, I think you are totally blind to our history - namely that before married women were common in the workplace - they were totally dependent on the male breadwinner.
we've come such a long way that NOW, some folks think it's a NEW TREND!
one of the most important justifications for Social Security when it was created was a way to provided for windowed women who had no job experience and were left pretty much destitute when their husband died.
geeze! ;-)
January 18, 2013, 7:10 amobloodyhell:
}}} Channeling less money to the football team?
Yes, particularly the football teams. If there is any department/sub-organization of a school that pays its own way, chances are, it's the football team. They usually pay for all the other sports programs, too.
January 18, 2013, 7:25 amobloodyhell:
Larry, was there an actual point in there?
Jus' wonderin'
January 18, 2013, 7:27 amNL7:
I'm interested in the taxation of the arrangement itself.
First, it seems hard to enforce, given that there's essentially no enforcement once the loans are paid off. Even if escorting and straight prostitution were fully legalized, it's virtually impossible to force performance of personal employment services in any field (in part because of the Thirteenth Amendment prohibition on involuntary servitude). So the best you can do is string out payments over a longer period, reserving pending performance of services (I'm assuming here the exchange is legal).
What's especially interesting from a tax perspective is that this is a tax advantaged way to pay a mistress or escort. The gift tax normally taxes the giver of annual gifts that exceed a $13k floor to any given person. But the gift tax has an exception for payments paid directly to providers of education or health care (but this must not include room & board). Which means there is no gift tax here. But the direct-to-provider requirement (absolute prohibition on reimbursing the beneficiary directly) sets the timing and duration of the gift. So the gifts only continue as long as the education institution has tuition to be paid, meaning the payments will lose their tax advantage once the student matriculates and there is no tuition to pay. Which might put a time limit on the relationship, or at least on its gift tax exemption. Of course, if the sugar daddy keeps his total gifts (loan reimbursements, flowers, hotel rooms, jewelry) below $13k per year, then there would be no gift tax consequences.
Of course, if we just assume this is straight up prostitution, then this is a business arrangement. Giving gifts and receiving romance or sex is not itself prostitution; but if the relationship were lawful prostitution and formalized by a contract, with payment schedules and breach definitions, then we'd have bona fide income for the students to report. The girls would be obligated to report the small business income (though they'd be able to make reasonable business deductions, this probably wouldn't cover lingerie and sex aids unless they were used exclusively for the business).
So it's actually a tax advantage that a prostitution arrangement would be illegal. It strengthens the argument that this is romance and gifts, not cash for services. Meaning the sugar daddy gets the $13k floor and the education exception from the gift tax. If prostitution were legal, then this relationship might look more like a disguised business, with the girls being independent contractors for the men.
If it were legalized, then watch for spurned lovers (or ex-students with still-enormous outstanding loan balances) to sue for recharacterization as employees - and asking for penalties for undelivered overtime, meal breaks, and warning posters.
January 18, 2013, 2:40 pmmesaeconoguy:
Idiot, that’s bullshit justification for setting up a public Ponzi scheme.
Scottish Widows has been providing that service since 1815.
And it’s not bankrupt, whereas Socialist Insecurity is.
January 18, 2013, 5:24 pmLarryGross:
social security is bankrupt? got a credible site that says that? remember, the operative word here is credible and if you think the govt is lying then we're done.
January 18, 2013, 5:48 pmmesaeconoguy:
Idiot, the net present value of Socialist Insecurity’s future obligations exceeds its inflows. It is bankrupt/insolvent.
And the only way to fund current entitlements at their current levels is to raise taxes to devastating levels, destroying growth, and likely the entire economy.
It’s over. You won the battle, but you’re about to lose the entire country/war.
Shoving your head in the sand/up your ass hasn’t improved your debilitating cognitive deficiencies.
January 18, 2013, 6:59 pmmesaeconoguy:
And of course the government is lying.
Well, not lying, but using piss poor projections based on fake information and assumption inputs.
CBO lies all the time, though mostly because they are given crap input assumptions (see Obamascare). They also fabricate their own whoppers:
“But no one can top the predictive powers of the CBO. They just put out their ten year
updated forecast reflecting the fabulous fiscal cliff deal that saved the country. According to the CBO, the “compromise” to reduce our deficits will add a mere $4 trillion to the national debt over the next ten years. I’m sure this will prove to be accurate. Just take a look at their 2002 projection, after
passage of the Bush tax cuts:
The CBO predicted the FY2012 surplus would be $641 billion, the national debt would total $3.5 trillion, the debt held by the public would total $1.273 trillion, and GDP would total $17.2 trillion. They missed by that much.
The actual FY12 results were:
The true deficit was $1.37 trillion (amount national debt increased – not the
phony deficit number reported by the mainstream media).
The national debt was $16.1 trillion.
The debt held by the public was $11.3 trillion.
GDP was $15.8 trillion."
http://www.zerohedge.com/news/2013-01-18/guest-post-fiscal-farce-failure-fantasy-fornication
The only people who believe this government horseshit are helpless lemmings like you who won’t understand when the feces hits the rotating blades in about 5 years (if not sooner).
But don’t worry, Larry. The bigger your ass gets, the further you can shove your head up it, for
January 18, 2013, 7:17 pmsafety.
LarryGross:
sorry, not into conspiracy theories ...especial global ones.. I'll leave that to you boys.
January 18, 2013, 7:22 pmLarryGross:
mesofool - do you realize that by law SS cannot pay out more than FICA brings in?
how can that be bankrupt ? I'm sure you've heard that if they don't do anything, that
they'll have to reduce benefits, right?
so how can that be bankrupt?
see if you spent your time looking for real information instead of going to whacko sites and sucking up lame propaganda, you might get smarter... but i do understand that's not allowed.
January 18, 2013, 7:24 pmLarryGross:
actual point is that woman seeking economic security from men is not new... it's old but coyote guy here seems to be a newborn when it comes to these things.
January 18, 2013, 7:25 pmmesaeconoguy:
LOL, global conspiracy.
Yeah, no problems at all in Greece, Italy, Spain, Ireland, Portugal, etc. Everything’s fine.
Keep the head/ass shoving Larry, keep shoving.
Retarded imbecile
January 18, 2013, 7:26 pmLarryGross:
problems around the world means there is a global conspiracy about? who knew?
January 18, 2013, 7:27 pmLarryGross:
your infantile language does not impress either little boy.
January 18, 2013, 7:28 pmmesaeconoguy:
Moron, it is bankrupt. You cannot continually raising the retirement age, and/or trimming
benefits. That is politically impossible.
Simply raising the retirement age has massive problems of its own
http://www.zerohedge.com/contributed/2013-01-10/noteworthy
Socialist Security is toast.
Your ass must just be huge for you to jam your head that far in.
January 18, 2013, 7:33 pmLarryGross:
got any credible links baboon boy?
January 18, 2013, 7:40 pmmesaeconoguy:
Your ignorance is impressive to everyone, asshat.
January 18, 2013, 7:43 pmmesaeconoguy:
Got your head out of your ass yet, pillock?
January 18, 2013, 7:44 pmLarryGross:
here, let me give you a hand with a credible link baboon boy:
http://www.cbo.gov/publication/21547
January 18, 2013, 7:46 pmmesaeconoguy:
LMFAO CBO. Did you not just read what I posted?
Larry, you are in serious need of lots of whiskey, and a lobotomy.
It takes work to be as ignorant as you are. We salute you.
January 18, 2013, 7:48 pmLarryGross:
read what you post? sorry.. understanding 5 years old is tough for me.
January 18, 2013, 7:50 pmmesaeconoguy:
Understanding anything is extremely difficult for your
single-digit “intellect.”
Here are your 2 choices, insipid dolt:
Best case, Japan – massive deficits, huge debt/GDP ratio, zero economic growth for 20+ years
Worst case, Greece – violent social upheaval, massive economic displacement, deep, long depression
Social democracy and safety netting has failed. Game over.
January 18, 2013, 7:59 pmLarryGross:
have you considered other countries baboon boy? Try Singapore or Hong Kong or Australia ....
if you'd speak intelligently and not like an ornery 5-year old life would be better you know.
January 18, 2013, 8:03 pmmesaeconoguy:
Vapid turd, Ponzi schemes are illegal for a reason: they fail.
Socialist Insecurity is not only a Ponzi scheme, it is run by government (if it were private, the operators would be in jail, if they weren’t Obama contributors).
Even Paul Krugman understood this, once
http://www.bostonreview.net/BR21.6/krugmann.html
The sooner you remove your cranium from your rectum, the quicker we can get on to discussing actual solutions, like eliminating Socialist Insecurity. Yes, all of it.
January 18, 2013, 8:17 pmLarryGross:
Boston Review from 1996? are you kidding? who are they? and is that really who they claim it is and if you want a CREDIBLE link to something Krugman actually said about Social Security, try this one: http://archive.truthout.org/article/paul-krugman-confusions-about-social-security.
If you spent more time actually looking for the truth instead of things to confirm your biases - you might actually learn the facts instead of just parroting sound-bite propaganda over and over.
January 18, 2013, 8:28 pmMatt:
"how about we just accept that some people make personal choices that
might be distasteful to us, but are really their own god damned business."
Good point. And it applies to far more significant human interactions than pursuit of sugar daddies.
The entire "war on drugs" is nothing more than an excuse to get paid to
January 19, 2013, 7:41 aminflict pain on people who "make personal choices that might be
distasteful to us."
Matt:
Another data point:
http://reason.com/blog/2013/01/16/fillmmaker-gets-four-years-in-prison-for
January 19, 2013, 10:31 ammesaeconoguy:
Dumbass, the only websites you deem credible are the ones which agree with your warped and facile worldview.
Do us all a favor and go play in freeway traffic, ignorant simpleton pig.
January 20, 2013, 9:17 am