Will you still go to law school if the US defaults? Forum

[Tiago Splitter]

The debt has not been caused by out of control entitlement spending or big bureaucratic liberal government. It's been almost primarily the fault of bad, horrible, horrible policy and fiscal recklessness by the Bush Administration and the Republican congress that enabled him. The small part of the deficit that remains after accounting for that is a result of decreced tax receipts due to the poor economy, which is mostly a result of an economically libertarian attitude toward financial regulation. "Big-government socialism" has virtually nothing to do with it.

+1

I find it humorous how people who rail against spending have no problem blowing tons and tons of dough on stuff they think is worthwhile... like spending more on our military than the rest of the world combined, tax cuts for those who really do not need them, etc. Yet when it comes time to trim the fat, we cut NASA funding, education, etc. Remember the surplus of Clinton.

The U.S. really is an empire, just like it predecessors, it'll fall and divide into separate nations and domains.

Really? When Clinton left office the Government spent just 18% of GDP.

To those who say entitlements aren't the problem, within 25 years entitlements alone will take up more than 15% of GDP.

To those who say Medicare Part D isn't an entitlement program, I can't help you.

[JCougar]

To those who say Medicare Part D isn't an entitlement program, I can't help you.

Medicare Part D is an entitlement program: Drug companies are entitled to abuse the government's credit card. The entire program was a political favor...not to US citizens, but to stockholders of drug companies.

[androstan]

The current tax structure facilitates a system where the rich pay less than their fair share of taxes, thus keeping the rich richer.

Fair share? Isn't there a statistic that shows the top 1% of earners in this country pay about 50% of all income tax revenue or something like that. Yea, I'd say they don't pay their fair share.

The 1% and 50% numbers you cite aren't comparable. You have to consider what fraction of the total income the top 1% actually make. If you think taxes paid should be proportionate to income then:

If the top 1% of the population make 50% of the money, you would consider it reasonable that they pay half the total tax revenue.

If the top 1% of the population make 10% of the money, you would consider it reasonable they pay 10% of the total tax revenue.

If the top 1% of the population make 99% of the money, you would expect them to pay 99% of the tax revenue.
....

I am consistently saddened by the lack of quantitative reasoning skills amongst even our "educated".

[MrPapagiorgio]

If you account for yet another unfunded Bush program, Medicare Part D, it virtually covers the rest of the deficit.

The debt has not been caused by out of control entitlement spending or big bureaucratic liberal government. It's been almost primarily the fault of bad, horrible, horrible policy and fiscal recklessness by the Bush Administration and the Republican congress that enabled him. The small part of the deficit that remains after accounting for that is a result of decreced tax receipts due to the poor economy, which is mostly a result of an economically libertarian attitude toward financial regulation. "Big-government socialism" has virtually nothing to do with it.

Fine, but how can you reconcile and justify the spending of the Obama Administration? You cannot blame Bush for spending us into debt and approve of Obama spending exponentially more.

The current tax structure facilitates a system where the rich pay less than their fair share of taxes, thus keeping the rich richer.

Fair share? Isn't there a statistic that shows the top 1% of earners in this country pay about 50% of all income tax revenue or something like that. Yea, I'd say they don't pay their fair share.

The 1% and 50% numbers you cite aren't comparable. You have to consider what fraction of the total income the top 1% actually make. If you think taxes paid should be proportionate to income then:

If the top 1% of the population make 50% of the money, you would consider it reasonable that they pay half the total tax revenue.

If the top 1% of the population make 10% of the money, you would consider it reasonable they pay 10% of the total tax revenue.

If the top 1% of the population make 99% of the money, you would expect them to pay 99% of the tax revenue.
....

I am consistently saddened by the lack of quantitative reasoning skills amongst even our "educated".

Yes, and many in this country pay no income taxes while draining the system dry. Sorry, I am one of those "reap what you sow" kind of people. I wasn't raised to live off handouts from others.

[WSJ_Law]

Can we move slightly back towards how a technical default will affect law students, newly minted J.D.s? Will student loan funding be wiped out altogether or just harder to get?

As much as I love arm-chair economists...

[MrPapagiorgio]

Can we move slightly back towards how a technical default will affect law students, newly minted J.D.s? Will student loan funding be wiped out altogether or just harder to get?

As much as I love arm-chair economists...

Clearly the "real" economists in this country have no fucking clue either, so don't worry, I'm totes not offended. On the topic of student loans, I do hope and pray that student loan funding will be either more difficult or completely wiped out to save these kids from themselves and maybe add some value to higher education again.

I attribute the devaluing of the 4-year degree to the overabundance of both shit schools and the funding sources willing to give vulnerable children money for an education they neither want or can use in the future. This goes double for law schools.

[scammedhard]

Can we move slightly back towards how a technical default will affect law students, newly minted J.D.s? Will student loan funding be wiped out altogether or just harder to get?

As much as I love arm-chair economists...

What is for sure is that gov loans will be hard to come by, and private loans will also run dry since banks will be in really bad position when their treasuries lose value. So, no new loans if the US defaults, and that means no students.

If someone has a loan out there, then he/she still needs to pay it back. But it gets complicated if the loan is fixed or variable. I think most outstanding loans out there are gov or gov-backed with a fixed rate. Now, because of the fixed rate, it becomes even more complex because inflation would play a big deal for the one's ability to pay back the loan. If inflation gets high, it's easier to pay the loan; if there is deflation, is much harder.

If the US defaults, will there be inflation or deflation? I think most economists would say deflation because it will cause a huge economic contraction, but the dollar would also lose value, and thus would counteract the deflationary pressure. And obviously the Fed would intervene if the US defaults and the economy goes down the drain. If Fed is very aggressive, then they could turn the deflation into inflation.

I think there are a lot of unknowns. A lot of countries have defaulted in the past, but their cases are of little value here because none of them were as big the US and their currencies were not used as reserve currencies. One thing is certain, if the US defaults, treasuries lose value, bank hold a lot of treasuries so they lose a lot of money, the financial system collapses, and we have easily a Second Depression.

Would I go law school if the US defaults? No, mostly because it would be nearly impossible to find a job after, even from the very top schools.

[crossarmant]

If the U.S. defaults, the end of days will approach. The streets will become rivers of blood and the lands will dry, crops will be devoured by a thousand plagues of locusts.... Then the four horseman of the Apocalypse will ride, bringing about Armageddon.

"There's no water left anyway. Drought's comin'. Like biblical flood but in reverse. Golf course'll be the first to go... Then the fountains -- all the water fountains.... Restaurants... Basic services... Large mammals... Then the regular size mammals... Reptiles... Birds... Then people..."


I'm not terribly worried. There's all this asinine political jockeying and economic woes that happen all the time. Most all of it rarely affects us little folk other than slightly more difficult job market or tighter budgets.

[androstan]

If you account for yet another unfunded Bush program, Medicare Part D, it virtually covers the rest of the deficit.

The debt has not been caused by out of control entitlement spending or big bureaucratic liberal government. It's been almost primarily the fault of bad, horrible, horrible policy and fiscal recklessness by the Bush Administration and the Republican congress that enabled him. The small part of the deficit that remains after accounting for that is a result of decreced tax receipts due to the poor economy, which is mostly a result of an economically libertarian attitude toward financial regulation. "Big-government socialism" has virtually nothing to do with it.

Fine, but how can you reconcile and justify the spending of the Obama Administration? You cannot blame Bush for spending us into debt and approve of Obama spending exponentially more.

The current tax structure facilitates a system where the rich pay less than their fair share of taxes, thus keeping the rich richer.

Fair share? Isn't there a statistic that shows the top 1% of earners in this country pay about 50% of all income tax revenue or something like that. Yea, I'd say they don't pay their fair share.

The 1% and 50% numbers you cite aren't comparable. You have to consider what fraction of the total income the top 1% actually make. If you think taxes paid should be proportionate to income then:

If the top 1% of the population make 50% of the money, you would consider it reasonable that they pay half the total tax revenue.

If the top 1% of the population make 10% of the money, you would consider it reasonable they pay 10% of the total tax revenue.

If the top 1% of the population make 99% of the money, you would expect them to pay 99% of the tax revenue.
....

I am consistently saddened by the lack of quantitative reasoning skills amongst even our "educated".

Yes, and many in this country pay no income taxes while draining the system dry. Sorry, I am one of those "reap what you sow" kind of people. I wasn't raised to live off handouts from others.

--LinkRemoved--

I am consistently saddened by the lack of quantitative reasoning skills amongst even our "educated".

Also, whether you think taxes on the rich are too high or too low, they are lower now than they've ever been:

--LinkRemoved--

[ndirish2010]

And they are still too high. A system that penalizes people for doing well is hardly a good system. Fairtax ftw, at least everyone pays the same rate and it is based on something that we can easily figure out- actual consumption.

[barry]

Raising taxes don't necessarily increase revenue, we had tax rates as high as ninety percent, and tax revenue has stayed a similar percentage of GDP (hint: the rich will change their behavior to keep their money from being as heavily taxed)

http://blogs.marketwatch.com/fundmaster ... e-revenue/

and it's the entitlement spending that is out of control, this is inevitably what happens when ponzi schemes start to fall apart, see low birth rate

http://www.american.com/archive/2010/ma ... looks-like

[WSJ_Law]

Would a default situation ever possibly increase the demand for legal work? Debt restructuring, revisions of tax codes, etc.? Any scenarios where this benefits our (intended) profession or no?

[sunynp]

Right now it looks like unsubsidized loans for graduate school will remain, but subsidized loans are probably over after July 1, 2012.

The Huffington Post did not provide details of the students' conversation with the president, which was reportedly brief. Mr. Obama has resisted Republican efforts to eliminate the in-school interest subsidy on federal student loans for undergraduates as part of a debt deal, though he supports ending the subsidy for graduate students as a way to cover the shortfall in the Pell Grant program.

So far, that approach is prevailing in debt negotiations. Members of Congress are preparing to vote on a pair of bills—offered by the House speaker, John A. Boehner, and the Senate majority leader, Harry Reid—that would end the in-school interest subsidy on federal loans made to graduate students and provide $17-billion to $18-billion in additional money for the Pell program. It's unclear, however, whether either measure has enough votes to pass in both chambers. Lawmakers have only a few more days to reach a deal to raise the nation's borrowing limit; if they don't have one by August 2, the country could default on its debt.

Obama speaks to college student presidents

FYI: the Huffington Post article

and

Under both the Boehner and Reid plans, no new subsidized loans would be issued to graduate students after July 1, 2012. The savings would be used to help fund the Pell Grant program, which provides lower income undergraduates with grants of up to $5,500 a year. (More explanation of how the Pell program would be funded is at the Ed Money Watch blog here.)

Debt ceiling plans take aim at graduate student loans

[lawgod]

Under both the Boehner and Reid plans, no new subsidized loans would be issued to graduate students after July 1, 2012. The savings would be used to help fund the Pell Grant program, which provides lower income undergraduates with grants of up to $5,500 a year. (More explanation of how the Pell program would be funded is at the Ed Money Watch blog here.)

Blazes Durn it!
Those absolute savages. I want my subsidized loans!

(Of course, no subsidized loans just makes tuition go down in the long run, if we assume any sort of market economics, or any sort of consideration for our ability to pay applies.

[Veyron]

Under both the Boehner and Reid plans, no new subsidized loans would be issued to graduate students after July 1, 2012. The savings would be used to help fund the Pell Grant program, which provides lower income undergraduates with grants of up to $5,500 a year. (More explanation of how the Pell program would be funded is at the Ed Money Watch blog here.)

Blazes Durn it!
Those absolute savages. I want my subsidized loans!

(Of course, no subsidized loans just makes tuition go down in the long run, if we assume any sort of market economics, or any sort of consideration for our ability to pay applies.

Biiiiig assumptions. If they are going to drop the subsidy, they should at least let us get private loans.

[lawgod]

Under both the Boehner and Reid plans, no new subsidized loans would be issued to graduate students after July 1, 2012. The savings would be used to help fund the Pell Grant program, which provides lower income undergraduates with grants of up to $5,500 a year. (More explanation of how the Pell program would be funded is at the Ed Money Watch blog here.)

Blazes Durn it!
Those absolute savages. I want my subsidized loans!

(Of course, no subsidized loans just makes tuition go down in the long run, if we assume any sort of market economics, or any sort of consideration for our ability to pay applies.

Biiiiig assumptions.

Assumptions make a donkey out of u and umption

[sunynp]

Under both the Boehner and Reid plans, no new subsidized loans would be issued to graduate students after July 1, 2012. The savings would be used to help fund the Pell Grant program, which provides lower income undergraduates with grants of up to $5,500 a year. (More explanation of how the Pell program would be funded is at the Ed Money Watch blog here.)

Blazes Durn it!
Those absolute savages. I want my subsidized loans!

(Of course, no subsidized loans just makes tuition go down in the long run, if we assume any sort of market economics, or any sort of consideration for our ability to pay applies.

Are we talking about "market economics" and "ability to pay" in the context of law school tuition and graduate student loans? Just checking.

I don't really know what it means, except that changes to the loan program will probably not be a great thing for students. You get another 3 years of interest accruing on the total amount of the loans.

[nmare]

Most who say "the rich don't pay their fair share of taxes" are probably only looking at the FICA and its corresponding Social Security portion of the tax (6.2% for 2010, although I heard it is going to be dropped for 2011) in which only $106,800 of compensation can be collected (total of about $6600 max). Like stated by numerous people above, these people who claim they are not being taxed enough do not realize how much they are being taxed in income tax.

[ahduth]

Would a default situation ever possibly increase the demand for legal work? Debt restructuring, revisions of tax codes, etc.? Any scenarios where this benefits our (intended) profession or no?

I doubt it. More likely it just launches our economy into a true deflationary death spiral that makes Japan look like a paragon of economic management.