Brian Tamanaha's New York Times editorial

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flem
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Re: Brian Tamanaha's New York Times editorial

Postby flem » Thu Jun 07, 2012 1:33 pm

CanadianWolf wrote:You're trying to make a simple problem more complicated than it is.


No, you're really oversimplifying it

Making loans dischargeable through bankruptcy is only a piece of the puzzle

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Re: Brian Tamanaha's New York Times editorial

Postby CanadianWolf » Thu Jun 07, 2012 1:33 pm

Care to explain ?

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flem
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Re: Brian Tamanaha's New York Times editorial

Postby flem » Thu Jun 07, 2012 1:36 pm

CanadianWolf wrote:Care to explain ?


As long as the government is still in the business of lending money under some vague notion of equal access to education, there's still an unlimited supply of money not based on credit. You keep saying "lenders", but there's only one lender in this scenario that enables this, and it's the government.

There's still no risk evaluation. This just allows people to get making the same stupid choices and then declare bankruptcy when shit goes sour. If you let private lenders evaluate the risk, they won't lend to retards going to TTTs in the first place, and there will be less people that are abjectly fucked.

Edit: and it's also ridiculously insulting to patronize Tiago on this topic, as he's one of the most informed people I've seen in these discussions.

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Tiago Splitter
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Re: Brian Tamanaha's New York Times editorial

Postby Tiago Splitter » Thu Jun 07, 2012 1:38 pm

Again: The Federal Government guarantees student loans. Any idiot who gets through college and takes the LSAT can borrow the full cost of attendance through government guaranteed loans. To the extent that a private bank makes that loan (does that even happen anymore?) there is no risk to the lender.

Is anybody else failing to understand this?

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Re: Brian Tamanaha's New York Times editorial

Postby CanadianWolf » Thu Jun 07, 2012 1:45 pm

I'm addressing the source of the problem: Easy money.

Government loan programs can be adjusted to help just the truly needy.

Government loans will diminish if law school tuition is lower. Unlimited, easy money enables law schools to charge beyond what is needed to simply be profitable. This encourages more to enter the law school business.

Returning to the pre-2006 bankruptcy code which permitted discharge in bankruptcy of student loans will affect all lenders public & private.

No need for band-aids when the source of the problem can be curtailed.

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minnbills
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Re: Brian Tamanaha's New York Times editorial

Postby minnbills » Thu Jun 07, 2012 1:50 pm

Dude, the only problem your solution actually addresses is to help out people who can't pay off their debt. This will do nothing to bring down the costs of the education or stem the flow of new JDs. It may actually exacerbate it as people going in who are the most susceptible to failure can count on discharging their debt and act more recklessly.

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Re: Brian Tamanaha's New York Times editorial

Postby CanadianWolf » Thu Jun 07, 2012 1:54 pm

If it helps, look at what happened recently in the housing market when the easy money was cut-off. Dischargeable debt will stem the tide of seemingly unlimites easy money whether or not guaranteed or supplied by the government.

Tamanhana's editorial tries to stem the flow by placing artificial limits on the supply of money to law schools & law students. This doesn't go far enough to rectify the real problem of an oversupply of lawyers & law schools.
Last edited by CanadianWolf on Thu Jun 07, 2012 1:58 pm, edited 1 time in total.

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flem
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Re: Brian Tamanaha's New York Times editorial

Postby flem » Thu Jun 07, 2012 1:56 pm

CanadianWolf wrote:If it helps, look at what happened recently in the housing market when the easy money was cut-off.


lol these two situations are not analagous

this quote

CanadianWolf wrote:You're beginning to understand.


keeps getting better and better in terms of irony

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DaftAndDirect
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Re: Brian Tamanaha's New York Times editorial

Postby DaftAndDirect » Thu Jun 07, 2012 1:58 pm

CanadianWolf wrote:If it helps, look at what happened recently in the housing market when the easy money was cut-off.


How does turning previously non-dischargeable debt in to dischargeable debt cut off easy money?

Like minnibills said, this pretty much makes the money easier becaues it softens the effects of the worst case scenario (default) and would likely encourage more reckless risk taking.

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Re: Brian Tamanaha's New York Times editorial

Postby CanadianWolf » Thu Jun 07, 2012 1:58 pm

@tflem: Care to explain ?

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Re: Brian Tamanaha's New York Times editorial

Postby CanadianWolf » Thu Jun 07, 2012 1:59 pm

Even the US Government is vulnerable to discharge in bankruptcy. If you believe that the US Government will continue to guarantee bad debt without reacting to the situation, then we disagree on a very fundamental point.
Last edited by CanadianWolf on Thu Jun 07, 2012 2:02 pm, edited 1 time in total.

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Tiago Splitter
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Re: Brian Tamanaha's New York Times editorial

Postby Tiago Splitter » Thu Jun 07, 2012 2:01 pm

CanadianWolf wrote:If it helps, look at what happened recently in the housing market when the easy money was cut-off. Dischargeable debt will stem the tide of seemingly unlimites easy money whether or not guaranteed or supplied by the government.


You aren't cutting off the supply of easy money though. Borrowers can still borrow as much as they need from the government.

CanadianWolf wrote:Even the US Government is vulnerable to discharge in bankruptcy.


They might get sick of having to pay off loans when people go into bankruptcy, but that's it. Assuming no other policy changes they would still be loaning tens of thousands of dollars to kids to attend TTTs.

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briviere
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Re: Brian Tamanaha's New York Times editorial

Postby briviere » Thu Jun 07, 2012 2:02 pm

DaftAndDirect wrote:
CanadianWolf wrote:If it helps, look at what happened recently in the housing market when the easy money was cut-off.


How does turning previously non-dischargeable debt in to dischargeable debt cut off easy money?

Like minnibills said, this pretty much makes the money easier becaues it softens the effects of the worst case scenario (default) and would likely encourage more reckless risk taking.


I think his assertion was that if law school debt was dischargeable, then lenders would cease to lend to prospective students without properly vetting their chances for professional success and, thus, likelihood of being able to pay back the loans.

The reason this doesn't work is because those private lenders have their profits guaranteed by the government since student loans are gov't backed. This is the reason government would have to get out of the loan game in order to reintroduce some semblance of market pressure and sanity.

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Re: Brian Tamanaha's New York Times editorial

Postby CanadianWolf » Thu Jun 07, 2012 2:02 pm

But there will be other policy changes.

Again, my approach attacks the source which should cause others to react---even the US Government. Why deal in band-aid type solutions when there is a more comprehensive & effective solution readily available ?
Last edited by CanadianWolf on Thu Jun 07, 2012 2:04 pm, edited 2 times in total.

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briviere
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Re: Brian Tamanaha's New York Times editorial

Postby briviere » Thu Jun 07, 2012 2:03 pm

Tiago Splitter wrote:
CanadianWolf wrote:If it helps, look at what happened recently in the housing market when the easy money was cut-off. Dischargeable debt will stem the tide of seemingly unlimites easy money whether or not guaranteed or supplied by the government.


You aren't cutting off the supply of easy money though. Borrowers can still borrow as much as they need from the government.

CanadianWolf wrote:Even the US Government is vulnerable to discharge in bankruptcy.


They might get sick of having to pay off loans when people go into bankruptcy, but that's it. Assuming no other policy changes they would still be loaning tens of thousands of dollars to kids to attend TTTs.


This.

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flem
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Re: Brian Tamanaha's New York Times editorial

Postby flem » Thu Jun 07, 2012 2:05 pm

CanadianWolf wrote:But there will be other policy changes.

Again, my approach attacks the source which should cause others to react---even the US Government. Why deal in band-aid type solutions when there is a more comprehensive & effective solution readily available ?


1) It doesn't and I seriously can't believe you're not getting that
2) How is pulling the government completely out of student loans a "band aid solution"

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Re: Brian Tamanaha's New York Times editorial

Postby CanadianWolf » Thu Jun 07, 2012 2:07 pm

To me, it's unrealistic to assume that the US Government will not react in any meaningful manner with respect to student loan bankruptcy discharges. Even now many Republicans want to do away with US Government backed student loans.

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Re: Brian Tamanaha's New York Times editorial

Postby CanadianWolf » Thu Jun 07, 2012 2:08 pm

@tflem: When did you propose getting the government out of the student loan business ?

I agree that this would be effective, but unlikely to happen so long as Democrats have any say.

Bankruptcy dischargeability should force the US Government to severely limit government's participation in this market to the truly needy.
Last edited by CanadianWolf on Thu Jun 07, 2012 2:11 pm, edited 1 time in total.

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flem
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Re: Brian Tamanaha's New York Times editorial

Postby flem » Thu Jun 07, 2012 2:10 pm

CanadianWolf wrote:@tflem: When did you propose getting the government out of the student loan business ?

I agree that this would be effective, but unlikely to happen so long as Democrats have any say.


flem wrote:As long as the government is still in the business of lending money under some vague notion of equal access to education, there's still an unlimited supply of money not based on credit. You keep saying "lenders", but there's only one lender in this scenario that enables this, and it's the government.

There's still no risk evaluation. This just allows people to get making the same stupid choices and then declare bankruptcy when shit goes sour. If you let private lenders evaluate the risk, they won't lend to retards going to TTTs in the first place, and there will be less people that are abjectly fucked.

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Tiago Splitter
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Re: Brian Tamanaha's New York Times editorial

Postby Tiago Splitter » Thu Jun 07, 2012 2:11 pm

CanadianWolf wrote:To me, it's unrealistic to assume that the US Government will not react in any meaningful manner with respect to student loan bankruptcy discharges. Even now many Republicans want to do away with US Government backed student loans.


1) The only realistic expectation of the Federal government is to expect changes to happen very slowly. Letting people discharge loans in bankruptcy while the government foots the bill doesn't guarantee any kind of positive solution.

2) Many Republicans have held that stance for decades. Obviously, nothing has happened as a result.

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Re: Brian Tamanaha's New York Times editorial

Postby CanadianWolf » Thu Jun 07, 2012 2:14 pm

Government participation in the market is necessary if the goal is to help the truly needed & underrepresented. Bankruptcy dischargeability should force the necessary changes. Government participation in the student loan market needs to severely curtailed, not eliminated, in my opinion.

@tiago splitter: Agree that government change comes slowly. Changing one provision in the bankruptcy law should be much more efficient.
Last edited by CanadianWolf on Thu Jun 07, 2012 2:15 pm, edited 1 time in total.

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briviere
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Re: Brian Tamanaha's New York Times editorial

Postby briviere » Thu Jun 07, 2012 2:15 pm

I'm sure many Democrats who've taken time to look into the student debt issue share the opinions of those Republicans.

But, the real question is this: with student debt surpassing credit card debt, how many in the financial services industry do you think hold this view? We can't even get rid the mortgage interest tax deduction, and congress has known that thing was a dud for decades.

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flem
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Re: Brian Tamanaha's New York Times editorial

Postby flem » Thu Jun 07, 2012 2:15 pm

CanadianWolf wrote:Government participation in the market is necessary if the goal is to help the truly needed & underrepresented.


Except it doesn't, and it's shameful that no one meaningfully discusses this.

CanadianWolf wrote:Bankruptcy dischargeability should force the necessary changes.


This only really addresses the effect, and you're hoping it will, in turn, address the cause

CanadianWolf wrote:Government participation in the student loan market needs to severely curtailed, not eliminated, in my opinion.


Meh

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DaftAndDirect
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Re: Brian Tamanaha's New York Times editorial

Postby DaftAndDirect » Thu Jun 07, 2012 2:16 pm

CanadianWolf wrote:@tflem: When did you propose getting the government out of the student loan business ?

I agree that this would be effective, but unlikely to happen so long as Democrats have any say.

Bankruptcy dischargeability should force the US Government to severely limit government's participation in this market to the truly needy.


You're basically asking the US government to make itself more vulnerable to losses due to student loan defaults as some sort of method to "wake the government up" so that it reacts by solving the real problem. It is unrealistic to expect the government to step out of the student loan business, but I think it's even less realistic for the government to volunteer to deliberately lose money.

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Tiago Splitter
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Re: Brian Tamanaha's New York Times editorial

Postby Tiago Splitter » Thu Jun 07, 2012 2:17 pm

CanadianWolf wrote:Bankruptcy dischargeability should force the US Government to severely limit government's participation in this market to the truly needy.


Well now we agree on the solution just not how to get there. Just allowing discharge in bankruptcy might eventually fix the problem but it will take years if not decades for the government to make it happen. In the meantime we have way more JDs than necessary but most of them will just dump the debt after a few years looking for work.




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