Success Starts With Failure

Donald Trump is wrong.

We don’t need to make America great again.

We need to let Americans fail again.

It all starts by solving our student loan crisis.

According to recent reporting by the Wall Street Journal, the most recent graduating class, the class of 2015, was the most indebted in American history.

Students who threw caps in celebration last May held, on average, $35,000 in debt.

While that’s only a few thousand dollars more than the average amount of debt held by students who graduated one year earlier in 2014, it’s over $20,000 more than the average amount of debt held by students who graduated ten years earlier in 2005.

There’s absolutely no reason to expect that the class of 2016 won’t be in even more debt.

The worst part of all, though, is that that there is no escape for the estimated 37 million Americans struggling to pay off their college loans.

Thanks to the Bankruptcy Reform Act of 2005, it’s now illegal for them to get rid of their student loans through bankruptcy, something you can do with pretty much every other kind of debt.

By the way, do you know what the other types of payments are illegal to discharge through bankruptcy? Child support payments, criminal reparations and unpaid taxes.

That’s right, the U.S. legal code treats college grads the same way it treats tax dodgers.

Pretty ridiculous, right?

You bet.

There is absolutely no reason why student loan debt should be treated differently from any other kind of consumer debt.

The banksters just wanted a little freebee from the government, and in 2005 Congress gave it to them.

And here’s the thing: this isn’t just a problem for all the $20,000-in-debt college grads out there who now have the financial equivalent of a ball and chain strapped to them for the rest of the working lives.

This is a problem for all of us.

Not only does it suck up thousands of dollars in demand that would otherwise be giving our economy a much-needed jolt, it also prevents college grads from experiencing one of the most important tools for future success: failure.

David Akidjian talks about this in a recent piece for DailyKos.

The shackles of student loans, he points out, prevent many young college grads from taking the risks that make the American way of doing business so vital.

Stuck paying off a mountain of debt that in many cases is equal to the average entry level salary, they’re (understandably) unwilling to do what earlier generations did and a take out a line of credit and start a business.

And because of this, they’ll never really know what it means to fail.

I do.

I failed in my very first foray into running a business, and it’s helped me more than any management seminar ever could.

Back in the late 1960s, I started and ran a TV and stereo repair shop in East Lansing Michigan. We called it The Electronics Joint.

It did well for a while, growing to five full-time employees, but went under when I overinvested in repair technology that, it turned out, was unnecessary.

The new line of solid-state TV’s filling the marketplace failed much less frequently than the old tube-type TVs, but I borrowed and spent a pile of money on testing and repairing equipment for TVs and stereos that just weren't breaking down.
I owed a bunch of money to the bank for that newfangled test equipment, so I ended up having to declare a bankruptcy.

I couldn’t get a credit card for a few years afterwards, but that was pretty much all that happened. No landlord or employer checked my credit, and I was able to easily move on with my life, starting another business the following year.

I learned a tremendous business lesson from that screw-up, and, like Henry Ford and Donald Trump, I was able to use bankruptcy to wipe my slate clean.

That’s a privilege today’s college grads just don’t have.

They’re too in debt to go out there and borrow money to start a business, and they’re barred by law from getting rid of the crushing loans they already have.

It’s time to once again make it safe in America to fail.

It’s time to make college free for everyone and it’s time to repeal the Bankruptcy Reform Act of 2005 and give American college grads the chance to take the risks that make this economy great.


Willie W's picture
Willie W 8 years 17 weeks ago

Seems like college tuition has sky rocketed. If our tax dollars are going to pay for higher education, I don't expect that the colleges should be allowed to make a killing on tuition. Community colleges seem to be holding the line, so why do some who can't even come close to being able to afford it, opt for that Ivy League experience?

eatroots's picture
eatroots 8 years 17 weeks ago

On top of loans this gen x'r would not jump in on. A completely rigged housing and rental market is playing out that is bleeding this nation dry. Oops be quiet...The equity generation might get upset!

cccccttttt 8 years 17 weeks ago

Why is the GI bill never discussed as a successful model for dealing with student education?

Read that it created a large surge in the middle class.

Instead of going in the military, make it a two year work program in fixing up slums, tutoring kids, and other projects to improve quality of life.


Hephaestus's picture
Hephaestus 8 years 17 weeks ago

#3 Not quite politically correct notions

How dare you?

2950-10K's picture
2950-10K 8 years 17 weeks ago

Government paying for college is reserved for only the wealthy nations. We're a nation in which a relative few have the lion's share of the wealth, which makes us for all practical purposes, a poor nation, one with an ever expanding lower income class.

Concentrated wealth for guys like Trump isn't enough, he's on a power trip....see where that head problem gets our ever shrinking middle class .....LOL

How have we become so damn blind to the history of labor in this country?????

The full blown return of Fascism has Woody Guthrie rolling over in his grave.

Bideford2007's picture
Bideford2007 8 years 17 weeks ago

My son went to medical school. We paid his rent, his car, his insurance, dental bills, clothes, and gave him spending money. He in turn borrowed the tuition money while we also helped pay for books.

When he finished he was $120,000 in debt and his first resident's job was at St. Lukes Roosevelt Hospital in NYC which is attached to Columbia University. He got paid $34,000 per year and had to pay rent in the hospital housing across the street. His work week was more than 80 hours and he was exhausted many days.

He made note of the fact that residents from other countries had no student debts because the country they lived in did not charge to educate anyone and especially needed doctors.

One of the reasons so many doctors now specialize and family physicians are scarce is because they get out of medical school with the same debt but family practice does not pay enough to get rid of the debt and have a life.

Hephaestus's picture
Hephaestus 8 years 17 weeks ago

All of these ills are the result of banks

Private banks need to be broken up

They, and their "fractional reserve" system needs to be declared as what it truely is

Lending your money to others without consent

Instant-RunOff-... 8 years 17 weeks ago

Hephaestus is right. The glaring omission in Thom's article is that he doesn't reveal the fact that private banks create those student loans out of thin air, simply by typing numbers into a computer database. Instant money creation - the absurdity of our privately owned, privately controlled debt money system.

So these banks are holding some $1.4 Trillion in student loan debt, the principal of which they created, instant income for which they aren't even taxed. And they get incredible government mandated interest rates and fees of some 6-8% return on money they created out of nothing. While they give us less than 1% on our deposits. A criminal racket. Another one of many gifts our corrupt politicians give to criminal banks.

Very simple for the government to create a public bank and use it to issue (create) student loans at a 1-2% interest rate:

Who needs private, criminal banksters with their insatiable greed. They trashed the world economy to the tune of $200T, got $16T in bailouts from the FED, are the biggest bunch of useless parasites on the planet who insist that they are above the law and cannot be held accountable for their crimes, include drug money laundering.

And Obama & Hillary ensure they are not prosecuted, putting revolving door Bank employees like Eric "the stooge" Holder in charge of the Justice dept. And Obama & Hillary are supposed to be "friends of African Americans". Yeah, right - only African American Banksters & their cronies.

Interesting ultra-conservative Finland, after trying the Banksters neoliberal economic policies have said Fuck-this, after 8 yrs of failure and they are the first country to start QE or Quantitative Easing for the people. You got to hand it to the pragmatic Fins.

A must-see video that explains all of this:

"...In this special Winter Why Not? episode of the Keiser Report, Max Keiser and Stacy Herbert talk to Professor Steve Keen about solutions to our unpayable debts, including: basic income, a People’s Quantitative Easing and a global debt jubilee. Professor Keen explains why a modern debt jubilee could please both debtors and creditors, savers and spenders..."

An excellent documentary on the subject is 97% owned - Economic Truth Documentary:

Watch the Money As Debt Youtube videos by monetary theorist PAUL GRIGNON:

Lrpcindy's picture
Lrpcindy 8 years 17 weeks ago

Who do we write to appeal the Bankruptsty Reform Act of 2005? Thank you!

RLTOWNSLEY's picture
RLTOWNSLEY 8 years 17 weeks ago

Willie W; I'm with you WW, considering our ever expanding Service Economy and related jobs that a high school graduate is abundantly qualified to perform, an Ivy league education is a classic case of over kill and a college degree has become more a determiner of class status than preparation for a specific career. Apparently a lot of people in this country have totally ignored the events that have reshaped our economy over the past thirty years, the remaining industries in this country are looking for the cheapest talent available and these services are increasingly available over the Internet from foreign companies that can provide a host of business services like accounting, engineering, planning, etc. without the cost associated with maintaining a full time employee. If most Americans don't feel totally betrayed by now, American universities have established foreign campuses in various Asian countries that teach their students how to market their services to American enterprises, either over the Internet or through low pay H1B Visa imported talent that competes directly with our college grads ! In closing, no one has the guts to ask the all important question concerning the so-called college debt problem, "Was someone holding a gun to your head when you signed the loan agreement ?". But we can't be too surprised by these actions after watching for the last three decades as Americans mortgaged their futures with massive credit card debt to maintain a lifestyle that was no longer affordable due to falling wages that have plagued this economy since the 1970s !

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