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Double Bubble Trouble

Father and daughter, encouraged by gov’t incentives, face financial ruin from education and housing bubbles.

Really tragic story on the front page of the Asbury Park Press this morning.  Young woman takes out a student loan for an overpriced college education because the government says the only way to get ahead is to have a college degree.  Father co-signs the loan, thinking he has wealth in the form of home equity but his wealth is an illusion, he’s actually in a housing bubble created by Ben Bernanke and the Federal Reserve.

The plan to support Whitney’s education seemed sound — before the housing bust. Richard Hessert invested in a two-bedroom condominium in Sea Bright, buying it in 2003 for $168,000. Banking on its appreciation, he was planning to use that money to pay for Whitney’s schooling. But when prices fell sharply, he could not find a buyer.

Upon graduation, daughter finds that the good jobs the government promised grads don’t exist.  She can’t make the payments on her debt, which is now well north of $100,000.  Meanwhile, her father’s paper wealth disappears when the housing bubble bursts.  He’s lost everything, and, like his daughter is hopelessly in debt.  He’s ready to walk away from his house and go on food stamps.

“The way this college loan system was fostered and dropped on us, it was a ripoff from the start,” Hessert said. “I’d like to leave and go somewhere else, but I don’t know where somewhere else is.”

Please watch the video below and tell me that government student loans are a good thing:


This is all because the people in the government decided that college was for everyone and home ownership was for everyone so they used government power to entice people to make bad decisions they would never have been even able to make with the natural checks and balances of a market economy.

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