Pyramid Comment

This journal takes an alternative view on current affairs and other subjects. The approach is likely to be contentious and is arguably speculative. The content of any article is also a reminder of the status of those affairs at that date. All comments have been disabled. Any and all unsolicited or unauthorised links are absolutely disavowed.

Monday, December 20, 2010

Student Loans: Mechanism And Analysis

The distinction between a student tax and a graduate tax must be clarified. Made more transparent. A student ‘tax’ is as an undergraduate over the course of 3 years (or 4 years or 5 years or more). The tuition fees are applied additionally for every year. The graduate tax is after the university course ends and the debt becomes explicitly payable. But not necessarily triggered. In either case it is a tax on education and the individual before anything can be earned. The current level is £15,000 and will rise to £21,000. Raising the figure increases the interest yield by raising the bar to the minimum earnings necessary to actually reduce the debt. The government way of reducing the ‘deficit inherited from the last government’. [An overused and very tired term (cliché) - DA.]

The postgraduate scenario is not published as far as defining liabilities. To become a postgraduate means that a first degree has been conferred and so a course has ended. The explicit repayment is necessary. It must be assumed that continuing as a postgraduate does not defer any increase in student loan arrangement, but just has the potential to increase the ultimate amortised cost of added interest to the amount borrowed. The growing debt that is not serviced, but grows anyway.

Create the problem and provide the solution 

If the ‘deficit’ has been engineered, the ‘cuts’ and ‘savings’ solution caused by the last government from which it was ‘inherited’ (the problem) are just a continuation of the scheme to divert money from taxpayers. Taxpayers always 'pick up the tab'.

LibDem pledge - duplicitous

A graduate is generally ‘too-well qualified’ to undertake the average job that does not require a degree. In the current climate of ‘cuts, cuts, cuts’ and ‘savings, saving savings’, some businesses may be using the opportunity for downsizing (shedding employee numbers with the concomitant increase in workload). Computers play their part by allowing the automation of many manual operations and actual people are becoming a redundant commodity.

Job opportunities diminish and the degree can work to exclude graduates and the degree then closes the door of opportunity. The minimum wage legislation is used to do just that: pay the minimum wage necessary. A new graduate is shackled even before becoming one. The degree is the virtual collar that enables control and restricts progress.

There is insufficient detail published to refute the following appraisal of repayment terms. In fact, by not providing anything except continually pushing the concept of ‘below the earnings-threshold and no repayment is necessary’ mantra, this actually stokes up the fires of suspicion. The worst scenario is that interest is repayable from the creation of the debt to a most ‘favourable’ situation that completely freezes the account if earnings are below (or fall below) a threshold and stops the interest clock. But not being required to pay does not stop the clock. To reduce the ‘deficit inherited from the last government’, taxation by any means defines the solution to the problem.

It is a more logical conclusion that the interest clock must not be allowed to stop ticking after it was started on Day 1 of Year 1 (DA).

A loan (creation of debt) of up to £9000 (from 2012) every year has increased by about a 200%. Up from the current (2010) fee of £3290. (Why not introduce rises from September 2011? DA.) Add to the ‘buried’ future on-costs, the clearly ‘up front’ cost of accommodation: between £3,500 and £4000. That a rise in tuition fees can even be considered is incredible. If council tax, or the license to watch propaganda on TV (fee), increased by 200%, then there would be class warfare on a scale that could lead to major civil unrest in England unknown in living memory. Historically, the initial outrage and furore eventually dies down, but when the majority has their daily pattern and routine forcibly changed the reaction to issues would not go away. Selection of one part of society at any one time only demonstrates the cynicism. Another part maybe... tomorrow.

  • Car tax originally was expected to pay for road maintenance and development. It probably never did, but the entire ethic has long been forgotten. The later generations never knew this and so are conditioned to expect the new standard of the day. Extra taxation is explicitly raised to pay for these essentials as the population incessantly grows and grows and... The development of any system always involves additional cost to the taxpayer (those who receive benefits don't pay income tax). This is the ethos of raising standards of living: the parasite feeds off everything for its own growth and ultimate survival.

Starting with students and alienating all students in the public mind (possibly through organised violence by an undisclosed, but interested party) might avoid the more general national explosion of unrest. Don't hurt them all - yet. (Certainly not at the same time - DA.) Targeting only one part of society (at a time) misdirects the focus. A majority of those not yet affected might be expected to side with the government. But many are already implicated (families) and just have not yet realised that the concrete has started to set around their ankles. It will take at least 4 years to recognise that everyone is standing in slow setting concrete (fees go up from 2012). And during these four years what other effects (‘cuts’ and ‘savings’) may be added to speed up the hardening process? There will be an election before this future 'wake-up' call. Election around May 2015. Academic year September 2015. New graduates look for jobs and some will start to repay their debt and realise how it's (possibly) grown since the first year of their undergraduate course. But it's all too late. The money was 'borowed' years earlier.

The current Label is cutting and saving where the ‘deficit inherited from the last government’ was spending as though there was no tomorrow (!!!DA). Truly a definition of ‘opposition government’. What one Label does, another will produce the opposite effect.

  • It’s all about making taxpayers in general pay for the ‘inherited deficit from the last government’, though continuing with students, but only in England. Wales, Scotland and N.Ireland are excluded from the tuition fee mess and this describes devolution by stealth.
The principle of delegation is applied: hand over the operation to other territories, but retain responsibility to fund or pay for it. An English student will pay an increased tuition fee to study in Wales, Scotland or N. Ireland and students from these three British territories will continue to get free tuition in a ‘foreign’ sovereign (UK) land paid for by the English. This mechanism also contains the English and their freedom of movement by the 'pricing out' concept. Kept in prison England. And it’s so obvious it really hurts. The worst scenario does make the most sense when considering government objectives and the debt clock starts ticking from day one of each year, starting at Year 1. This maximises the debt and is the principle that pays for the ‘inherited deficit from the last government’ using students as a counter measure. The iron grip tightens and elitism triumphs. The elitism starts (is justified) with the students and will quickly infiltrate everyone else who is not one of the elite (perception = self-delusion). The ‘deficit’ and global recession are terms consistently used though they are not always linked. It depends on the convenience of government argument and its attempts to justify any implemented device to ‘reduce it’. There is no way of verifying if there is a deficit. It is assumed to be the case only because there is a global effect.

Create the problem (deficit) and provide
the solution (cuts and savings)

  • Were a cartel to be organised on a global scale, everyone sings in tune from the same hymn sheet and nobody notices how out of key everybody sings. Even the wrong hymn is sung and still nobody notices. Nothing appears to be out of kilter since everyone agrees with everyone else. (And it's that simple - DA)
In a similar way to a growing brain lesion (tumour) the skull contains the expanding growth and so creates pressure from which there is no escape from prison England (globally = Earth). Island England or Island Earth. Isolated and crushed. It’s the predicted method of absolute control. The English Channel was once a saviour. Now it represents the cell bars that contains everything within. The human skull can be a protector. Or murderer.

This is all either way off base or
highly suggestive of a 
Kafkaesque-type (1984) future