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Comment Realistic lending (Score 1) 827

There is a simple way to effectively limit student loan debt, and that is to ensure that loans are based on realistic estimates of how much a student can pay back. Kind of like every other type of loan. However, because this is so simple and obvious, it will never actually be implemented.

If you limit the amount loaned to, say 10% of average expected annual income over the 10 years after graduation (based on actual surveys of past students in similar programs, expected unemployment rates, etc), then you wind up in a situation where both schools and students are constrained by reality. Schools would be forced to bring fees back down to realistic levels, and you wouldn't have to worry about theatre majors paying down $100,000 in debt while working at Starbucks.

Comment Re:Troubling quote from the article (Score 1) 432

Let's say that a week ago I pissed off a cop or an informant without realizing it, and that person actually had the drugs planted. Hell, maybe someone has a quota to meet and they 'know' I use drugs, anyway. The police pull me over for some moving violation or other, follow the steps you outlined, and find drugs. I say they're not mine, and it's true, but no one believes me and I go to jail. I have no explanation for what happened, because as far as I am aware the whole thing started with a traffic stop.

Comment Re:Not really a problem... (Score 1) 130

In most markets, eventually you have to conform to reality. As an example, bid up the price of real estate about certain market fundamentals and you have a bubble that will eventually burst. In this case, reality may conform to the market, with bizarre consequences. It's actually a very interesting economic problem.

Comment Re:This is great news! (Score 1) 467

It's a prisoner's dilemma. Let's say you're a lender for a big bank, and your job/bonus depends on your performance in relation to other lenders. The bank isn't taking on extra risk by making these loans (due to securitization), so there is no penalty for making a risky loan, but if you don't make the loan, then you maybe lose your job. If you don't make the loan, you will be replaced by someone who will. At that point, the rational thing to do is make the loan, even if you know there's a good chance at a default.

That's on an individual scale. At the organization level, the same thing is happening. If every other bank is making these loans and their earning are up because of it, your stockholders are going to want in on the action. Upper management's jobs are now on the line, so they send the orders down to the rank and file to make the loans. Again, it's the rational thing to do given the circumstances.

In a perfect world going against something like this wouldn't be career suicide, but the reality is that we don't allow people to act on their own conscience without severe consequences. The world is full of perverse incentives like this. The only way to stop it is through transparency and sensible regulations.

Comment Re:Well you know... (Score 1) 499

I remember taking some medication for a sudden, severe condition and realizing after about a week that I was craving it. Little thoughts like, 'if I just take one of those pills I will be able to sleep' or 'I really should have some of those pills in case this suddenly gets worse while I'm out.' I found out after that the drug I had been prescribed was actually highly addictive. Now, at that point I was not quite so hooked that I couldn't wean myself off, but had my condition been worse, or if I hadn't caught the warning signs despite my state of mind, I might easily have had my prescription end and found myself utterly dependent on the medication. As it was, I found myself carrying a couple pills around like a security blanket for a good six months. I have since refused medication for this particular condition out of fear that I will become addicted despite my best efforts.

It's easy to judge others when you haven't been there and seen how addictive substances weasel their way into your thoughts. It's not about being strong- or weak-minded, its about your brain chemistry being profoundly altered by the substances that you take, and realizing that you can no longer function without those substances. This is what happens when you mess around with brain chemistry in such profound ways.

I am of the opinion that all addictive medications like this should be prescribed with the patient in full understanding of its addictiveness and such that the patient is weaned off slowly. Anything else is setting the patient up for failure.

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