Ritchie’s QE for student loans

There must be some method of using QE in everything, right?

But what of those in between who have student debt? Will they continue to pay? My answer is that I think that would be a big mistake.

The reality is that QE could now be used to repurchase the student debt that has already sold and that still in state hands owned by the Student Loan Company which in total now have a nominal value of about £86 billion. This is only just over a year’s QE funding at present and I say ‘nominal’ because it is thought that up to 70% of all new graduates may never repay all of their loans meaning that the market price of this debt is way below the notional or nominal value.

If this was done then a three stage process could begin towards debt write off.

Why in buggery do you need QE? Other than to allow Ritchie to claim that it’s being used that is?

Government owns the debt. It can write it off any time it likes.

24 thoughts on “Ritchie’s QE for student loans”

  1. One way of doing it would be to restore the County and Borough Militias of old. Students who wished for a free or subsidised higher education could choose to be liable for service for a period of say 25 years.

  2. Although, it has to say that the return of service for my “free” university (it was free of fees back in the day, but I also got paid by the MoD while I was at uni) was only 5 years, not 25.

    But that was regular service rather than militia / yeomanry. Call it a year (regular) for initial training, and then 10 years reserve liability?

  3. @SE

    The principle (of the wealthy benefactor supporting the impecunious student) is a good one. Move the milk round to 18 years school leavers, get them to sign up for 5 years post graduation. Students trade debt for job security, employers know who they are getting: winners all round.

    And it’s fairer for the ugly students who can’t get a sugar daddy.

  4. John Square, trouble is you’d need a change of law to allow students to sign up to a 5-year contract in return for university funding. At the moment the employers wouldn’t be able to rely on the courts to enforce it.

  5. I am wondering if DBC Reed is the twin of Murphy whose existence came to light here last week. Just as for Reed The Land Value Tax offers the key to life, the universe and everything, for Murphy it’s QE which performs a similar function. Any comments from the Man himself?

  6. My place of work has a scheme where they will pay for you to take a relevant (STEM) degree part time (usually OU) and give you sometime off to study and if you leave within two years of finishing you have to pay them back. They used to allow a day release to university and no 2 year deal but too many people took the piss and left as soon as they got their degree.

    It’s a really good opportunity for school leavers imo. Get the work experience, a degree for free and getting paid for it.

  7. That sounds like the “sandwich courses” my Dad took in the 1960s. To go forward we have to re-invent the past?

  8. as an aside have you seen the Saggy of Ely’s latest piece of petty fascism?

    “Advertising is the only industry solely dedicated to creating unhappiness. So why don’t we do something about it?”

    “Doing something about it” seems to include (surprisingly) more state interference and control., and possible outright bans.

  9. Flatcap Army

    Sadly Tim did not get beyond the first section of the copy of ‘The curajus State’ I sent him (understandably in fairness) but his stipulation on advertising is so ludicrous its worth repeating, and he has helpfully put it in his post!

    ‘I had the courage to do so in The Courageous State. I said this on solutions (although the analysis of the harm and theoretical consequences was much longer):

    Taxes on advertising

    Advertising is, as has been noted, designed to deliberately create feelings of dissatisfaction. Adverts are intended to undermine the prospect of a person achieving their purpose by encouraging a sense of inadequacy among their target audience because they do not have the promoted products or services, whether or not they have a real need for them. This is immensely harmful to society, not least by denying hope to those who have no prospect of acquiring the products advertised, and by breeding discontent even among those who can afford them, because so soon after they acquire such products they are informed that they must now acquire another in a continual process of artificially manufactured dissatisfaction fuelled by advertising.

    Advertising is pervasive in the modern economy, but pernicious. A Courageous State will have to tackle this issue and there is no doubt that one way to do this would be through the tax system. There is, of course, advertising that is of benefit, including small advertisements in local media, job advertisements and such other announcements. Most of these could be exempted from any tax penalty on advertising simply by setting a monetary limit per advertisement below which such penalty would not apply. Above that limit, where the advertising in question would be designed to fuel demand for products and services whether or not they were a benefit to the consumer in society, there must be a radical overhaul of our tax system as it relates to advertising.

    First, no tax relief on such advertising should be available within the tax system, so that the cost of advertising cannot be offset against the profits generated from trade to reduce a taxpayer’s profit on which they owe tax.

    Second, any value-added tax charged on the supply of advertising services to a business should be disallowed as an input in the VAT reclaims it makes from H M Revenue & Customs. In other words, that VAT then becomes a business cost of advertising.

    The impact of these two moves is obvious: it is to increase the cost of advertising, and that would be deliberate. Tax has to be used to counter the harmful externalities created by the market, and the feelings of inadequacy, indifference, and alienation promoted by advertising in very many sections of society are almost universally harmful.

    There would, however, be a cost to such arrangements: the media would of course suffer from a loss of income. The media has, however, itself been under scrutiny of late, and has not always emerged with its reputation intact. While media independence is vital, so is its objectivity and in that case there appears to be strong merit in using some, or all, of the additional tax revenue raised by government as a result of these proposed taxation changes on advertising to fund the media, both nationally and as important locally, but only if it agrees to act with political impartiality in the way that the BBC is obliged to do. If it did that then I think funding to compensate the media for some of the loss of revenue it will suffer as a result the loss of advertising revenue would be appropriate.

    But also note that what is being suggested here is hardly without precedent: when it became obvious that business entertaining was giving rise to abuse, tax and VAT relief on it was stopped in much the same way as I now suggest for advertising. Many said that the restaurant and other trades would collapse as a result. They did not, of course, do so.’

    Ban advertising to children

    A type of advertising that is particularly pernicious is that aimed at children. There is no parent that cannot recount the nagging of a child who wants a product that is either beyond the parent’s means or that is wholly inappropriate to the child’s needs who cannot also directly attribute that demand from their child to advertising aimed solely at children.

    There is only one solution to this problem and that is to ban all advertising aimed at children. This will not stop children enjoying their lives to the full; indeed, as almost any parent will tell you, a cardboard box is one of the best toys ever invented, with the stick a close-run second choice. And of course, any parent will be at liberty to take their child to any toy shop whenever they like with a child able to make a better, more informed, and freer choice if advertising does not distort their prior decision-making. Creating young people able to form their own opinion is one of the strongest objectives of the Courageous State. Banning advertising aimed at children is one way to achieve this.

    I did ask him how this would apply to the state (so would public information campaigns be allowed) to which his reponse was that I was a troll. I leave others to make what they can of a policy which is frankly different only in degree from North Korea…..

  10. Bloke in Costa Rica

    They still have sandwich courses. Nephew’s doing one.

    Flatcap: Murphy sees something he doesn’t have and his avaricious little worm of a brain makes him unhappy and keen to seize it. Normal people who aren’t fucked in the head see something and aspire to owning it, without nicking it off someone else.

  11. ‘A type of advertising that is particularly pernicious is that aimed at children. There is no parent that cannot recount the nagging of a child who wants a product that is either beyond the parent’s means or that is wholly inappropriate to the child’s needs who cannot also directly attribute that demand from their child to advertising aimed solely at children.

    There is only one solution to this problem and that is to ban all advertising aimed at children. ‘

    Or you could do what we did with our kids when they were young, which was say ‘No’. It’s actually good the a child to be told no.

  12. I believe that the state found an illiterate population was a hamper to military training in WW1.
    If you cant read or use machines you often can’t work a machine gun
    So why now do the states subjects have to pay for ‘education’ to handle modern equipment which is a means to increase their taxability – a benefit for the state..

  13. So why now do the states subjects have to pay for ‘education’ to handle modern equipment

    Which part of academia trains the Queen’s subjects (or the state’s citizens) to “handle modern equipment”?

    Some tertiary education is clearly good for the public at large. More is clearly beneficial to the recipient, who can then use (or abuse) it for a variety of effects. Most is neutral or actually value extracting. Some is downright harmful to society and even to the victims of it.

  14. ““Advertising is the only industry solely dedicated to creating unhappiness.”

    Rolls eyes.

    If it was, you wouldn’t see ads for slimming products showing thin, smiling women – it would be showing ads of fat women and someone snarling “this is what you look like, you fat bitch”.

    Another teenage scribble from the fat, late middle-aged cockend.

  15. “…directly attribute that demand from their child to advertising aimed solely at children.”

    Really? When was the last time anyone saw an advert to buy the new England football kit?

    The man is a total cockend.

  16. Rob

    He does indeed – the only consolation being that at least there are fewer typos than in his fat fingered typing on the TRUK blog, but his prose style is similar between the two different media…..

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