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The part and the whole

Our accountant turned economics professor has an idea:

That means that the interest charge on this will be around £3,000 plus a year, and the average student is repaying in England and Wales, a little over £1,000 a year in student loan. The total repayments in the last year for which I can get data from HM Revenue and Customs, who actually collect student loan repayments, is about £4 billion in a year.

The total interest charge on the £200bn outstanding in student loans was at around that 6 – 7 per cent figure. – well, you can work it out for yourself, £12 – £14bn. In other words, the interest being charged is never being repaid by the students who are borrowing this money, supposedly.

So, what is the point of charging this interest to students when we know that over 30 percent of all student loans will never be repaid? because people will reach the age where the cut off on repayment arrives well before their loan balance is settled out of their wages, and that’s true even under the new schemes just being introduced.

So, let’s not charge interest on student loans!

Erm, some number – from the above, 70% of them – of student loans are repaid, including the interest. This aids in subsidising the cost to everyone else of the 30% which are not. As, you know, that’s how interest rates work – there’s the time value of money plus the risk of default. So, if we stop charging interest at all then those richer, higher earning folk – those who do repay their loans with interest – stop subsidising those lower paid – who do not repay – and the taxpayer has to pick up the balance.

Well, interesting in a way I guess. First time we’ve seen Spud arguing for the higher paid to stop subsidising the lower paid. But other than that there’s not a lot to recommend it.

22 thoughts on “The part and the whole”

  1. Loans for any course in which Murphy has involvement as lecturer, tutor or examiner or which uses his materials, should have a penal rate of interest applied.

  2. This is something I’ve never really understood about lefties and free stuff mainly provided for the richer.
    Corbyn wanted university tuition fees abolished, Spud too, free prescriptions (lower income earners are already exempt) and this year my local communist MP has called for the removal of parking charges at the beach front.
    Scotland is even worse on this with no toll roads. The people on UC withdrawal rates aren’t buying cars and driving to Skye.
    I wonder if it’s about control – we made this free – be grateful. But it’s just shifting who pays.

  3. Everything is about control. See their obsession with “running” the weather, sorry, the economy, to their explicit phrasing of “levers of power”.

  4. I liked the idea of linking each university’s funding to their former students’ repayment of their loans, so that the university effectively bore the cost of write-offs.

    It would make them think a bit more about what courses they offered.

  5. I think it’s about two things:
    1) impact on yourself and people like you: politicians often identify with people who do stupid degrees that they struggle to repay. There are not a lot of STEM graduates among politicians (or their children)
    2) they want to encourage people to go to thw university so they can become more like the leftist politicians (which means voting for them)

  6. Bongo said:
    “Corbyn wanted university tuition fees abolished”

    I assumed that was more to do with his support base being teenage Trots.

    But otherwise, perhaps control (as you say) – ‘‘nothing outside the State’? Perhaps also expanding their client base of people getting free stuff (as with the NHS)?

  7. Murphy is being paid to give lectures that are worth less than the cost to the unfortunate students listening to them. So he wants the fortunate non-listeners to increase their subsidy to the unfortunate listeners. Otherwise even Islington poly (so-called “City University is in Islington, *not* the City) might realise that its astudents would be better off if they cancelled his lectures.
    It’s not rocket science to read Murphy’s motives

  8. I think reviewing Murphy’s documented commitments the cost of them totalled the combined GDP of China, Japan and the US on an annual basis, a critique he countered by referring to a near decade old paper from the Bank of England regarding ‘monetary creation in the modern economy’ and an utterly bizarre ideology called ‘MMT’ which apparently postulates that infinite money creation is eminently possible with no inflationary impact.

    Like the man himself, both notions are batshit insane and render any other aspect of his analysis worthless. Of course as I cannot mention enough, you can almost smell the desperation with the SNP collapse. His last chance of avoiding penury in old age seems to have disappeared so the future is a continuation of his four decades long homage to the old Western movies ‘Low Fens Grifter’.

  9. Obviously it’s a bad deal and the Govt should stop “lending” the money where there is little chance of recovering it.
    Knackers courses mainly.

  10. Yeah, but isn’t this how State spending always works? Sure, selected parts of the great unwashed have their poverty relieved but the main beneficiaries are the comfortably off middle class who organise the spending. Where is the best policing? The areas they live. Where are the hospitals with the shorter waiting lists & better facilities? Where do the streets get cleaned? Where are the better schools? You now have a Labour government made up of these people. The people Spud sees himself as a member of.

  11. The Meissen Bison

    Has Capt. Potato penned an encomium of Jean-Luc Melenchon yet?

    One Méchant Con on another.

  12. Just deny student loans to those youngsters who seem likeliest to form the 30%. A pound to a penny says that they could be predicted rather easily.

  13. Off topic but FFS. Spud controls what gets published on his website. He allowed this comment….

    “…the IDF employed the Hannibal Directive, murdering their own people to prevent them being taken hostage by Hamas. The 1200 supposedly killed by Hamas is grossly overstated. “

  14. Yer classic Meeja Stoodies graduate is presenting the afternoon news, saying: but crimes rates have gone down, why has the prison population gone up?!?!?!?
    Sheesh!! BECAUSE the prison population has gone up, THE RESULT is crime rates go down.

  15. “…the IDF employed the Hannibal Directive, murdering their own people to prevent them being taken hostage by Hamas.” As far as I know that’s true in the sense that the Israelis have admitted to it i.e. to the existence and execution of the Hannibal Directive.

    The IDF also killed Jewish Israelis as cases of mistaken identity – it’s irregular warfare, that’s bound to happen. Hell it happens in regular warfare especially if you get close to the American army.

    “The 1200 supposedly killed by Hamas …”: my memory is that the originally publicised number was 1400; open to correction.

    ” … is grossly overstated.” It all depends on what you mean by ‘grossly’. I wouldn’t myself incline to believe any estimate proferred by either side.

  16. He really is vile Andrew C. Try mentioning that the IDF are trying pretty damned hard to only destroy terrorist infrastructure and to keep food and water coming in to the vast majority, that there is rather a lot of terrorist infrastructure as it turns out all the while saying I’m sure some soldiers are reckless or there’s been targeting incompetence, your comment won’t get through.

  17. I always find it hard to follow Spud’s logic – maybe some of that comes from only reading the excerpts here and refusing to go to the source. High blood pressure, I can’t risk it. VP is much braver than me.

    Is he really saying that if the loans won’t be recovered fully, then just drop them? Or at least, don’t charge interest so they can be inflated away?

    Doesn’t he say regularly that government debt doesn’t matter or exist? So who gives a damn about the interest charge on the outstanding liability?

  18. The Oct 7 death toll has been revised because it took some time to check and because hostages and wounded died after the event.

    Unfortunately the Israelis lack the infrastructure which allows Hamas to confirm 700 deaths, including 800 women and 500 children, within seconds of an IDF attack…..

  19. I read recently (sorry, can’t remember where, so no link) that Hamas has lost control of food distribution and in Gaza it’s now a freer market, with individual entrepreneurs buying food in Israel and selling it in street markets.
    Result: food is now cheaper and more plentiful than before the war.

  20. VP – I think reviewing Murphy’s documented commitments the cost of them totalled the combined GDP of China, Japan and the US on an annual basis, a critique he countered by referring to a near decade old paper from the Bank of England regarding ‘monetary creation in the modern economy’ and an utterly bizarre ideology called ‘MMT’ which apparently postulates that infinite money creation is eminently possible with no inflationary impact.

    Murphy’s idea that debt isn’t real does hold great appeal to adults who read Harry Potter books tho.

    I think the Treasury should start issuing project cost estimate ranges based on the range of previous officialdom cock ups over cost estimates.

    So, Net Zero™. Estimated cost: £1.4 Trillion pounds Sterling (Dr Evil finger mouth)! Muahahahaha!

    But, if we’re off by an HS2, it’ll cost over £2.4 Tn.

    If we’re off by a Queen Elizabeth class aircraft carriers, Net Zero™ will cost £2.6 Tn and so on.

    Like the man himself, both notions are batshit insane and render any other aspect of his analysis worthless. Of course as I cannot mention enough, you can almost smell the desperation with the SNP collapse. His last chance of avoiding penury in old age seems to have disappeared so the future is a continuation of his four decades long homage to the old Western movies ‘Low Fens Grifter’.

    I chuckled at that one, excellent.

    Yes, old Tuco was found out by Jeremy Corbyn’s circle (lol) and now the Caledonian life raft has hit the och nos! And New Labour has no time for the pompous git, perhaps because of his brief association with Jez, perhaps because they don’t want to be associated with quite that type of old white male lefty economics crank. (They’ve plenty of their own, and they’re splendidly Diverse.)

    btw, if Lionel had committed to the bit, moved to a council estate in Scotland when Queen Bitch was still on the throne up there and applied for the many pubsec, quangocrat and wankademia grifting employment opportunities the lefetwateratti had/have in Edinburgh (Brighton-on-the-Forth) before the current belt tightening due to imminent pubsec bankruptcy, he could be comfortably nestled in the warm embrace of a Scottish Government grant or sinecure as we speak. Drinking Buckfast and no doubt having a vigorous wank at discovering the land of rain and honey. Murphy’s a Laird!

    But alas, for our Caledonian friends. Alas! Fare thee weel, my best and dearest! Candidly they know not what they are missing.

  21. Ritchie always reminds me of the Cliff Calvin character from Cheers, speaking about any and all topics with complete confidence whilst knowing dick about fuck.

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