The Baby Boomers did not ruin America: They too are victims of our bandit economy

This year, for the first time, the Social Security Administration paid out more to retirees than it received in Social Security contributions from working Americans.

That's really bad news; and, as journalist David Shribman recently observed, no one running for President is even talking about this problem.

Some pundits think the Baby Boomers brought this crisis on themselves through greed and improvidence. Lyman Stone, writing for the American Enterprise Institute, began his report on aging with these words: "The Baby Boomers have ruined America."

But that is bullshit.

As Shribman pointed out, the average Social Security check is only $1,413 a month--a chicken shit reward for people who worked 40 years at one of our nation's dead-end jobs.

Nevertheless, social critics say, the Baby Boomers should have been building a nest egg for their golden years, and their median savings only amount to about $100,000. But just how were the Baby Boomers supposed to have saved more money?

When I was a kid, most families were supported by one wage earner. Now almost every family has two people in the workforce. When I was a kid, many students worked their way through college and graduated with no debt. Now the average college student takes six years to get a four-year degree and graduates with $30,000 in student loans. And mom and pop may have taken out a Parent Plus loan to help get their child get through college.

Years ago, many Americans enjoyed good pension plans, but corporate America scrapped those plans and pushed everyone into 401Ks. This move forced workers to put their retirement savings in the stock market. But most Americans do not have the financial sophistication to invest in stocks and bonds. And the average Joe is not doing as well as the investment broker who is "managing" his retirement accounts.

There is a fix for this crisis, and I will tell you what it is. All Americans should be paying Social Security taxes on every dime of their wages, and people enjoying retirement income of half a million dollars or more should not get a Social Security check.

Mitt Romney, the arrogant corporate raider and oily politician from Massachusetts (or is it Utah?) pays a smaller percentage of his income in taxes than the average factory worker. Romney should be paying Social Security taxes to the max. And President Trump, who gets a Social Security check, should maybe send it back to the government.

Mitt can help solve the Social Security crisis.

A For-Profit College president is charged with a felony: Should Taxpayers Be Supporting Dade Medical College?

Last week, Miami prosecutors charged Ernesto Perez, President of Dade Medical College, with failing to report criminal arrests on a government form, which is a felony offense.  Specifically, Perez was charged with failing to report his conviction for battery and exposing himself to a child for a 1990 incident that took place in Wisconsin. He also failed to report his arrest in 2002 for aggravated assault. In addition, prosecutors charged Perez with two misdemeanor counts of perjury.

Ernesto Perez
Former President of Dade Medical College

Prior to this bump in the road, Perez was doing pretty well for himself.  He had twice  been appointed to the Florida Commission on Independent Education, the state agency charged with regulating for-profit colleges in Florida.  Last summer the South Florida Business Journal gave him an Ultimate Miami CEO Award for his "significant contributions to the local community." Not bad for a guy who dropped out of high school to join a heavy metal band.

Dade Medical College is a for-profit college with  2,000 enrolled students on five campuses. In 2012, the college received 87 percent of its revenues from federal aid--$33 million (according to a story in Huffington Post). The college attracts low-income Hispanics and African Americans who pay high tuition.  The vast majority of DMC students receive federal loans or Pell grants, and  25 percent of student borrowers default on their federal student loans within three years of beginning repayment.

Do Dade Medical College students receive good value for their tuition? Maybe not. The Florida Nursing Board put two of its campus nursing programs on probation this year due to low pass rates by DMC graduates on state licensing exams. One student who was interviewed by the Broward/Palm Beach/New Times said she had taken out $48,000 in federal student loans and yet she had professors who merely gave Powerpoint presentations or read from a book.

 Dade Medical College is a prime example of what's wrong with for-profit colleges in the United States.  Run by a high-school dropout and lavishly funded by the federal government, the college has high failure rates on nursing exams and high student-loan default rates.

Why is the federal government funding for-profit institutions like Dade Medical College? Maybe because the for-profit college industry is politically powerful.  Mr. Perez and his wife are big campaign contributors and have made contributions to Barack Obama, Mitt Romney, Harry Reid, and Marco Rubio. 

President Obama and Congress can talk all they want about quality controls on higher education. But the federal government is pumping billions of dollars a year into for-profit colleges and universities that prey on low-income students, provide poor quality education and have high student-loan default rates.  This is a huge scandal that our politicians refuse to address.

References

Patricia Born & Jay Weaver. Homestead mayor's ties to downtown redeveloper probed. Miami Herald, June 8, 2013. Accessible at: http://www.miamiherald.com/2013/06/08/v-fullstory/3441091/homestead-mayors-ties-to-downtown.html

Read more here: http://www.miamiherald.com/2013/06/08/v-fullstory/3441091/homestead-mayors-ties-to-downtown.html#storylink=cpy

Francisco Alvarado. Dade Medical College Has Powerful Friends but Struggling Students.  Broward/Palm Beach  New Times, August 29, 2013.  Accessible at: http://www.browardpalmbeach.com/2013-08-29/news/dade-medical-college-has-powerful-friends-but-struggling-students/

Dade Medical College.  Ernesto Perez to be Honored at SFBJ CEO Awards. 2013. Accessible at: http://www.dademedical.edu/rightnow/ernestoperezbehonoredsfbjceoawards

David Halperin. $33 Million Per Year of Your Tax Money to For-Profit College Whose CEO Hid Criminal Record. Huffington Post, October 21, 2013. Accessible at: http://www.huffingtonpost.com/davidhalperin/33-million-per-year-of-yo_b_4136451.html

Michael Vasquez. Amid criminal charges, CEO of Dade Medical College Resigns. Miami Herald, October 23, 2013. Accessible at: http://www.miamiherald.com/2013/10/23/3706821/ernesto-perez-resigns-as-head.html

 

Read more here: http://www.miamiherald.com/2013/10/23/3706821/ernesto-perez-resigns-as-head.html#storylink=cpy

 

Crocodile Tears for Overburdened Student-Loan Debtors: Congress or the Obama Administration Should Do Something Tangible to Help These People

A recent article in the New York Times (Lewin, 2012) reported on the plight of older Americans who took out loans to pay for their children’s college education.   About 2.2 million people who are 60 years old or older owe on student loans, and the total amount of their debt is $43 billion. According to experts cited in the Times, almost all of these loans were taken out by parents to pay for their children’s education.  Parent Plus loans, loans taken out by parents for their children’s college education, now represent about 10 percent of all the federal student loan money that is borrowed.

Crocodile tears for the overburdened
student-loan debtor

Senior debtors who are in arrears on student loans can see their Social Security checks garnished.  So far this year, the federal government has garnished the Social Security checks of 119,000 people (as reported in the Times).  

President Obama and Governor Romney talked some about the federal student-loan crisis during the presidential campaign. President Obama made much of the fact that he pushed through the direct lending program for college students.  But neither President Obama nor Governor Romney offered any significant relief for the millions of people who are drowning in student-loan debt.  In my opinion, both men cried crocodile tears—expressing empathy and sympathy while proposing nothing that would give these sufferers some relief.

What can be done to help these poor people?

Proposal Number One. Congress should pass a law protecting people’s Social Security checks from garnishment for delinquent student loans. If Congress won’t do this, President Obama should stop the garnishment of Social Security checks by Executive Order, much the same way that he implemented the Dream Act, which Congress refused to pass.

Proposal Number Two. Overburdened student-loan debtors—including parents who went into debt to finance their children’s education—should have the same access to bankruptcy relief that is available to any other debtor who has unsecured loans.   Scholars have argued for this change in the Bankruptcy Code for many years.

Proposal Number Three. We’ve got to kick the for-profit colleges out of the federal student loan program.  The for-profit sector has the highest student-loan default rates, and many of them have engaged in unfair recruiting practices to attract students. Not all for-profit colleges are bad eggs, but there are enough problems in this sector to justify removing them from the federal student-loan program.

Our politicians can cry crocodile tears about the suffering being experienced by student-loan debtors who are unable to pay back their loans, but those tears won’t be genuine until the federal government in both the Executive and Legislative branches take tangible action to provide relief for student-loan debtors and their parents—and the action they need to take is painfully obvious.

References

Lewin, Tamar.(2012, November 11).  Child's Education, but Parents' Crushing Loans. New York Times.