Gordon Campbell on government complacency, and Mother Teresa

Housing crisis, what housing crisis. The inquiry into homelessness? Yawn. That didn’t tell John Key anything he didn’t already know.

By now, we shouldn’t be surprised by the Beehive’s disinterest in the country’s social problems. You can track for days, months, years across the tundra of its policy agenda and never see a plan or visible trace of a robust fresh idea about anything. Even its boldest moves – the big tax cut package of 2010, and the selling down of state assets in its second term – involved giving away wealth it had inherited, from the efforts of others. Just like those socialists it claims to abhor.

Finally now, everyone has got sick of waiting for the Key government to do something about student debt. A month ago, Labour suggested wiping student debt in return for putting graduates to work within a bonded scheme of public service out in the regions.

The Labour leader [Andrew Little] has revealed it is considering wiping existing student debt for those who take public service jobs in the regions.

“I don’t have any particular promise to make. We’re looking at ways that we can assist students to effectively write off at least a part of that student debt, through things like taking a public service job somewhere outside of one of the main centres and for the length of period that you’re there let’s look at a write-off sort of regime.”

At its annual conference on the weekend, New Zealand First unveiled a not dissimilar student debt response, which would substitute a ‘skills debt” for the monies owed:

NZ First’s education spokesperson Tracey Martin said for every year a student stayed in New Zealand and worked after finishing their studies, one year would be deducted from their debt. People working in some fields – such as doctors, teachers, or police – could work off their skills debt at a faster rate.

For students who leave New Zealand and did not return, their skills debt would be turned into a financial debt. Significant variances in course costs and graduate wages can see some of our most important members of society such as nurses and teachers left with the burden of debt for longer. This policy treats all graduates as equal. One year’s study equals one year of skills commitment,” she said. “If implemented, this policy would be a game changer for students”.

Typically, Tertiary Education Minister Steven Joyce has called this approach “unaffordable” and said that the government has other, more pressing things to spend the money on. (Such as new gear for Defence, or another handout to charter schools.) What both the Labour and NZ First proposals implicitly recognise is that a simple student debt write-off isn’t politically sellable. Instead, they’re offering a work requirement whereby the country gains some added benefits, in return. That approach could well be embraced, even by voters who have already struggled to repay their own student debt.

Since 2010, the Obama administration has also been grappling with the crippling social (and economic) consequences of US student debt. Unlike Joyce, Obama hasn’t chosen to remain in denial about the way these debts impede people from saving for retirement, depress consumer purchasing, and delay people from starting families – to name just a few negative effects of the student debt mountain. The US responses have included the initiatives being taken by some firms (such as Pricewaterhousecoopers) to help pay off student debt, as a perk to lure graduates in a way comparable say, to paid parental leave provisions.

Starting in July 2016, accounting and consulting firm PricewaterhouseCoopers [are offering] some employees a practical perk: $US1,200 a year for up to six years toward their student debt. The benefit will be available to those with associate and senior associate titles, entry level positions that make up 45 percent of PwC’s 46,000-person U.S. workforce.

Considering that 71 percent of [US] graduates come out of school with an average debt burden of $US35,000, it’s not surprising that young hires yearn to repay student loans. A recent survey by Iontuition found that 80 percent of 1,000 people surveyed wanted to work for a company that offered student loan repayment assistance. Yet few businesses do this. Many organizations offer tuition assistance, but only about 3 percent have student loan repayment programs, according to a 2015 survey by the Society for Human Resources Management. The move, PwC hopes, will help with recruiting

At the same time, the White House has been working (in unison with business, and sometimes off its own bat) to offer business tax breaks in return for helping graduates to pay off their education-related debts. (This is entirely consistent with the old fashioned notion that education is actually a social and economic good, as well as being a private good.) Also, the repayment schemes being pursued in Australia in particular, are more sensibly (and more generously) tied to earned income levels than the system followed in New Zealand.

Here, repayment levels/ interest on loans kick in once the graduate exceeds an (extremely low) income threshold of only $NZ19,080. In Australia, no student debt repayments are required until graduates are earning more than $A54,869.

The US student debt repayment system is not particularly generous, but it currently includes a mandatory income threshold pitched at 150% above the poverty line, with repayments then set at a maximum 10% of the income earned above that figure:

Borrowers choosing the income-based repayment plan will pay no more than 10 percent of their income above a basic living allowance, reduced from 15 percent under current law. The basic living allowance varies with family size and is set at 150 percent of the poverty line, currently equalling about $16,500 for a single individual, and $33,000 for a family of four.

o More than 1 million borrowers would be eligible to reduce their monthly payments.

o The payment will be reduced by more than $110 per month for a single borrower who earns $30,000 a year and owes $20,000 in college loans, based on 2009 figures.

Finally, the Obama provisions indicate that the US is also willing to run out the clock on debt obligations:

Borrowers who take responsibility for their loans and make their monthly payments will see their remaining balance forgiven after 20 years of payments, reduced from 25 years in current law.

Here’s a detailed outline of the Obama Student Loan Forgiveness Program.

Only last week, Bloomberg News ran this story on how the Obama repayment scheme has been faring.

Yes, the leniency has encouraged some backsliding in repayments. But the ‘living in denial’ approach being taken here is not a viable option, either. Currently, student debt is a $15 billion weight on the normal life options of a generation, their household consumption, and their retirement savings. If only Steven Joyce was running the economy in a way that generated sufficient numbers of high paying jobs… then perhaps the government’s determined pursuit of debt repayments would seem less predatory. Only then perhaps, would Joyce’s complacency be tolerable. Unfortunately, this government has turned its “let them eat cake” approach into an art form, across a whole range of social issues.

Mother Teresa, meet Abdul Sattar Edhi

So Mother Teresa is now officially a saint. Sainthood has long been a flashpoint between the faithful’s need for spiritual champions, and the command & control impulses of the Church hierarchy. For the past 1600 years at least, Rome has regularly expressed its concerns about how an unregulated market in saint-making could easily (a) promote de-centralized interpretations of doctrine aka heresy and (b) divert the revenue that the business of sanctity happily brings in its wake.

In the Middle Ages, bishops were understandably reluctant to surrender their power to create local saint cults, given the income streams that flowed from pilgrimages to saintly shrines, and from the related trade in saintly relics. The takeover by the church hierarchy began as late as 993AD, when the first papal canonization took place, nearly a thousand years after Christ. Rome soon got the hang of it, though. Too much so, in fact. By the time of the Reformation, papal ‘saint selling’ was widely seen as being bad for the brand.

All that has changed now. Over the past 50 years, saint-making has reverted to its pre-Reformation roots, as a means of motivating the local co9mmunities of the faithful. Reportedly, Mother Teresa of Kolkata is the 640th saint canonised since 1963, a symptom of the huge increase in saints being churned out by modern popes. (In the previous 375 years, only 218 saints had been canonised.)

Mother Teresa did have/still has her critics. Her admirers have praised her care for the poor and the destitute. Her critics have recoiled from her keen interest in harvesting the souls of those on the brink of the beyond, and from her related disinterest in addressing the causes of a poverty that provided her with such sterling opportunities for conversion. Her harsh opposition to contraception and abortion also tended to polarise public opinion, in Kolkata and beyond.

Here’s another option. In the West, there has been very little fanfare at all over the death in July of her Pakistani equivalent, Abdul Sattar Edhi. In my opinion, one very big plus mark about Edhi is that he left out the harvesting of souls part, entirely. Instead, Edhi devoted his life to the needs of the poor for entirely secular reasons.

In a country increasingly riven by extremism, Abdul Sattar Edhi, the founder of a vast public welfare organisation that spans Pakistan, was a symbol of the country’s shrivelled secular tradition. Edhi, who has died aged around 90, never turned anyone away from his hospitals, homeless shelters, rehab centres and orphanages. His determination to ignore considerations of creed, cast or sect earned him the hatred of some on the country’s religious right, who accused him of being an atheist. But the public revered him for his lifelong commitment to humanity……

“I have never been a very religious person,” he told the Daily Times newspaper in 2009. “I am neither against religion nor for it.” He found inspiration in socialist writers who lambasted the ruling capitalist class whom he thought were responsible for poverty in the world. And he did not see why work to alleviate suffering should be restricted to Pakistan. In 2005 the Edhi Foundation donated $100,000 to the victims of Hurricane Katrina in the US. “My religion is serving humanity and I believe that all the religions of the world have their basis in humanity,” he said.

Now, there’s a saint.

Joan Shelley, At Last

Sometimes, there can be a thin line between pretty and boring, and the Louisville, Kentucky folk musician Joan Shelley has struggled at times to put her exceptional, full-bodied voice to good use. Yet she manages it on her new single “Cost Of The Cold.” This is a quietly pulsing hymn about the links between the changes in the physical environment and in her own personal landscape. Fire may burn but it keeps you warm, and there’s a cost to be paid in remaining safe, and cold. Sensitive guitar work by Nathan Salzburg, and a good video, too.

6 Comments on Gordon Campbell on government complacency, and Mother Teresa

  1. Forcing the younger generation to take “public service complacency” jobs that do nothing but hold the dysfunctional auto matronic system in place?
    Little is misinformed about loans and debt and or is still dealing in the govt system of getting people into debt slavery.
    “Today, local banks do not actually lend out lawful money, but instead lend out notes or checks that are backed by a promise to pay. Before lending out these notes or checks, the borrower has to sign documents that have terms and conditions written on them along with a price tag (the amount of money the borrower agrees to pay back).

    A more specific name for these documents is “negotiable contracts”, “loan agreements”, or “promissory notes”. After you sign a “loan” agreement (contract) with a bank, it legally binds you to the terms and conditions of that agreement.

    What banks do not tell you is that when you sign a loan agreement or promissory note, you give value to that note for the reason that it is backed by your promise to pay. One thing you need to know about a valid agreement (contract) is that it is a mutual agreement. A mutual agreement can not be truly valid without full disclosure.

    Today, nearly all bank loan agreements are not truly mutual agreements, because they do not come with full disclosure. In other words, they are fraudulent agreements, and therefore have no legal or lawful standing. Another reason why they are fraudulent is because the money that banks give to you as a “loan” is created out of thin air.

    After you are approved for a bank loan (e.g., mortgage), the bank requires you to sign a promissory note. After signing it, the bank, not referring to a central bank, deposits your promissory note into its account as money, which is actually your money, and then uses your promissory note to exchange for credits in your transaction account, and thereby creating new money. In other words, YOU are the CREDITOR, not the debtor and therefore the bank does not loan you anything. …

    What the bank did is FRAUD because it lend you your own money. By lending you your own money, the bank makes 100 percent profit every time you pay your monthly payment. If you add the interest (rent) into the equation, the bank makes more than 100 percent profit. This is how banks steal your money without your knowledge. If you and I were to do this, they would throw us in jail for a very long time.”

  2. Yes the Crown NZ govt if it wanted to do the right thing would wipe out all the student loan debt.
    But the NZ govt actually create poverty and inequality( as in the case of the profiting off, taking of student loan even when a person is still in economic hardship). The govt wants its next generation of debt slaves to be “bonded” into a life of corporate complacency.

  3. I wrote to Labour a few months ago about student debt. After discussing the history and unworkability of the scheme, this was my suggestion:

    1) The Labour party should make it known to the public that much of this debt will never, ever be repaid. It will continue to accumulate interest at usurious rates, and build up into a totally absurd mountain that could well cause major economic dislocation. Although Treasury might not publicly admit this, I bet you get their agreement that this is true. It’s interesting that until a couple of years ago, this debt was treated at an asset by the Treasury, much as a bank would treat a loan or mortgage, but they quietly dropped this “asset” from their books, a tacit acknowledgment that much of this debt is non-recoverable. It is vitally important the public get to understand this, much as I stated above – they can choke on their coffee or splutter on their beer but this money is gone.

    2) The biggest problem is of course that these debts accumulate interest at what I would call usurious rates. Presently 5.3% when the Reserve Banks rate is 2.5% . 5.3% is a healthy, commercial return on a loan which is actually forced on young people if they wish to get a tertiary qualification. To compare student loans with private bank loans taken on for all sort of other reasons is patently ridiculous, though many commenting in the NZ Herald did exactly this. For many years interest rates were 8.0% and above. With added penalty interest rates taking interest up to near 10%, you’re getting to the stage when a outstanding loan could double within just 8 years, quadruple within 16-20 years.

    3) To just write off the debt would be unfair to those who have paid their loans and interest back. However, I would point out that the National Government’s “leaky building” crisis has cost this country at least $13 billion, an amount almost sufficient in itself to have wiped out this debt. So if National start lambasting you about all this, a quiet reminder of their own incompetence might be in order?

    4) There needs to be a Student Loan Repayment Office set up to supervise this. I expect the cost to substantial, $20 million plus. They will need to liaise with every student, and also learn any home or social situations that might make repayment very difficult. They can be given the information that the IRD already has to start with.

    4) All student loans from the beginning of the scheme to be recalculated at an entirely nominal rate of interest say 1% although this isn’t totally necessary, we could recalculate at zero%. This would substantially reduce outstanding payments, perhaps the total loan outstanding of $15 billion might nearly be halved at a stroke, but that’s a complete guess. All penalty charges should also be cancelled.

    5) All students who have repaid their loans should have their nominal loan interest amount subtracted from the actual total amount of interest they paid. The difference will be refunded at 10% per annum in income tax rebates. This makes sure that those that have repaid are treated fairly.

    6) All students with their now substantially lessened loan outstanding then should be offered this – if they pay of at least 7.5% of the principle outstanding on an annual basis (not of the decreasing amount though) then they will continue to pay zero interest on the outstanding amount and their debt will be paid off within 15 years. Of course there’s nothing to stop debtors paying more than this amount, if their own financial situation allows it.

    7) It may take a couple of years to contact the bulk of the students to organise this.

    8) If those with outstanding debts don’t cooperate then the government may be forced to take some sort of sanction against the worst culprits. However I don’t believe this should be criminal action; as I mentioned above, making debtors into criminals is pointless and positively Dickensian. The remedies would have to be in the civil courts or through taxation and agreements with other countries. I don’t know how this would work but some discussion could be had by those that might have rather more legal expertise than me. There should be enough resources to investigate individual circumstances, some may never be in a position to pay much and it would be futile to continue the effort to get financial blood from the stony-broke.

    9) You promise the country that you will never again allow such a reprehensible scheme to be re-introduced.

  4. Current social policy may be a wasteland, but under this government it is a good-looking wasteland: colourful websites, jigsaw graphics and actual policies that are cunningly disguised as A4-sized candy-bar wrappers. Remarkably like those old Soviet posters of happy farmers and shiny tractors in fact. The government might not be doing anything to help ordinary New Zealanders but they’re not shy about spending our money telling us about it.

  5. All the student loan debt can and should be written off.
    How simple and easy it would be.
    Without bonding the next generation into a life of “corporate complacency”

  6. @ Monro, What draconian bankster bollocks!
    The last thing this pathological “social contract breaching” govt needs is more bureaucracy.
    Did you forgot the student loans contracts were for a ” no interest” loan not an interest bearing one, so its “void contact” coupled with a fraud, making the students create the money for the govt universities then also profiting off the interest on a “no interest” loan.
    Is anyone holding the govt up in Court for the sake of the next generation? No as all the solicitors are either a)fools or and b)govt stooges.

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