Here Comes The Student Loan Bailout | Zero Hedge

2012 is the year the student loan bubble finally popped. While on one hand the relentlessly rising total Federal student debt crossed $956 billion as of September 30, and was growing at a pace that will have put it over $1 trillion by the end of 2012, the one data point confirming the size, severity and ultimately bursting of this latest debt bubble was the disclosure in late November by the Fed that the percentage of 90+ day delinquent loans soared from under 9% to 11% in one quarter.

Which is why we were not surprised to learn that the Federal government has now delivered yet another bailout program: this time focusing not on banks, or homeowners who bought McMansions and decided to not pay their mortgage, but on those millions of Americans, aged 18 to 80, that are drowning in student debt - debt, incidentally, which has been used to pay for drugs, motorcycles, games, tattoos, not to mention countless iProducts. Which also means that since there is no free lunch, all that will happen is that even more Federal Debt will be tacked on to replace discharged student debt loans, up to the total $1 trillion which will promptly soar far higher as more Americans take advantage of this latest government handout. But when the US will already have $22 trillion in debt this time in four years, who really is counting? After all, "it is only fair" that the taxpayer funded "free for all" bonanza must go on.

The latest debt bailout, not surprisingly is not titled "Yet another taxpayer funded bailout for those who bought things they can't afford on credit" as that would not be very politically prudent, especially for those politicians who still have taxpaying citizens as their voters. Instead, its name is the much more PC: "Pay as You Earn Repayment Plan." Alas, it really should be called the former, because what it does is it incentivizes Americans to borrow even more Federal student loans, well aware that there will now always be a cap on the associated monthly interest payment which will never leave a mark regardless what the full underlying loan notional is. It also provides for full debt discharge should the borrowers end up with cushy Federal jobs - because the one thing the US government needs afford is more debt-saddled government workers.

What is the "Pay as You Earn Repayment Plan"? The WSJ explains:

A new federal program should make it easier for some recent college graduates to keep their student-loan payments manageable.

The new option, known as the "Pay as You Earn Repayment Plan," lets eligible borrowers sharply lower their monthly loan payments and qualify for loan forgiveness quicker than they might otherwise.

"It's a very good safety net for students who borrow too much," says Mark Kantrowitz, publisher of the financial-aid site FinAid.org. "If your debt exceeds your annual income, you will probably benefit."

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Pay as You Earn, which took effect on Dec. 21, "is designed to help offset the effects of the recession for student borrowers most likely to take a hit in this tough job market," says Lauren Asher, president of the Institute for College Access and Success, which has pushed for the creation of income-based repayment plans.

Which in the New Normal, means everyone with a student loan will benefit. It also means, that courtesy of knowing this safety net is there, more and more people will take advantage of the government's latest generosity with other taxpayer's money.

What are the terms of this new bailout?

The new program comes at a time when rising student-loan balances?amid a still shaky job market?have weighed heavily on many families.

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Typically, federal student loans must be repaid within 10 years. At current interest rates, that can work out to a monthly payment of roughly $300 for a borrower with $26,000 in debt.

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Pay as You Earn, by contrast, limits student-loan payments to 10% of "discretionary income" as defined by government formulas. Borrowers who make regular payments could have the remaining unpaid amounts forgiven after 20 years.

So much for student debt being non-dischargeable: borrow hundreds of thousands, but make your monthly payment of a hundred or so bucks, and in 20 years you will be debt free, courtesy of US taxpayers. Actually, scratch that: one doesn't even have to make a payment!

In some cases, borrowers with low incomes could be required to make a zero-dollar payment and would still be considered current on their loan. Monthly payments can increase or decrease each year based on the borrower's income and family size.

For those who think getting full debt forgiveness in 20 years is far too long, why there's a loophole for that too: just go "work" for Uncle Sam:

Borrowers with public-service jobs may qualify for loan forgiveness after just 10 years.

As for eligibility "constraints":

To be eligible for the program, borrowers must have taken out their first federal student loan after Sept. 30, 2007, and received at least one federal student loan after Sept. 30, 2011. Borrowers also must meet eligibility cutoffs based on the size of their debt, their discretionary income and family size.

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The U.S. Department of Education's Pay As You Earn calculator, available at studentaid.gov, can help you determine if you qualify. Borrowers can apply for the program online or by contacting the loan servicer that collects their payments on behalf of the federal government.

In other words, virtually all people who were responsible for the diagonal take off in the Federal student loan total in the current depression are now eligible for what will eventually be full debt discharge.

So let's get this straight:

1. go to some "everyone who applies is admitted" community college
2. take on the biggest Federal loan one can get
3. use the proceeds for everything besides the tuition (of course)
4. be unable to find a job after graduation (naturally)
5. plead poverty, accusing evil employers who don't hire those who majored in Foosball, and make "zero" payments while remaining in "compliance"
6. get a job working for the government, wait ten years, and have the entire loan magically disappear.

And there it is: incentives for the common, and very much broke, man in the New Normal.

If there is anyone out there who thinks this will not result in a "charge it" feeding frenzy and that the Federal student loan total will not go absolutely parabolic going forward, please raise your hand.

Of course, what is not discussed, is who is on the other side of all those forgiven loans. And the answer, dear taxpaying US readers, is starting at you in the mirror. Because all the Federal government will do is transfer the unfunded obligation, which has already been used to satisfy the purchase of goods and services, from one individual to the whole group.

But when one is dealing with the government of a country that is no longer even fit to be defined as "banana", what is adding one more trillion between already insolvent counterparties.

Finally, yes, this means the Fed just tacked on one more year of QE to its $1 trillion/year in US debt monetization, which also means the Fed's balance sheet will now also be used for to fund student loan forgiveness, among so many other things.

Insolvent students of the world, unite!

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Source: http://www.zerohedge.com/news/2013-01-05/here-comes-student-loan-bailout

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US economy adds 155K jobs; rate remains 7.8 pct.

In this Wednesday, Dec. 12 2012 photo, Taneshia Wright, of Manhattan, fills out a job application during a job fair in New York. Economists forecast that employers added 155,000 jobs in December, according to a survey by FactSet. That would be slightly higher than November's 148,000. The unemployment rate is projected to remain at 7.7 percent. (AP Photo/Mary Altaffer)

In this Wednesday, Dec. 12 2012 photo, Taneshia Wright, of Manhattan, fills out a job application during a job fair in New York. Economists forecast that employers added 155,000 jobs in December, according to a survey by FactSet. That would be slightly higher than November's 148,000. The unemployment rate is projected to remain at 7.7 percent. (AP Photo/Mary Altaffer)

FILE - In this Tuesday, Dec. 11, 2012 file photo, an advertisement in the classified section of the Boston Herald newspaper calls attention to possible employment opportunities in Walpole, Mass. A private survey shows U.S. businesses sharply increased hiring in December, helped by a surge of new construction jobs created to help rebuild from Superstorm Sandy. (AP Photo/Steven Senne, File)

WASHINGTON (AP) ? U.S. employers added 155,000 jobs in December, a steady gain that shows hiring held up during the tense negotiations to resolve the fiscal cliff.

The solid job growth wasn't enough to reduce the unemployment rate, which remained 7.8 percent last month, the Labor Department said Friday. The rate for November was revised up from an initially reported 7.7 percent.

Each January, the government updates the monthly unemployment rates for the previous five years. The rates for most months don't change.

The government said hiring was stronger in November than it first estimated. November's job increases were revised up 15,000 to 161,000. October's increase was nearly unchanged at 137,000.

The "gain is perhaps better than it looks given that firms were probably nervous about adding workers with the fiscal cliff looming," said Paul Ashworth, an economist at Capital Economics.

Even so, hiring hasn't been strong enough to quickly reduce still-high unemployment. The job gains for December almost exactly matched the average monthly pace for the past two years. Hiring has been steady but modest as the economy has grown slowly since the recession ended more than three years ago.

For 2012, employers added 1.84 million jobs, an average of 153,000 jobs a month, roughly matching the job totals for 2011.

Robust hiring in manufacturing and construction fueled the December job growth. Construction firms added 30,000, the most in 15 months. That increase likely reflected hiring needed to rebuild after Superstorm Sandy and also gains in home building that have contributed to a housing recovery.

Manufacturers added 25,000 jobs, the most in nine months.

Other higher-paying industries also added jobs. Professional and business services, which include positions in information technology, management and architecture, gained 19,000. Financial services added 9,000 and health care 55,000.

Lower-paying industry sectors were mixed. Restaurants and bars added 38,000 jobs. Retailers cut 11,300, a sign that the holiday shopping season might have been sluggish. But those cuts followed three months of strong gains.

All the job gains last month came from private employers. Governments shed 13,000 jobs, mostly in local school systems.

The stable hiring pace shows that employers didn't panic during the high-stakes talks between Congress and the White House over tax increases and spending cuts that weren't resolved until New Year's.

That's an encouraging sign for the coming months, because an even bigger federal budget showdown is looming. The government must increase its $16.4 trillion borrowing limit by around late February or risk defaulting on its debt. Republicans will likely demand deep spending cuts as the price of raising the debt limit.

Friday's report did point to some weakness in the job market. For example, the number of unemployed actually rose 164,000 to 12.2 million. Approximately 192,000 people entered the work force last month, but most of them didn't find jobs.

The unemployment numbers come from a government survey of households; the number of jobs added each month comes from a separate survey of businesses.

A broader category that includes not only the unemployed but also part-time workers who want full-time jobs and people who have given up looking for work was unchanged in December at 22.7 million.

Despite the still-modest job growth, the economy is showing signs of improvement. Layoffs are declining. And the number of people who sought unemployment aid in the past month is near a four-year low. Banks are lending a bit more freely.

The jobs report showed that hourly pay is staying slightly ahead of inflation. Hourly wages rose 7 cents to $23.73 last month, a 2.1 percent increase compared with a year earlier. Inflation rose 1.8 percent over the same period.

The once-depressed housing market is recovering. A measure of U.S. service firms' business activity expanded in December by the most in nearly a year. And Americans spent more in November. Consumer spending drives nearly 70 percent of economic growth.

Manufacturing is getting a boost from the best auto sales in five years. Car sales jumped 13 percent in 2012 to 14.5 million. And Americans spent more at the tail end of the holiday shopping season, boosting overall sales that had slumped earlier in the crucial two-month period.

"There is little doubt that the seeds of faster growth are being planted," James Marple, an economist at TD Bank, said in a note to clients.

But most economists expect little improvement in hiring this year. A 2 percentage point cut in the Social Security tax expired Jan. 1. That means a household with income of about $50,000 will have about $1,000 less to spend. And the government will may impose spending cuts this year.

Both the higher taxes and spending cuts, along with uncertainty about future budget fights, could restrain growth and hiring.

That "likely means acceleration in the labor market will remain elusive for the time being," said Ellen Zentner, an economist at Nomura Securities.

Don Brown, chief executive of Arteriocyte, a medical device maker, plans to hire more people this year. But he is worried about potential cuts in government spending that could cut into his Cleveland-based company's revenue.

One such cut is a 2 percent reduction to the reimbursements Medicare provides to doctors and hospitals. It was delayed temporarily as part of the agreement this week. If that cut is implemented later this year, it would lower revenue for the hospitals and surgeons that buy his company's advanced products.

"Our entire customer base is unsure about what their reimbursement landscape is going to be," Brown said.

The Obama administration's health care reform also imposed a 2.2 percent sales tax on medical devices. Brown estimates that will cost the company $400,000. He had hoped that tax would be eliminated as part of the fiscal cliff talks.

Arteriocyte hired 10 new workers last year and now employs 76 people. The new hires included research scientists, two marketing specialists, and a sales representative. The company hopes to make five to 10 additional hires this year, but may not be able to do so if the Medicare cut occurs.

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Follow Chris Rugaber at http://Twitter.com/ChrisRugaber

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/3d281c11a96b4ad082fe88aa0db04305/Article_2013-01-04-Economy/id-bd6868c2030040519b914eb1557c40a1

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Spaceport wants protections from tourist lawsuits

ALBUQUERQUE, N.M. (AP) ? Spaceport America officials are urging legislators to limit potential lawsuits from wealthy outer space tourists who take off from New Mexico, saying such a bill is crucial to the future of the project.

Legal experts, however, say there is no way to know whether the so-called informed consent laws will offer any protection to spacecraft operators and suppliers in the event something goes wrong.

"Since this has never happened yet, we have no precedent," said Joanne Irene Gabrynowicz, director of the space law program at the University of Mississippi.

Such measures are being pushed by states trying to compete in the fledgling commercial space travel arena, and Spaceport America officials say that New Mexico risks losing out on a project that was intended to boost the economy in the mostly rural state.

They say New Mexico needs to pass a bill to retain anchor tenant Virgin Galactic and to recruit new space business to the state.

At issue is liability for passengers who pay to take spaceflights ? like those planned by Richard Branson's Virgin Galactic for $200,000 a head ? from the spaceport near the city of Truth or Consequences.

New Mexico lawmakers several years ago passed a bill that exempts Virgin Galactic from being sued by passengers in the event of an accident provided they have been informed of the risks. Officials have refused, however, to follow a handful of other states in expanding that exemption to suppliers.

Spaceport America Executive Director Christine Anderson has blamed New Mexico's refusal during the last two legislative sessions to expand the law as the reason the spaceport has been passed over by companies in favor of states such as Texas and Florida.

Virgin Galactic, meanwhile, has hinted it will leave New Mexico if an expansion isn't passed this year.

"I understand the impetus to try to match other states, but right now there is no guarantee it's enforceable," said Guigi Carminati with the Weil Law Firm in Houston. "That really is the bottom line."

She and Gabrynowicz said the only comparable laws cover adventure sports or amusement parks ? and their effectiveness varies.

If someone gets hurt on a roller coaster, for example, Gabrynowicz said, the operator generally is not exempt from liability just because a posted sign says passengers at their own risk.

Those "don't hold up" in court, she said.

She added that while there is "lot of case law regarding those kinds of activities. There is none yet for state law for space launches."

The effectiveness of laws protecting extreme and adventure sports operators is harder to know, said Carminati.

"Nobody has sat down and actually looked at the nitty gritty of what does immunizing legislation that works look like," she said.

There are also many questions, Gabrynowicz said, about whether federal law pre-empts state law in this area, whether state law would still apply if the accident happened over another state or country and whether it would cover passengers from countries that don't allow such exemptions.

Federal law exempts spacecraft operators from liability, requiring them to warn passengers in writing of associated risks.

Gabrynowicz said that states are now trying to create an even more advantageous position for operators "so they can promote the industry."

In New Mexico, the strong trial lawyer lobby has been successful in persuading the Democrat-controlled legislature against expanding the exemption.

Senate Majority Leader Michael Sanchez says he is hopeful an agreement can be reached this year, but he emphasizes "you always have to be careful about precluding someone from being able to file an action."

Despite the uncertainty, aerospace consultant Patti Grace Smith, a former FAA official responsible for regulating the U.S. commercial space transportation industry, says that since other states have extended the liability exemption to suppliers, New Mexico must do the same to remain competitive.

"The whole sector is an evolving sector," she said, noting the legal frameworks are needed "enable the industry to go forward in a positive way."

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Follow Jeri Clausing on Twitter at http://twitter.com/(hash)!/jericlausing

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/b2f0ca3a594644ee9e50a8ec4ce2d6de/Article_2013-01-04-Spaceport-Liability%20Legislation/id-2f6b1e6ab4d5480694f3d69937c29525

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Developer kickstarts fundraiser for unique Red Riding Hood game

Featured

7 days

Winda Benedetti , NBC News

The holiday shopping season is officially over?and that means the spasm of big game launches is over as well,?right? Well, no. In some ways,... Read more

1 hr.

Winda Benedetti , NBC News

The game developer behind the beloved Alice games -- "Alice" and "Alice: Madness Returns" --?is bringing his unique,?dark and twisted imagination to another famous story ...?and he's kicking off?a fundraising campaign so he can?bring it to gamers at large.

American McGee's latest project with his studio Spicy Horse Games is called "Akaneiro: Demon Hunter" -- a game that is not only based on the story of Little Red Riding Hood?but is inspired?by?Japanese ink, watercolor and woodblock illustration.

The free-to-play?action role-playing game?has been in development?since mid 2011 and has even?been in closed beta form, but?McGee took to crowdfunding site Kickstarter Friday to raise $200,000 to finish off the project.

"We've have managed to take Akaneiro way beyond what we thought originally possible," reads the Kickstarter?pitch. "That has been due to the passion and dedication of a relatively small development team. What's?been achieved both artistically and mechanically is fantastic? but it's just not enough to call the game complete, to satisfy our fans or ourselves."

PC and web versions of the game will go into open beta later this month. But the team says it needs the additional funds to make "Akaneiro" a fully cross platform game and is specifically shooting to create?Android and iOS tablet versions. The Kickstarter funding will also be used to create a co-op multiplayer mode, an equipment crafting system, more weapons and armor varieties and more narrative elements, among other things.

In the game, you play as a?recruit in the Order of Akane -- an order of?demon hunters who fight to maintain the balance between humanity and demons. So where does Red Riding Hood come in? Spicy Horse explains:

The Order was founded in Japan, 300 years prior to the events of the game, by the legendary demon hunter and martyr known as The Red Girl - or Akaneiro. Akaneiro was aided by her close companions, the Dark Huntsman and the the Forest Mother. Dubbed "The Three," together they exemplified the tenets and disciplines followed by the Order; maintain the balance between human and demon, light and shadow ? walk the shifting line between this world and the other.?

McGee and his crew have a talent for taking well-known stories and characters and then turning them on their heads, defying expectations and creating a new lore in the process. Check out InGame editor Todd Kenreck's review of "Alice: Madness Returns" above. McGee is also known for his episodic game series ?"American McGee's Grimm" based on the?Grimm's Fairy Tales. And earlier this year,?his Spicy Horse Games studio??launched "Crazy Fairies," bringing disturbed storybook creatures and characters to life.

Kickstarter has proven to be?a very productive way?for game makers in particular to raise the funds they need to complete unique projects outside the standard game publishing industry. And in just half a day, McGee and the crew at Spicy Horse Games have?already raised more than $11,000 from 271 backers for "Akaneiro."

Check out their Kickstarter?pitch to see the game in action and read more about how the funds would be used.

Winda Benedetti?writes about video?games for NBC?News. You can follow her tweets about games and other things?on Twitter?here?@WindaBenedetti?and you can?follow her?on?Google+.?Meanwhile, be sure to check?out the?IN-GAME?FACEBOOK PAGE?to discuss the day's?gaming news and reviews.

Source: http://www.nbcnews.com/technology/ingame/game-developer-kickstarts-fundraiser-twisted-take-red-riding-hood-1B7830434

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CDC: Women getting unneeded Paps post-hysterectomy

NEW YORK (AP) ? Many women don't need to be screened for cervical cancer after a hysterectomy, but a new study says most get the test anyway.

A government survey released Thursday shows about 60 percent of women with hysterectomies recently had a Pap test.

For years, experts have said there's no need to screen women who had a total hysterectomy for reasons other than cancer. A total hysterectomy removes the uterus and cervix.

The Centers for Disease Control and Prevention surveyed thousands of women ages 30 and older who had a hysterectomy. Those who recently had Pap tests fell from 73 percent in 2000 to 59 percent in 2010.

Experts say some tests may have been warranted, but the others were probably done because Paps have long been part of annual doctor visits.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/386c25518f464186bf7a2ac026580ce7/Article_2013-01-03-Hysterectomy-Pap%20Tests/id-68175af2d90e45ca803d86ccbcc26989

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Considering The Commercial Real Estate Market ... - Maynas Eric

In fact, there is often more potential for profit in commercial properties than in residential properties. It might be difficult to find the best deals. Use the following tips to better understand the market so you can find the right investment for you.

You must know how to deal with an emergency, should it arise. Inquire with your landlord about who handles the emergency repairs in the space you rent. Keep their numbers updated, and know how long it takes them to arrive on average. Use any information you can get from your landlord so contingencies are ready for the times your normal business operations are interrupted so you can safeguard your customer service and your reputation.

Plan on doing some improvements to your new commercial space before you can inhabit it. In some cases, these may be minor changes, such as a new coat of paint for the walls or a new arrangement of furniture. Some of these improvements may require the removal or addition of walls to create the appropriate floor plan. Before buying the property, see if you can get the former owner to pay for some of these costs. If you?re renting, the landlord might chip in.

TIP! Remember that size is everything when you are shopping for a permanent space for a growing business. You won?t have to upgrade in several years time if you invest in commercial property that will suit your needs now and as they grow.

Determine your business goals before you start your hunt for commercial property. List all of the features that are necessary for your operations, such as the overall size requirements for your rooms and amount of restrooms required.

Buy Property

Buy property that has more units. More units equal greater opportunity to earn more money. A lot of people who buy property do not even consider it unless it has at least ten units, the more units the more money.

TIP! If you plan to rent out a commercial property, you should do all you can to make sure they stay occupied. If you?ve got open spaces, then the person will end up paying for maintenance and upkeep.

There are many factors to consider as you view available properties. For example, you should take note of statistics regarding local employers, workforce availability and the accessibility of skilled labor. Properties located near major employers, like hospitals, schools or distribution centers, are often more in demand at every price range.

In order to determine whether or not the real estate broker you?re working with is right for you, discuss their definitions of successes and failures. Have them define what they consider to be a good result. You should be on board with their techniques and strategies. If you disagree with the real estate agent?s methods, continue looking for the right broker for you.

When financing for commercial real estate investments, you need to make sure that you have your financial statements on hand. Without proof of your and your business? financial stability, most banks will be hesitant to lend to you.

TIP! Whether buying or selling, negotiate. It is important that your concerns and opinions are heard and recognized by the other parties; you must always put forth the effort to ensure fair pricing for the commercial property.

If you are considering purchasing property, keep in mind that there is a very real threat that inflation is going to spike soon. One thing past leases had were clauses in them which based on Consumer Price Index protected the signers from inflation because there were adjustments in them. This protection is rarely available today, so signers are more less protected to losses due to inflation.

Usable Square Footage

Make sure you understand how much space is really available. In commercial real estate, square footage can be reported in usable square footage only, or the total square footage which would include walls and unusable space as well. The best strategy is to ask for both figures, to ask for the square footage and the usable square footage.

TIP! Before placing an offer on any commercial property, first find a lender. Discuss the situation with your loved ones as well as other investors, and create a list of good lenders available to you.

After reading the article above, you should know the basics of making a good investment. Maintain flexibility and think fast so you can steer your way through the constantly changing market of commercial real estate. This will help you find the good opportunities, and make the most out of your time, efforts and investments.

Source: http://www.maynaseric.com/considering-the-commercial-real-estate-market-follow-these-tips-3

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Weird News: Man Leaves His Baby At A Strip Club | YourTango

Don't forget your baby!

Turns out, clerks at joint liquor store-strip clubs aren't babysitters.

Stop worrying that your husband is hanging out at the strip club ? what about your baby?

Kenneth Rowe stumbled into Shark Lounge liquor store in Daytona Beach and asked an employee to watch his 11-month-old while he went to the store's gentleman's club. (How convenient!)

More from YourTango: Women In India Want Guns For Protection

After noticing the baby was hungry and had a rash on his face, the clerk called police and reported the incident.

Needless to say, Rowe rang in the new year behind bars.

Read more about the story and watch the news report at Huffington Post Weird News:?Kenneth Rowe Left Baby At Strip Club Liquor Store In Daytona Beach, Cops Say

More from Huffington Post Weird News:

Source: http://www.yourtango.com/2013169809/weird-news-man-leaves-his-baby-strip-club

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