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The Insanity of Student Loans

November 13, 2010 15 comments

OK, this is a thought experiment and I am feeling too lazy to dig up precise figures and references.

The average person who has attended a half decent university since the early 2000s has probably close to $ 50,000 (50 k) in debt- total. Whether this amount was accumulated over a degree, a degree and half or two is inconsequential.

So we have a person graduating in their mid 20s with close to 50 k in debt. Now let us assume that the person gets a job immediately. Unless you are doing something in demand, your salary range is about 20-30$/hr full-time.

20$/hr x 40 X 4 X 12 = 38,400/yr to 30/hr x 40 x 4 x 12 = 57, 600/yr.

Sounds good, doesn’t it? Not really!

3,200 – 4,800/ month (pre-taxes) might seem like a good income, but is it?

Let’s say your median person lives in a reasonably priced apartment, pays for common utilities, drives an average new car and is quite healthy. Even then close to half of the pre-tax amount (1600-2400/month) is used up by the basic costs of living in a typical north-american city. Now let us assume that this median person buys clothes, average things, eats well, goes out a bit, has a few unexpected expenses and takes a short vacation or two per year (1-2k package deals). How much money is left over?

My quick guess is- less than 500$/month. As many of you know- jobs are not as stable as they used to be, and there may be short periods of unemployment and/or moving to a new place. Let me cut to the point- given the current economic conditions and paradigms, it would take close to 10 years for the median university educated person to pay back the debts accumulated during education (assuming highly unrealistic best case scenarios).

We can safely assume this debt will delay family formation, buying a house, having kids etc. It might even make people unwilling to step in and fill demand in many life-cycle dependent industries (housing, child-care, schools etc).

Do you see where I am going? Student debt and lifestyle changes are going to kill aggregate demand, resulting in a deflationary spiral (even if the deflation is not monetary). This scenario will play out under the best of conditions, under our current economic assumptions and paradigms.

Now add in the demographic profile of western countries.

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How Dr. Strangelove would Sound in German

November 13, 2010 Leave a comment

Ever wondered how the famous monologue at the end of Dr. Strangelove would sound in German? You know the background story, right?

From the wikipedia article..

The title character, Dr. Strangelove, who was not in the original book, serves as President Muffley’s scientific advisor in the War Room, presumably making use of prior expertise as a Nazi physicist. When General Turgidson wonders aloud what kind of name “Strangelove” is, saying to Mr. Staines (Jack Creley) that it is not a Kraut name, Staines responds that Strangelove’s original German surname was “Merkwürdigeliebe,” without mentioning that “Merkwürdigeliebe” translates to “Strangelove” in English. Twice in the film, Strangelove accidentally addresses the President as “Mein Führer.”

The character is an amalgamation of RAND Corporation strategist Herman Kahn, mathematician and Manhattan Project principal John von Neumann, German rocket scientist Wernher von Braun and Edward Teller, the “father of the hydrogen bomb.”The wheelchair-using Strangelove furthers a Kubrick trope of the menacing, seated antagonist, first depicted in Lolita through the character “Dr. Zaempf.” Strangelove’s accent was influenced by that of Austrian-American photographer Weegee, who worked for Kubrick as a special photographic effects consultant.

Here is the clip. The monologue starts at 0.35, right after Slim Pickens (Major Kong) rides the bomb and James Earl Jones wonders about the whereabouts of Major Kong.

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NSFW Links: Nov 13, 2010

November 13, 2010 Leave a comment
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