I devote an entire department to the fiat money Greenback lawyer Ellen Brown. She doesn’t understand economics. She also doesn’t understand historical documentation. I proved this in 2010. You can read the proof here.
Incredibly, people who regard themselves as conservatives cite her as an authority. In the case of Max Kaiser, he actually brings her on his show. He has been doing this for a decade.
GOVERNMENT-FUNDED HIGHER EDUCATION
She is a big promoter of government-subsidized higher education. She thinks higher education should be free of charge to the masses.
She does not believe in personal debt for higher education. She regards all debt as slavery. As a Greenbacker, she believes that debt is unnecessary. The federal government can simply issue pieces of paper with Presidents’ pictures on them. It can subsidize the voters. Therefore, nobody has to go into debt. Ever. This has been the Greenback party line ever since the 1880’s. (There actually was a Greenback Party in the 1880’s.)
To persuade readers of this, she begins with a quotation. As is the case with so many of her quotations, it is bogus. You can find it only on Greenback sites. You cannot find any reference to this document in a collection of documents published by a professional historian. She cannot cite it from anything like an official collection of documents. So, she hedges her language. She uses the weasel word, “reportedly.”
The advantages of slavery by debt over “chattel” slavery—ownership of humans as a property right—were set out in an infamous document called the Hazard Circular, reportedly circulated by British banking interests among their American banking counterparts during the American Civil War. It read in part:
Slavery is likely to be abolished by the war power and chattel slavery destroyed. This, I and my European friends are glad of, for slavery is but the owning of labor and carries with it the care of the laborers, while the European plan, led by England, is that capital shall control labor by controlling wages.
She posted a link to a book published in 1895 by somebody nobody had ever heard of. This is standard in her approach to historical documentation. If you want more evidence for my statement, go here.
Then she gets to her main point: student debt for higher education.
Unlike mortgage debt, student debt must be paid. Students cannot just turn in their diplomas and walk away, as homeowners can with their keys. Wages, unemployment benefits, tax refunds and even Social Security checks can be tapped to ensure repayment. In 1998, Sallie Mae (the Student Loan Marketing Association) was privatized, and Congress removed the dischargeability of federal student debt in bankruptcy, absent exceptional circumstances. In 2005, this lender protection was extended to private student loans. Because lenders know that their debts cannot be discharged, they have little incentive to consider a student borrower’s ability to repay. Most students are granted a nearly unlimited line of credit. This, in turn, has led to skyrocketing tuition rates—because universities know the money is available to pay them—and that has created the need for students to borrow even more.
All this is true. This is because Congress intervened to single out student debt as the only form of debt not subject to the bankruptcy laws. Debt was increased under President Clinton. The revision of the bankruptcy law was done under President George W. Bush. But skyrocketing tuition rates began a generation ago. Federal loans were part of the reason. There is nothing new about this. This is the inevitable result of government intervention into the free market.
She is also correct about the following.
Students take on a huge debt load with the promise that their degrees will be the doorway to jobs that allow them to pay it back, but for many the jobs are not there or are not sufficient to meet expenses. Nearly one-third of borrowers today have made no headway in paying down their loans five years after leaving school, although many of these borrowers are not in default. They make payments month after month consisting only of interest, while continuing to owe the full amount they borrowed. This can mean a lifetime of tribute to the lenders if the loan is never paid off, a classic form of debt peonage to the lender class.
There have been thousands of articles in the media about this foolishness, but exposure has not changed much of anything. Parents still approve. Students take on this debt. Fact: we cannot protect stupid people against making stupid decisions. This is a fundamental teaching of free market economics.
The fact that a student can earn a bachelor’s degree from an accredited distance-learning college or university for under $15,000 should be obvious to every student and every parent, but even among parents and students who know about this, they pay no attention. I speak from experience. Over 125,000 people have viewed my 2006 video on this, but I have received only one letter from a student who said that he took advantage of my advice. Parents just don’t care. They prefer to spend tens of thousands of after-tax dollars on low-return liberal arts degrees for their kids. Other parents encourage their kids to take on $100,000 of debt. Stupidity is as stupidity does.
What is Brown’s recommended solution? Massive printing of paper money by Congress in order to finance free college education for everyone.