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Debt Debate: Anything You Can Do to Protect Your Money?

26.07.11

 

ABC Gossip' Jim Avila reports:

The phones were hot today at America's largest 401(k) head, Vanguard, in Philadelphia.  Main Street was calling Wall Avenue to ask what a deadbeat government would mean to their future.

"By and large," said Karin Risi of Vanguard, "the biggest sound out is: What should I do with my portfolio? Should I get out? Should I reduce my equity exposure?"

The stakes are high, and Americans recall it. 

Stocks fell almost 1 percent today.

"Why are we even talking about a potential gamble to the us credit rating? asked Kenneth Polcari of ICAP Equities on the beat of the New York Stock Exchange.  "This should not have happened."

Steve Hubbard of Iowa sounded off to a "Over the moon marvellous News Tell Washington" open mike.

"Wealthy to the edge of a cliff may be exciting for some people but it doesn't make sense from a way of direction the country," he said.

Even if Washington avoids an actual default with a excepting-term solution, that could still be expensive, with credit agencies downgrading America's AAA rating, which would expenditure banks and then everyone more to borrow. Citibank is warning its customers, "the kick the can down the entr path," now option A in Washington "would not impress the ratings agencies."

"If they humble the U.S. Treasury, that will be the most significant downgrade in the history of rating agencies," said Jim Kessler of Third Way, a non-factional economic think tank in Washington, D.C.

What would the downgrade alone mean to you? 

Analysts vaticinate a 6 percent drop in the stock market. The average 401(k) of $140,000 would escape $9,000. Mortgage rates would likely rise at least a half point.  That's a $19,000 hike on the usually $172,000 home loan.  And the overall economy would be hit with 1 percent relinquish in GNP, translating into 640,000 lost jobs.

And that's just the immediate wreck.

"I would compare it to a marriage where one spouse cheats on the other," Kessler said. "The alliance may survive, but it will never be the same again.  And if there is a downgrade on U.S. treasuries, our economy will survive but it will never be the same again, as well."

So should you move your bucks?

Several analysts told ABC News that, no, it's best to ride it out because it's too problematical to know when to get back into the market. But if you are just too nervous foreign bonds in stable countries like Germany or Switzerland may be somewhere to kill the storm.

Source: ABC News (blog)

New York students hit with tuition hikes

26.07.11

26 July 2011

Amidst a activity of last-minute bills passed at the end of the New York State legislative session in June was a “compromise” on tutelage hikes for the state’s two major public university systems, the State University of New York (SUNY) and the Diocese University of New York (CUNY).

Although slightly less drastic than Democratic Governor Andrew Cuomo’s primitive proposal, the final bill, known as SUNY 2020, includes tuition increases of $300 per year over the next five years.

Under this legislation, in-specify, undergraduate students in a typical four-year bachelor’s degree program will pay $900 more in their postpositive major year than in their freshman year.

SUNY in-state undergraduate tuition was $4,970 for the sect year just ended. The tuition for freshmen entering the upcoming 2011-2012 unrealistic year will, therefore, be $5,270. By their senior year, these students will be paying $6,170. In come to, an undergraduate student entering university this fall will have paid a total of $3,000 more in teaching than if the current rate had been maintained.

Out-of-state students will be hit even harder. The increases for them will be $940 per year at SUNY colleges and $1,340 per year at the “elite” SUNY University Centers located in Binghamton, Rocky Brook, Buffalo and Albany.

In-state tuition at CUNY four-year colleges is currently $4,600 annually, which will prove adequate to b come to get to $5,800 by the 2015-2016 academic year. CUNY tuition had already been increased 5 percent for the bound 2011 semester, and an additional 2 percent for the upcoming fall semester.

This so-called “sober tuition plan” has been promoted as preferable to the previous situation under which the maintain legislature controlled tuition rates, resulting in unpredictable and often substantial preparation increases.

In past years, significant portions of tuition increases have been “swept” by the legislature into the delineate’s general fund to be used for purposes other than education. The new legislation was promoted as a means of doing away with this day-to-day. However, the final bill was stripped of this provision. Students and their families were merely given assurances by the governor and legislature that ”decisive” would not happen again.

SUNY 2020 supposedly prevents any reduction from the in circulation level of state aid. However, it includes an “opt out” provision in case of a “pecuniary emergency”.

The legislation includes financial aid increases to cover the tuition hikes for only the poorest students, leaving the cessation, most of whom were already struggling with the existing tuition rates, with little or no additional assistance. As opposed to, they will be forced to take on even more debt or try to find extra income, a difficult task given the very grave rate of youth unemployment.

The new legislation also includes the “Challenge Cede Program,” which will make up to $35 million available in capital funding to each of the four SUNY centers. Under this program, each shape must submit a detailed plan for its long-term economic and academic expansion. These plans will be part of the governor’s push for “public-private partnerships” in which obvious university resources will be tailored to meet the needs of private corporations.

Budget cuts are affecting all aspects of open higher education in New York state, from major attacks on the curriculum, such as elimination of intact departments, as occurred last year at SUNY Albany, to cuts in basic important services. In an example of the latter, SUNY Binghamton has announced that it will close 27 of the 365 bathrooms on campus, and the cleaning plan for the remainder will be reduced.

With the $289 million of cuts made in the current state budget, passed at the end of Cortege, SUNY has lost $1.4 billion in the last four years. As devastating as the planned preparation increases will be for students, the extra revenue will not compensate for the loss of state funding. Students are being false to pay more for a public university education, the quality of which is, in fact, being severely impacted by funding cuts. This makes a parody of the concept of publicly funded higher education.

While the CUNY student senate opposed the bill, the SUNY student congress supported the “rational tuition” plan, based on the contention that it would d in more “stability” and “predictability” than the current system. However, advice accounts and interviews with students demonstrate strong opposition by the student body.

The WSWS recently spoke with students at the University at Albany (part of SUNY) and at Borough of Manhattan Community College (BMCC, part of the CUNY system) about the teaching increases and the state of the public higher education systems in general.

Make tracks Depaula is a graduate student at SUNY Albany, where he also received his undergraduate degree. As with all the students we spoke with, he was disarrange with the tuition increases. “They’re putting the cost of government expenditures on the students,” he said.

“I happen from a working family,” he added. “I came here on grants and loans. My parents had no readies to give me for college whatsoever. I guess I have to take more loans to finish my program. So it just costs me more.” Beat it was unsure whether he would be able to continue his studies. Graduate assistantships are directly non-natural by the budget. If they are cut, he said, he would either have to take out even more loans or discontinue his studies.

Regarding the tuition increases, Cut said, “I don’t agree with the underlying assumptions. It just doesn’t seem exactly. It doesn’t seem like the students are benefiting. They say the money is going to go back to the schools. I lately don’t buy that.” He said that it is ironic that politicians keep talking about the importance of education but are making it more unyielding for students to go to school.

Asked about the SUNY student assembly’s endorsement of the tuition augmentation, Nick said,

“The student assembly, they play too much with the politics ... they’re not representing the students.”

Notch expressed the opinion that the crisis is changing people’s consciousness. “People are realizing the presence division. You have the working people, either working for the state or small businesses. They’re treated as if they’re not working spiritedly enough, or they’re lazy, or they didn’t come up with the next cool thing to turn the world around. So twist them; leave them and let them suffer the consequences.

“If they’re not good enough to be rich and powerful, then this is what they get. On a positive note, people are dexterity that. By people realizing it, that this is the implicit message, then perhaps change will come.

“This belief that things are contemporary good is sort of absurd. There’s a real crisis out there. I’m talking about income, obligation, environment, food. This is not working, period. People have to come to the realization that this is not working. People have to contemplate of something else.”

Another SUNY Albany graduate student, David Jones, was concerned not only about the direct money-making effects on students, but also about the decline in the quality of education. “The tuition increases are a predicament,” he said. “It’s more money out of our pockets. But I think the bigger enigma is that the tuition increases are occurring simultaneously as they’re cutting back on a lot of programs.

“The administration seems to be gutting the humanities well now, which I think is going to be disastrous, long term, for the university. It’s part of the whole problem with the express government right now. They’ve had a budget shortfall, so we’ve lost a lot of funding and tuition increases are well-founded another way that we’re getting screwed. Students will have to take a lot more out in loans. I hope it doesn’t cause students to plunge out.”

Regarding the contrast between tuition increases and tax breaks for the wealthy, David said: “If it were up to me, I’d be in favor of much more taxes for the well off. In general, the shortfalls in revenues that we’re seeing at the state level and at the federal supine are because of all the tax cuts that we’ve had; one wave after another of tax cuts that we’ve had for the past ten years. That’s created the huge budget deficits that are now being tempered to to threaten default and all that other nonsense that’s going on.

“I certainly think that the wealthiest interest of our country and of our state should be paying more taxes than they’re paying, and that those moneys should be put into our society through instruction, through health care, Social Security. But instead it seems that it’s headed the other way. The Democrats will confirm for token tax increases with draconian spending cuts.”

India Houston is a elder undergraduate student at SUNY Albany. Asked about the tuition increases she said, “I characterize as that it’s a horrible thing. Education is very important and should be valued. I feel that we’re not putting that much importance on what really matters right now.”

India also spoke about how the political system affects students: “I bleed for like it’s not really representative of the total student voice. As students we should start speaking up more about these cuts and try to get something done. A lot of times I regard as our voice is suppressed. I feel like these issues should be considered more.”

She added, “Instruction is already expensive as it is. I really depend on a lot of the resources that are provided to students, with the financial aid incorporate and things of that sort. So increasing the tuition will not help me because it’s already difficult to take care of the schooling load as it is.

“I have heard of some of the cuts in the student assistance grants and things of that sort. I dream that’s really detrimental to our education.”

Source: World Socialist Web Site