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Stephen R Cafaro

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· Common Sense - Revisited in the New Millennium

· The Road to the Third World; Conspiring to Destroy America

· The American Dream - President Obama's Job Pan

· The American Economic Paradox - A Short History

· The America Radical

· More free money from your out of touch government

· Contradictory national priorities are a paradox for the political activist

· Will the USA have inflation, deflation or economic stagnation

· Healthcare confusion abounds as President Obama signs the monumental legisl

· Where have all the jobs gone

· What is the future of healthcare reform in the USA

· The economic case for paying a living wage

· Stephen Cafaro is now writing for The Examiner

· Common Sense Press Release

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Books by Stephen R Cafaro
Private banks are archaic and no longer efficiently serve the economy.


Just like healthcare, the cost of higher education has increased beyond the reach of those who must pay for the critical services. It’s hard to pinpoint why the cost of higher education continues to escalate far in excess of normal inflation. But, a break from the never ending increases is a welcome event to millions of struggling students and their families.

The recent decision by the Federal government to eliminate the middle man from student lending programs may prove to be historic. The logic for this policy shift is simple. For years, student loan programs were run, supported, funded and insured by the government, but the banks were the official lending institution. It was a pretty sweet deal for the bankers who pulled in lucrative profits, but had little risk exposure. Essentially, the money brokers raked in profits from the majority of students who paid their loans, but passed off the deadbeats to the government under a cozy arrangement.

 It does not take a genius to recognize the immediate cost savings that result from the government cutting out the banks. No middle man translates to lower interest rates which lead to lower payments which results in greater affordability which means fewer defaults which makes more money available for more students.  It’s a win-win situation for the students, our government and our economy. The only apparent losers are the banks who have lost their exclusive access to the education money pit.

Why has this monumental hole not been closed earlier? It seems financial institutions have a long history of making money with other people’s money while passing off the risk of doing business to the government. As a result of this comfy situation, the government has enacted guarantees such as the FDIC to protect depositors and the economy from the frequent missteps of the middleman brokers.

Today, the government produces dollars for the banks at interest rates close to zero. The banks then pass the money off to consumers who are forced to pay interest rates of 5 to 25 percent for the privilege of borrowing the money from the middle man. The banks make immense profits until they inevitably get greedy.  And when these banks screw up and threaten the viability of our entire economy, the government feels obligated to save them with trillions of free dollars because they have become “too big to fail”.

 It seems our government can eliminate the entire private banking system. Hopefully, the government takeover of the student loan program is a first step in abolishing this archaic scheme. It does not make economic sense for our government to produce, distribute and guarantee dollars for banks that have so frequently failed the American people and endangered our way of life.               



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Reviewed by Desmond Devlin 6/18/2014
Just fry the Casinoists in the Banking System and be done with it.

The Banksters are the new Al Capone.
Reviewed by John Martin 4/1/2010
Interesting thought. So I take it we would then be getting our car loans, mortgages and business start up capital from the government? If that’s the case…it’s all over my friend. In deed the government in the old Soviet Union took over the banks and everything else, and they only had one depression. Unfortunately for the Russian people that depression lasted from 1917 to 2000.

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