DEFM_410_WK_3_Discussion.
When reviewing the video by Reich, I am not sure that I
was able to ascertain what his predictions for "2019 to
2016" would be. Reich's broad statement was that he
was optimistic about the future. Not sure what his
version of optimism is, and I would love to ask him if the
current economy is what he had in mind. It sounded as if
he was in favor of the Eccles model of going into debt.
So, what are some measured impacts of policy? First, as
Reich discussed, leading up to the housing bubble of
2007, there was a situation where more and more
Americans were taking on debt for the opportunity to
own a home. Now that in and of itself is not policy, but
the government did have policies that contributed to
growing the bubble.
Barney Frank admitted that "it had been a mistake to
force homeownership on people who could not afford it"
(Wallison & Pinto, 2009). I remember well in 2004,
qualifying for a loan for my first house. The loan would
have allowed me to take on a 65% debt to income on
the mortgage alone. Thankfully I was smart enough not
to go anywhere near that amount. Citizens were sold the
American dream of homeownership, the government
facilitated, banks and lenders seized the opportunity,
and it all had to give at some point. Reich seemed to
focus more on the desires of the citizens than the
enablement of banks and the government.
Fast forward to the late twenty-teens, and you hear the
buzz of the student debt crisis. Can you trace this back
to any government policy? Adam Looney and
Constantine Yannelis of the Brookings Institute and
Chicago Booths', respectively, found that "virtually all
the peaks in student-loan defaults are driven by changes
in federal policy that expand access to the high-risk, for-
profit institutions" (Doris, 2020). In 1991 when I first
started college, yes 1991, I didn't qualify for federal
student loans as an education major. I was too much of a
risk to pay back the loan with the measly salary I would
have earned as a high school history teacher. So I paid
out of pocket, which was doable at $45 a credit hour. At
the current tuition costs that is impossible for most
When reviewing the video by Reich, I am not sure that I
was able to ascertain what his predictions for "2019 to
2016" would be. Reich's broad statement was that he
was optimistic about the future. Not sure what his
version of optimism is, and I would love to ask him if the
current economy is what he had in mind. It sounded as if
he was in favor of the Eccles model of going into debt.
So, what are some measured impacts of policy? First, as
Reich discussed, leading up to the housing bubble of
2007, there was a situation where more and more
Americans were taking on debt for the opportunity to
own a home. Now that in and of itself is not policy, but
the government did have policies that contributed to
growing the bubble.
Barney Frank admitted that "it had been a mistake to
force homeownership on people who could not afford it"
(Wallison & Pinto, 2009). I remember well in 2004,
qualifying for a loan for my first house. The loan would
have allowed me to take on a 65% debt to income on
the mortgage alone. Thankfully I was smart enough not
to go anywhere near that amount. Citizens were sold the
American dream of homeownership, the government
facilitated, banks and lenders seized the opportunity,
and it all had to give at some point. Reich seemed to
focus more on the desires of the citizens than the
enablement of banks and the government.
Fast forward to the late twenty-teens, and you hear the
buzz of the student debt crisis. Can you trace this back
to any government policy? Adam Looney and
Constantine Yannelis of the Brookings Institute and
Chicago Booths', respectively, found that "virtually all
the peaks in student-loan defaults are driven by changes
in federal policy that expand access to the high-risk, for-
profit institutions" (Doris, 2020). In 1991 when I first
started college, yes 1991, I didn't qualify for federal
student loans as an education major. I was too much of a
risk to pay back the loan with the measly salary I would
have earned as a high school history teacher. So I paid
out of pocket, which was doable at $45 a credit hour. At
the current tuition costs that is impossible for most
