You can recognize that money is defined by the State, and in our modern economy, that means laws. Your access to money, and your obligations to repay that money are defined by laws, and if you truly think strategically, with the ends in mind, you can game the system.
As you may know from this blog, I’m really not big on being a lawyer. It requires that you spend like 50+ hours per week sitting on your ass and shuffling paper. I’d much rather be in control of my own time – traveling, or reading, or at the gym.
Well, in this, the American system, it turns out you can basically get access to unlimited money in the form of student loans. While there is a cap on subsidized loans, you can literally take out an unlimited amount of “PLUS” loans. Enough to finance your schooling basically forever, including living expenses. We’re talking food, clothing, lodging, transportation, entertainment, and even health care.
And while the law says you can borrow as much as you want, there is another law, known as “income based repayment,” that allows you to cap your repayment obligations – limiting them to a fixed percentage of your post school income, and a fixed amount of time. Presently, those limits are, I believe, something like 20% of gross income over $20,000, for no more than 25 years. Those terms are set to improve in 2014, due to legislation that was attached to the health care bill. There are also specific programs that are far more forgiving, where you do government work after school.
And while you’re in school, you aren’t obligated to pay anything.
Therefore, in theory, you can take advantage of this asymmetry. With the economy this bad – now and presumably well into the future, you can go to school for a really, really long time. Why not do an MBA, then a PhD, then a JD? That’s a decade of free money!
When it’s time to face the music and pay up, your obligations will be limited.
Of course, since this whole little system depends upon the laws, you’re taking a risk that the laws won’t change to your disadvantage. Then again, they could change in your favor, just like they did recently.
Now, I clearly don’t have the cojones to stop being a lawyer and go back to school, taking on even more debt. My parents and my girlfriend would be mortified, as they are all upstanding citizens who intend to play along with this game called market capitalism. As am I. But the point is I could do it another way. And, if I really thought about things strategically, it might make sense.
If you’re not someone who intends to accumulate a lot of money, and you just want access to goods and services while you enjoy your life, this choice could make sense for you. And you never know. Maybe while you’re dicking around during your PhD program you’ll write a best selling book! If you were working full time, you’d never have the energy for that.
I’m not suggesting that there aren’t compromises involved, and you should clearly do your own homework on these issues before making such a radical life decision. But the point is that once you understand that money is defined by the state, and is merely a placeholder for power, you can think strategically and exploit the asymmetries in those power relationships in order to get access to the goods and services that you want. In this way, you can prosper.
During these rough, rough economic times, try to step back and realize that money isn’t something permanent, and that you aren’t anchored to one way of living. There are other ways to get what you want.
Politically, it is never a particularly good idea to first tell people they are your equals, and then humiliate and degrade them. This is presumably why peasant insurrections, from Chiapas to Japan, have so regularly aimed to wipe out debts, rather than focus on more structural issues like caste systems, or even slavery . . . Debt peonage, it would appear, is far more likely to inspire outrage and collective action than is a system premised on pure inequality.
This may not end well.