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Comments on: Why we always need a “why” http://www.tvhe.co.nz/2011/03/29/why-we-always-need-a-why/ The Visible Hand in Economics Mon, 04 Apr 2011 03:03:52 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: Matt Nolan http://www.tvhe.co.nz/2011/03/29/why-we-always-need-a-why/#comment-33111 Mon, 04 Apr 2011 03:03:52 +0000 http://www.tvhe.co.nz/?p=5842#comment-33111 @Miguel Sanchez

“I find THIS write-up strange”

That is pretty standard for anything I write though – usually I find them strange when I come back to them as well 😉

“The way to change this is to make student loans on a commercial basis – i.e. charging interest, a set repayment schedule, and a black mark on your credit record if you default – but even then I think we’ve missed the boat on those who are already overseas.”

The thing is I agree with you 100%. However, I think this is sort of the point – I found it strange that we were trying to guilt them, instead of trying to see what the problem was and then come up with a solution that is consistent with that explanation.

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By: Miguel Sanchez http://www.tvhe.co.nz/2011/03/29/why-we-always-need-a-why/#comment-33109 Mon, 04 Apr 2011 01:59:05 +0000 http://www.tvhe.co.nz/?p=5842#comment-33109 I find THIS write-up strange. Surely you’re aware of the reason that Kiwis overseas don’t pay back their loans – because they don’t have to. NZ doesn’t have a mechanism for docking the pay of people who work in other jurisdictions. We have a system that allows someone to get a tertiary education for free – but ONLY if they leave the country and never come back. The way to change this is to make student loans on a commercial basis – i.e. charging interest, a set repayment schedule, and a black mark on your credit record if you default – but even then I think we’ve missed the boat on those who are already overseas.

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By: TVHE » Central Banks: Second best policy and operational separation http://www.tvhe.co.nz/2011/03/29/why-we-always-need-a-why/#comment-33106 Mon, 04 Apr 2011 00:19:36 +0000 http://www.tvhe.co.nz/?p=5842#comment-33106 […] pay attention to, and about the process people use for forming beliefs.  But we still need to say why these things occur – and hopefully make our given hypothesis testable – before we can […]

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By: Registry http://www.tvhe.co.nz/2011/03/29/why-we-always-need-a-why/#comment-33046 Tue, 29 Mar 2011 18:30:48 +0000 http://www.tvhe.co.nz/?p=5842#comment-33046 It’s also weird to look at the change in student fees in Britain and notice the lack of support for the jobless outside of education. Surely so many underserving people in full time education would open up more job opportunites? Clearly not.

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By: Matt Nolan http://www.tvhe.co.nz/2011/03/29/why-we-always-need-a-why/#comment-33037 Tue, 29 Mar 2011 01:46:45 +0000 http://www.tvhe.co.nz/?p=5842#comment-33037 @Talosaga

“I’m not sure what you mean by this. If we increased the interest rate on student loans it wouldn’t be a win-win either. (ex-)Students would be worse off. Or are you simply stating that there is no win-win situation here?”

Yar, there is no win-win. I was just suggesting a way we could look at the trade-offs, and then suggesting a policy choice. We could leave interest rates unchanged if we want, but in that case it suggests that their isn’t any issue here – so it is weird to have a newspaper article on it.

I agree I have no problem with the talking, I wasn’t very comfortable about it being suggested as a “win-win” though – it just didn’t make any sense.

“Well they have received a large subsidy from New Zealand taxpayers”

A subsidy society was willing to provide for some reason. Don’t ask me why.

“They’re not traitors, but I think it’s fair to say they owe NZ taxpayers something.”

Such as a loan at 6-7% interest 😉

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By: Talosaga http://www.tvhe.co.nz/2011/03/29/why-we-always-need-a-why/#comment-33036 Tue, 29 Mar 2011 01:42:34 +0000 http://www.tvhe.co.nz/?p=5842#comment-33036 “Now just talking at people doesn’t cost much – there isn’t a policy failure from doing that. But it doesn’t make it a “win-win” that we are missing out on – if students aren’t paying off their loans, they will have a reason. Trust me.”

I’m not sure what you mean by this. If we increased the interest rate on student loans it wouldn’t be a win-win either. (ex-)Students would be worse off. Or are you simply stating that there is no win-win situation here?

I don’t see anything wrong with appealing to the moral side of people. When the first best economic solution is not available, (for political reasons or whatever) using guilt and ethics can be a good way of preventing free-riding and other harmful activities. And the two solutions aren’t mutually exclusive. You can appeal to the moral and self-interested side of a person at the same time. However, saying that it would be in the interest of the student to pay back their loan early is misleading.

“Yes, they’re traitors. See Russell Coutts as evidence of this widely held opinion.”

Well they have received a large subsidy from New Zealand taxpayers (via the government), and because they’re overseas the spillover benefits from their education are not received by New Zealanders. They’re not traitors, but I think it’s fair to say they owe NZ taxpayers something.

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By: rauparaha http://www.tvhe.co.nz/2011/03/29/why-we-always-need-a-why/#comment-33034 Mon, 28 Mar 2011 21:19:37 +0000 http://www.tvhe.co.nz/?p=5842#comment-33034 “we would likely be causing harm on New Zealander’s who have moved overseas – is that something we want to do?”

Yes, they’re traitors. See Russell Coutts as evidence of this widely held opinion.

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