http://www.attn.com/stories/175/countries-that-fund-higher-education? ECONOMY Five Countries That Have The Right Approach To Funding Higher Education Germany made international news when it decided to eliminate college tuition entirely (before this, it was less than €1,000 -- the equivalent to $1,300 -- per year). Meanwhile in the United States, t he average per-year tuition cost is $9,139 for an in-state, four-year public college, $22,958 for an out-of-state, four-year public college, and $31,231 for a private, four-year college. The average American college student will graduate with more than $27,000 in debt, and college costs in the U.S. have gone up more than 1100 percent since 1978 with little sign of leveling off. In light of Germany's actions, we decided to highlight five countries whose approaches towards financing higher education put ours to shame. 1. Germany Nearly all college students in Germany (99 percent) attend public universities, funded by the government. These schools were free up until 2006, when the German government decided to allow them to charge up to €1,000 per year in tuition fees to shift some of the financial burden onto students. The ensuing eight years have seen mass protests (in the German state Hesse, 70,000 signatures were gathered), many politicians voted out of office, and, eventually, every German state reverted to the free tuition model. Germany, which has the fourth largest economy in the world (behind the US, China, and Japan), once again has the government pick up the full tab for its citizens' higher education. “We got rid of tuition fees because we do not want higher education [that] depends on the wealth of the parents," said Gabrielle Heinen-Kjajic, the minister for science and culture in Lower Saxony. What a novel concept. 2. Denmark Denmark's government provides university education completely free for its citizens as well as those of any country in the European Union. It gets better. Denmark's government also provides monthly stipends to students for cost-of-living expenses (rent is less expensive in Denmark but food, transportation, and other goods tend to be slightly more expensive as compared to the United States according to Expatistan and Numbeo). Any student who needs additional money can get a low-interest government loan (Denmark's parliament sets the interest rate). 3. Australia Australian universities charge tuition, and many students borrow money to attend school; however, Australia has a few tricks in place to help students manage debt. For one, tuition varies based on your major. Majors that lead to a higher future income, like medicine, law, and business, cost more. Second, students may pay as much of their tuition up front as they or their families can afford, and get a 10 percent discount. Any tuition costs not paid up front will be paid back by the student based on their future income (this system is known as HELP). This is where it gets interesting. Australian graduates don't pay back a cent until their income reaches a certain level (around $51,000 per year). Then, they pay back between 4 percent and 8 percent of their income each year. However, if their income ever falls below the minimum level, they do not have to pay anything back until their income recovers. The most important part: no fees or interest accumulates on their debt during years where they earn below the $51,000 income threshold. It should be noted that Australia's government is cutting its education budget, and as a result, Australian universities are expected to raise tuition at least 30 percent. The interest rate on loans is also expected to be tied to the ten-year government bond rate (6 percent), which is higher than the current interest rate tied to the Consumer Price Index (currently 2.9 percent). 4. New Zealand Staying Down Under, Australia's neighbor New Zealand spends a greater percentage of its GDP (which essentially represents the size of a country's economy) on education than any country in the world. In New Zealand, there is no doubt that that education is a public good and is therefore worth substantial government investment. Like Australia, New Zealand allows graduates to repay their loans based on how much they earn. And in2006, New Zealand's government completely eliminated interest on student loans for all future students, meaning students will continue to pay back their loans based on their income level, but won't accrue interest. As in Denmark, students in New Zealand also receive an allowance that does not need to be paid back. 5. United Kingdom Almost all of UK's universities are public, and tuition is around £6,000 per year (which is a little less than $10,000 per year). No university can charge more than £9,000. Students repay their debt on an income-contingent basis, meaning they are not required to make a payment until their income exceeds £21,000 (around $33,000). Students pay back 9 percent of any income over that threshold, and their payments are put on hold if their income drops below £21,000 per year. So, even though many in the U.K. are upset that higher education tuition has tripled in recent years, theirs is still a system that is currently better than the United States.
You previously stated that a little knowledge is a dangerous thing. I get the points you are attempting to make regarding the Fed. However, several of your statements have many incorrect assumptions. You mention the profits above and you are obviously referring to when the Fed remits profits to the Treasury. However, how much is the annual dividend to the member banks? Who elects the board of directors of the reserve banks? What entity or entities do the directors represent?
6%. six out of nine directors at each District Bank are chosen by the District Banks, member commercial banks. These private banks indirectly via the board members they elect, run the day to day operations of the Fed system's Branch (District) banks. The District Banks are set up and run like non-profit corporations. They do their own hiring and firing, set pay scales, etc., and their employees are employees of the District Bank, and not of the Federal Government. This has the outward appearance of a private corporation doing the bidding of the member commercial banks. This isn't entirely untrue but it is highly misleading. Over the years, since 1913, the entire Fed system has transitioned from greater control by the member banks to greater control by the Board of governors and the parent Washington Fed. Some people claim that the Branch Banks are privately owed. There is some legitimacy to this claim because in fact the Branch Banks have a hybrid structure with some elements of private ownership, and some of Government ownership. (The official position of the Federal Reserve itself is that no one owns the Federal Reserve.) An argument can be made based on the board structure and the "stock" that member banks are required to purchase, that the Branch Fed Banks are privately owned.. Nevertheless there are even better arguments on the other side. In the end, it really doesn't matter that much. What matters is that all of the ridiculous Fed rumors don't haave any basis in fact take root and end up doing real damage. The Board of Governors unlike the Treasury, is isolated by law from Congressional Interference. The Fed's Board of Governors and its FOMC exercises veto power and directs the Branch banks in their open market operations. All Branch profits, after expenses, and I'm sure the pay scale at the Branch Banks is generous, flow back to the treasury and not to the Branch's member banks. I believe that is the ultimate test of ownership, i.e., where the profits end up!. It is just an opinion and I am happy to listen to counter opinions so long as they are based on fact and not some You Tube video or conspiracy theory.. Here is a common argument that you will find in many places, and in various permutations. You won't find this argument in favor of the Branch banks being privately owned on the Fed's official Website however. Here is an example from http://www.publiceye.org/conspire/flaherty/flaherty5.html The argument goes like this: Member banks are at the bottom of the organization chart. These are commercial banks and S&Ls who have joined the Federal Reserve System (FRS). By law, all nationally chartered banks must join, and any state chartered bank has the option to join (12 USCA §282). By joining the FRS a member bank is becoming a shareholder -- an owner -- in its regional Federal Reserve Bank. For example, suppose you and I open a new nationally chartered bank in Charlotte, North Carolina. According to the district map, we see that Charlotte is in the Richmond Federal Reserve district, so our new bank will have to become a member of the Richmond Federal Reserve Bank. So, the claim that the "Fed is privately owned" is correct -- each Federal Reserve Bank is owned by private for-profit commercial banks and S&Ls. Notice how this argument simply leaps to a conclusion, i.e., The "Fed is Privately Owned." It extrapolates from "stock" and "shareholder" to "owner." This extrapolation is right if we are discussing typical for profit corporations; it is wrong, however, if we are discussing the Fed Branch Banks, and for many reasons. The very term "stock," as it applies to the U.S. Federal Reserve System, has caused a great deal of confusion and misled people for years. It's unfortunate that that is the word used in the 1913 legislation that set up the system. They should have used another word other than "stock". Calling the shares fixed interest, redeemable at par, non-negotiable, non-maturing bonds would have made more sense, but "stock" rolls of the tongue much easier. Originally, the government anticipated that each Fed branch bank needed to raise a certain amount of capital from commercial banks that would be regulated through the Branch Banks. I think it was in the neighborhood of 4 million each (you can check the original legislation, I have forgotten the exact amount. Today of course it would be billions.) The legislation said that if there weren't enough commercial banks in the district to raise enough initial capital, then the difference could be made up by selling shares to the public. As it turns out, I don't believe a single share was ever sold to the public, and all the shares today are owned by commercial banks. Stock in the Fed Branch Banks does not impart any, so far as I can tell, of the ownership rights typical of common stock. I don't have time to go into to all of the differences between typical, corporate, common stock and the stock in the Fed District Banks, which have dot ORG net addresses, but I'll review three of these differences. 1) the stock can't be traded or sold; 2) it does not impart a one share - one vote right, as typical of corporate common stock. (The voting right of the member banks is not connected to the stock at all. Each member bank gets one vote for the their Branch Bank directors no matter how many branch bank shares they own.) , and 3) no profits of the District banks flow back to the share holders. (They get a fixed 6% return*, All non-retained profits flow to the U.S.Treasury, not to the stock holders.) To my mind flow of profits is the best, most reliable test of ownership. Now it is sometimes claimed, there surely must be a You Tube video somewhere that makes this claim, that the entire Federal reserve system is owned by foreign interests. You can imagine, as indeed many crackpots have, that if foreign interests owned a controlling interest in our U.S. Banks, and if U.S. Banks really did own their regulating Fed District Banks, then these foreign banks would indirectly own a Fed District Bank. Under this scenario, if Foreign Banks owned most of the Commercial Banks in the Country, Foreign banks would indirectly own all of the the Federal Reserve System except the Board of Governors. Of course, This is impossible because the stock issued to the Commercial Banks by the Fed District Banks does not impart ownership of the District Banks. Furthermore there are no large, U.S. commercial banks that have any significant foreign ownership of their stock! _________________ *There's been some discussion recently of lowering this rate of return.
How Central Banks Have Made Wealth Inequality Worse "Central banks' attempts to kick-start advanced economies following the financial crisis have made the gap between the rich and poor wider, suggests the Bank for International Settlements. In the BIS' Quarterly Review, Analysts Dietrich Domanski, Michela Scatigna, and Anna Zabai studied the evolution of wealth inequality in France, Germany, Italy, Spain, the U.K. and the U.S. was influenced by monetary policy since the recession. On its face, this conclusion may be intuitive: the collapse in financial markets disproportionately hurt households in which financial assets make up a greater portion of their net worth (which tend to be the richest ones). To the extent that central banks aided a reflation in financial assets, they contributed to a dynamic in which wealthier households became richer than less affluent ones. Yet conventional economic wisdom holds that the net effect of central banks on wealth inequality is neutral, the BIS explains. "Notwithstanding the range of channels through which monetary policy may affect the distribution of wealth, the traditional view holds that such effects are small," the authors write. "As a by-product of the pursuit of macroeconomic stabilization objectives, they net out over the business cycle." But this time might be different: The length and nature of the stimulus provided by central banks suggest that distributional effects of monetary accommodation have been particularly acute during this cycle. One of the key transmission channels through which quantitative easing is thought to buoy real economic activity is through the wealth effect: as owners of assets see valuations rise, they feel wealthier and increase spending. With monetary policy across developed nations remaining stimulative more than seven years after Lehman Brothers filed for bankruptcy, the marginal benefit that accrues to owners of financial assets has persisted for an especially long time. "All asset classes—houses, stocks, toll bridges, commercial real estate—should trade at higher multiples to cash flows in an era of low interest rates," wrote CIBC World Markets Chief Economist Avery Shenfeld. The BIS' trio also theorizes that the monetary stimulus' impact on wealth inequality has been enhanced in light of changes to households' balance sheets. "Households may have become more sensitive to changes in interest rates and asset values over the past decade," they wrote. For one, household balance sheets in advanced economies have expanded much faster than GDP, with total household assets and net wealth growing in tandem. In addition, the share of capital income has been rising steadily since the 1980s and now accounts for about 30 percent of household income in advanced economies." The primary conclusion from the analysts' report is that "monetary policy may have added to inequality to the extent that it has boosted equity prices." "Since 2010, high equity returns have been the main driver of faster growth of net wealth at the top of the distribution," they wrote. Central bank asset purchases designed to push investors further out the risk spectrum have fostered a decline in the equity risk premium, which is positive for stocks. Increases in home prices tend to serve as a moderating force on wealth inequality, as poorer households have a higher portion of their assets in real estate than the rich..." http://www.bloomberg.com/news/artic...ntral-banks-have-made-wealth-inequality-worse
Where the profits flow is at best a tiny part of a proper text... but it is thoroughly ridiculous when the entity being examines creates money. Its like asking if the U.S. treasury makes a profit minting coins. The real test is who decides who gets the trillions of dollars the Federal Reserve system creates. The Regional Fed banks look like private banks... because they are. No one in the Federal Govt makes decisions for them. No one in the Federal Govt has stock in them. Here is a proper test of ownership.. Lewis v. United States, 680 F.2d 1239 (1982) 28 U.S.C. Sect. 2671. The liability of the United States for the negligence of a Federal Reserve Bank employee depends, therefore, on whether the Bank is a federal agency under Sect. 2671. [1,2] There are no sharp criteria for determining whether an entity is a federal agency within the meaning of the Act, but the critical factor is the existence of federal government control over the "detailed physical performance" and "day to day operation" of that entity. . . . Other factors courts have considered include whether the entity is an independent corporation . . ., whether the government is involved in the entity's finances. . . ., and whether the mission of the entity furthers the policy of the United States, . . . Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities for purpose of the FTCA, but are independent, privately owned and locally controlled corporations. Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stockholding commercial banks elect two thirds of each Bank's nine member board of directors. The remaining three directors are appointed by the Federal Reserve Board. The Federal Reserve Board regulates the Reserve Banks, but direct supervision and control of each Bank is exercised by its board of directors. 12 U.S.C. Sect. 301. The directors enact by-laws regulating the manner of conducting general Bank business, 12 U.S.C. Sect. 341, and appoint officers to implement and supervise daily Bank activities. These activites include collecting and clearing checks, making advances to private and commercial entities, holding reserves for member banks, discounting the notes of member banks, and buying and selling securities on the open market. See 12 U.S.C. Sub-Sect. 341-361. Each Bank is statutorily empowered to conduct these activites without day to day direction from the federal government. Thus, for example, the interest rates on advances to member banks, individuals, partnerships, and corporations are set by each Reserve Bank and their decisions regarding the purchase and sale of securities are likewise independently made. It is evident from the legislative history of the Federal Reserve Act that Congress did not intend to give the federal government direction over the daily operation of the Reserve Banks: It is proposed that the Government shall retain sufficient power over the reserve banks to enable it to exercise a direct authority when necessary to do so, but that it shall in no way attempt to carry on through its own mechanism the routine operations and banking which require detailed knowledge of local and individual credit and which determine the funds of the community in any given instance. In other words, the reserve-bank plan retains to the Government power over the exercise of the broader banking functions, while it leaves to individuals and privately owned institutions the actual direction of routine. H.R. Report No. 69 Cong. 1st Sess. 18-19 (1913). The fact that the Federal Reserve Board regulates the Reserve Banks does not make them federal agencies under the Act. In United States v. Orleans, 425 U.S. 807, 96 S.Ct. 1971, 48 L.Ed.2d 390 (1976), the Supreme Court held that a community action agency was not a federal agency or instrumentality for purposes of the Act, even though the agency was organized under federal regulations and heavily funded by the federal government. Because the agency's day to day operation was not supervised by the federal government, but by local officials, the Court refused to extend federal tort liability for the negligence of the agency's employees. Similarly, the Federal Reserve Banks, though heavily regulated, are locally controlled by their member banks. Unlike typical federal agencies, each bank is empowered to hire and fire employees at will. Bank employees do not participate in the Civil Service Retirement System. They are covered by worker's compensation insurance, purchased by the Bank, rather than the Federal Employees Compensation Act. Employees travelling on Bank business are not subject to federal travel regulations and do not receive government employee discounts on lodging and services. The Banks are listed neither as "wholly owned" government corporations under 31 U.S.C. Sect. 846 nor as "mixed ownership" corporations under 31 U.S.C. Sect. 856, a factor considered is Pearl v. United States, 230 F.2d 243 (10th Cir. 1956), which held that the Civil Air Patrol is not a federal agency under the Act. Closely resembling the status of the Federal Reserve Bank, the Civil Air Patrol is a non-profit, federally chartered corporation organized to serve the public welfare. But because Congress' control over the Civil Air Patrol is limited and the corporation is not designated as a wholly owned or mixed ownership government corporation under 31 U.S.C. Sub-Sect. 846 and 856, the court concluded that the corporation is a non-governmental, independent entity, not covered under the Act. Additionally, Reserve Banks, as privately owned entities, receive no appropriated funds from Congress. . . . Finally, the Banks are empowered to sue and be sued in their own name. 12 U.S.C. Sect. 341. They carry their own liability insurance and typically process and handle their own claims. In the past, the Banks have defended against tort claims directly, through private counsel, not government attorneys . . ., and they have never been required to settle tort claims under the administrative procedure of 28 U.S.C. Sect. 2672. The waiver of sovereign immunity contained in the Act would therefore appear to be inapposite to the Banks who have not historically claimed or received general immunity from judicial process.
You went to law school didn't you? Then why didn't you learn that courts make decisions on the basis of prior decisions; not on the basis of what's logical. When logic and precedence agree, it's a happy accident. Think of the Reserve Banks this way, if you will, by answering this question: "Who, owns the Red Cross?" Nobody, right. That's the official position of the Federal Reserve anyway, and I quite concur. Nobody owns the Federal Reserve.
They made it worse they didn't create it. As an extreme example, if you have no assets and I have billions in assets, any policy of the central bank that inflates asset values will widen the disparity between our two net worths. The monstrous skew in the distribution of Wealth in the U.S. has been growing since the 1980s and the growth is accelerating just as you'd expect from a cause that compounds over time. I have discussed this in numerous other posts, and Piketty in "Capital in the 21st Century" discusses the same in the final chapters of his treatise on capital.