2022 Financial Crisis: Inflation surging, Stock Market crumbling

Discussion in 'BS Forum' started by SOXXX2, May 10, 2022.

  1. bicketybam

    bicketybam Well-Known Member

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    I hope you joking.
     
  2. Brook!

    Brook! 2018 Friendliest Member Award Winner
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    Come on. Of course I am joking
     
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  3. Poeman

    Poeman Well-Known Member

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    Brook you cannot joke like that, don't you know we are in a recession?
     
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  4. Br4d

    Br4d 2018 Weeb Ewbank Award

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    The government should do an assessment of what each course of study can produce in terms of income over the early, mid and late career. No loan should be given that will not be repayable in 10 years. The expectation should be that the loan is paid off in 10 years.

    I had a discussion with a friend over dinner tonight on the topic. She's a medical doctor with a fairly large practice and she has had the experience of trying to integrate young doctors into the practice over the years. Due to the chronic shortage of doctors in some essential fields the government has been giving loan forgiveness on a scaling basis if doctors are willing to go into those fields. We're talking geriatrics, pediatrics, ER and a few other fields in which there are never enough doctors to go around. Some fields, like emergency practice, have a very high burnout rate which is why you see so many very young doctors in ER's.

    The loan forgiveness is partly based on the compensation that the doctor receives when they are in the program. Young doctors right out of medical school are starting at $150K in private practice. The rates in public systems are a bit lower than that but if you have an MD you are going to be making $100K+ wherever you are. Most doctors leaving medical school have $400K+ in loans. This is manageable with the salaries they will command in early and mid-career. If they're really invested in doing so they can completely pay off the loans in a decade and both live well and save/invest in the process. It takes willpower to do this and most young doctors are a lot smarter than their age peers but not much wiser.

    So the friend was mentioning a particular young MD in her practice who was unwilling to become a partner after the mandatory 18-24 months that the practice used to evaluate a new MD's skills and sociability. The candidate was somebody everybody liked. She was extremely competent and she contributed to the group knowledge in the practice. She was a good egg and they really wanted to make her a partner when the time came.

    Here's how that works in most practices: the new partner buys in - usually taking a loan to do so since the cost of buying in to a major practice is on the order of $250-300K. This is an absurdly low fee for getting into an outfit like this.

    The young MD's salary was going to go from a flat $150K to 1/12 of what the practice cleared each year. A baseline figure would be about $450K but at times the practice has cleared twice that per partner in a year. There is no differential for years in the practice. The only differential is the amount of hours the doctor actually works. In some cases the highest paid doctor in the practice has been one of the youngest because he or she saw substantially more patients in the year due to working their ass off while older partners were taking it easier.

    However in this case the young doctor was already deep in debt at $400K+ and they could not fathom going another $300k in debt when the effect was going to be to cancel their debt forgiveness which scaled out of existence at the salary level they were going to be at.

    It took the entire practice working the person for the better part of a year to get them to finally see the light. They had to sit through 3 quarterly partner meetings to understand that they were giving up a mint by taking the baseline salary and accepting the 15% loan forgiveness each year.

    There are probably thousands of young doctors out there in maybe slightly less forgiving situations who are sitting on all that debt and trying to get out of it instead of just paying it off or accepting the market value for their services and paying it off that way.

    My biggest issue at the start of the conversation was my lack of understanding of why a person making $150k at 26 with the prospect of a rising salary with $400K debt wouldn't just be paying as much off the principal each year as they could afford and getting out from under that way. It quickly became clear that there was something else entirely going on and that it was completely insane from the perspective of most people.
     
    #864 Br4d, Jun 23, 2022
    Last edited: Jun 24, 2022
  5. Ralebird

    Ralebird Well-Known Member

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    I think most would agree with you but that's not what the lawsuit was about. It was about the government endorsing "schools" that did not deliver what they promised; in most cases here that was a viable education.

    Lenders must be responsible for the loans they make and that stands if the lender is the government or supported by the government. Banks appraise a house before they grant a mortgage to determine the value; they won't give a $25,000 loan on a 1988 Honda Civic because it doesn't have that value. Why then should the government give loans or endorse lenders that are not based on the value of the educational program provided?
     
  6. Ralebird

    Ralebird Well-Known Member

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    I misread it - I thought you said Drinking was banned for six months.
     
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  7. Jonathan_Vilma

    Jonathan_Vilma Well-Known Member

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    I don’t disagree that the price of education should be looked into and even more so than that the curriculum should be assessed. High schools also need to equip students much better so that they walk into college with a better sense of what they need to do to get a fruitful career and maybe Art History isn’t the way to go.

    I have a hard time feeling bad for doctors though. They walk into lucrative careers instantly that sets them up for a life of luxury and early retirement. They pay for it in their 20’s and it pays for itself the rest of the way.
     
  8. Br4d

    Br4d 2018 Weeb Ewbank Award

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    AND THE
    I'm a fan of paying for doctor's education based on merit under a contract where they work in a national healthcare service for a decade after they graduate. I'd do the same thing for dentists based on merit.

    That's alongside the traditional education arrangements for doctors but absent loans and forgiveness.

    Two tiers one of which is complete free enterprise and the other is national service in which the MD/DDS/DMD commits to a period of service at a controlled salary in return for free training and likely under less onerous conditions than the free enterprise system.

    This, BTW, is how you get very smart people from the community to commit to their community even if they have no chance at the loans that are available for the middle class upwards.
     
  9. Jonathan_Vilma

    Jonathan_Vilma Well-Known Member

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    Any sort of merit based system is always overrun with corruption in this system although I don’t hate your concept. We need something to incentivize doctors, engineers (computer centric) and educators. This country is badly behind our competitors in most things related to computer science.

    But I don’t think doctors are the ones hurting.
     
  10. Br4d

    Br4d 2018 Weeb Ewbank Award

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    I'm thinking more along the lines of rural and below the poverty-line communities. These are the areas that are very under-served and particularly by people from the communities in question.

    It's disgraceful that in the most advanced and richest modern economy there are people all across the country who have no effective healthcare, let alone dental. Both of these services are among the most important to living a healthy life and for vast numbers of the population they are unavailable.

    I had an experience about 15 years ago where a medical situation alongside a national financial catastrophe basically drained 95% of my resources in a very short period of time. I had trouble getting medical care for several years after that because my existing debt levels precluded private practice and the socially available medicine was absolutely dismal. I'm talking doctor's offices in New London CT where even the scales were broken and forget about getting any real measure of anything beyond temperature.

    I've had the experience of being offered 800mg of ibuprofen for a wrenched back that actually needed chiropractic work and possibly surgery.
     
  11. Dierking

    Dierking Well-Known Member

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    Ignorance and Rochester kind of go hand in hand.
     
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  12. Br4d

    Br4d 2018 Weeb Ewbank Award

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    I get what you are saying however it is important to note that Rochester, NY and it's surrounding communities used to be among the leading tech manufacturing and research areas in the country.

    .Xerox and Kodak both had their largest facilities there to take advantage of the highly educated population in the region and there were many small offshoot companies in the optics field that setup shop there from the 1920's onwards.
     
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  13. Dierking

    Dierking Well-Known Member

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    You emphatically do not get what I am saying.
     
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  14. HomeoftheJets

    HomeoftheJets Well-Known Member

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  15. BrowningNagle

    BrowningNagle Well-Known Member

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    haha, whoops. Suddenly a centralized authority is needed!
     
  16. joe

    joe Well-Known Member

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  17. Acad23

    Acad23 Well-Known Member

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    joe likes this.
  18. joe

    joe Well-Known Member

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  19. Acad23

    Acad23 Well-Known Member

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  20. FJF

    FJF 2018 MVP Joe Namath Award Winner

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    [​IMG]
    any chance we will be getting an updated tweet for this year?
     
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