Yellen income gap

Janet Yellen, head of the Fed spoke this week on why the middle class is struggling and she gave two reasons. First was the high cost of college and second tougher lending practices. If we evaluate these two problems we see that federal government policies have aggravated both of these areas. Research shows there is direct correlation between the rising cost of college and the availability of student loans. As soon as colleges found out that the government was offering student loans they started raising tuition and it has now blossomed into students loans totaling over one trillion dollars and many think it will be the next big government bail-out. The reason qualifying for loans is difficult is that the government in its pursuit of expanding the availability of home ownership allowed millions of people to qualify for loans that they could not repay and in typical government fashion the pendulum swung back too far and now getting a loan is too difficult for most. Once more the phrase, the unexpected consequences of good intentions, explains it all.