Obama cranks up “fiscal cliff” pressure, Boehner says talks stalemated

HATFIELD, Penn. (Reuters) – President Barack Obama turned up the pressure in “fiscal cliff” talks on Friday, hitting the road to drum up support for his drive to raise taxes on the wealthy and warning Americans that Republicans were offering them “a lump of coal” for Christmas.

In a visit to a Pennsylvania toy factory, Obama portrayed congressional Republicans as Scrooges who risked sending the country over the fiscal cliff rather than strike a deal to avert the tax increases and spending cuts that begin in January unless Congress intervenes.

In Washington, House of Representatives Speaker John Boehner declared a stalemate in the talks and said Obama’s plan to raise taxes on the rich was the wrong approach.

“There is a stalemate. Let’s not kid ourselves,” the Ohio Republican said. “Right now we are almost nowhere.”

Lawmakers are nervously eyeing the markets as the deadline approaches, with gyrations likely to intensify pressure to bring the drama to a close.

Major stock market indexes fell as Boehner spoke but recovered afterward. It was a repeat of the pattern earlier in the week when the Speaker offered a gloomy assessment.

The latest round of high-stakes gamesmanship focuses on whether to extend the temporary tax cuts that originated under former President George W. Bush beyond their December 31 expiration date for all taxpayers, as Republicans want, or just for those with income under $ 250,000, as Obama and his fellow Democrats want.

“If Congress does nothing, every family in America will see their taxes automatically go up on January 1,” Obama said during his visit to a factory in suburban Philadelphia. “That’s sort of like the lump of coal you get for Christmas. That’s a Scrooge Christmas.”

Obama, who made higher tax rates for the wealthy a centerpiece of his re-election campaign, said Americans should pressure Republicans to quickly agree to extend the middle-class tax cuts that cover 98 percent of the public.

“We already all agree, we say, on making sure middle-class taxes don’t go up. So let’s get that done. Let’s go ahead and take the fear out for the vast majority of American families so they don’t have to worry,” Obama said at The Rodon Group factory, which makes K’NEX building toy systems as well as Tinkertoys and consumer products.

‘VICTORY LAP’

Obama’s trip to Pennsylvania was part of a renewed public relations push on the fiscal cliff that the White House hopes will build support for his stance. The effort has infuriated Republicans, with Boehner calling it a “victory lap” on Thursday as he rejected Obama’s proposals to avoid the cliff.

“It tells you he’s not interested in negotiating. He’s more interested in traveling around the country trying to campaign,” Representative Jim Gerlach, a Pennsylvania Republican, said on CNBC on Friday.

The effort continues next week, as Treasury Secretary Timothy Geithner, Obama’s lead negotiator in the talks, makes the rounds of television talk shows on Sunday. Obama will meet a bipartisan group of governors at the White House on Tuesday, and the president will address the Business Roundtable on Wednesday.

Boehner is scheduled for an appearance on Fox News Sunday.

Obama and Boehner both said they still believe the two sides can work together to find a solution before the end-of-year deadline.

But Boehner has been scrambling to keep his House Republicans in line, with some signaling more flexibility on ways to find a combination of new revenue and spending cuts that could yield an agreement.

Most House Republicans refuse to back higher rates, preferring to raise revenue through tax reform. But some have suggested they would support a deal with higher rates for the rich if it includes significant cuts in the government-sponsored Medicare and Medicaid healthcare entitlement programs.

Senate Republican Leader Mitch McConnell of Kentucky told the Wall Street Journal in an interview that Republicans would agree to more revenue – although not higher tax rates – if Democrats agreed to such changes as raising the eligibility age for Medicare and slowing cost-of-living increases in the Social Security retirement program.

House Democratic Leader Nancy Pelosi of California, who has opposed such changes, brushed off the comments. “Nothing new in that statement from Mitch McConnell,” she said.

Moderate Republican Representative Steven LaTourette of Ohio, who is retiring at year’s end, said he would back some high-end tax rate increases if the deal reforms Medicare.

He said he would support new limits on high-income earners’ Medicare benefits, and raising the eligibility age for entitlement programs.

Obama said he was encouraged by the shifting views of some Republicans, and urged House approval of a bill that has already cleared the Democratic-controlled Senate that would lock in the middle-class tax cuts and raise the rates for the rich.

“If we can get a few House Republicans on board, we can pass the bill … . I’m ready to sign it,” Obama said.

(Additional reporting by Richard Cowan, Thomas Ferraro, Kim Dixon, Edward Krudy; Writing by John Whitesides; Editing by Fred Barbash and Xavier Briand)

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Noisy city: Cacophony in Caracas sparks complaints

CARACAS, Venezuela (AP) — This metropolis of 6 million people may be one of the world’s most intense, overwhelming cities, with tremendous levels of crime, traffic and social strife. The sounds of Caracas‘ streets live up to its reputation.

Stand on any downtown corner, and the cacophony can be overpowering: Deafening horns blast from oncoming buses, traffic police shrilly blow their whistles and sirens shriek atop ambulances stuck in bumper-to-bumper traffic.

Air horns routinely used by bus drivers are so powerful they make pedestrians on crosswalks recoil, and can even leave their ears ringing. Loud salsa music blares from the windows of buses, trucks with old mufflers rumble past belching exhaust, and “moto-taxis” weave through traffic beeping high-pitched horns.

Growing numbers of Venezuelans are saying they’re fed up with the noise that they say is getting worse, and the numbers of complaints to the authorities have risen in recent years.

One affluent district, Chacao, put up signs along a main avenue reading: “A honk won’t make the traffic light change.”

“The noise is terrible. Sometimes it seems like it’s never going to end,” said Jose Santander, a street vendor who stands in the middle of a highway selling fried pork rinds and potato chips to commuters in traffic.

Prosecutor General Luisa Ortega recently told a news conference that officials have started “putting an increased emphasis on promoting peaceful coexistence” by punishing misdemeanors such as violations of anti-noise regulations and other minor crimes. That effort has translated into hundreds of noise-related cases in recent years.

Some violators are ordered to perform community service. For instance, two young musicians who were recently caught playing loud music near a subway station were sentenced to 120 hours of community service giving music lessons to students in public schools.

Others caught playing loud music on the street have been charged with disturbing the peace after complaints from neighbors. Fines can run as high as 9,000 bolivars, or $ 2,093.

On the streets of their capital, however, Venezuelans have grown used to living loudly. The noisescape adds to a general sense of anarchy, with many drivers ignoring red lights and blocking intersections along potholed streets strewn with trash.

“This is something that everybody does. Nobody should be complaining,” said Gregorio Hernandez, a 23-year-old college student, as he listened to Latin rock songs booming from his car stereo on a Saturday night in downtown Caracas. “We’re just having fun. We’re not hurting anybody.”

Adding to the mess is the country’s notoriously divisive politics, which regularly fill the streets with marches and demonstrations.

On many days, the shouts of protesters streaming through downtown can be heard from blocks away, demanding pay hikes or unpaid benefits.

And the sporadic crackling of gunfire in the slums can be confused for firecrackers tossed by boisterous partygoers.

It’s difficult to rank the world’s noisiest cities because many, including Venezuela’s capital, don’t take measurements of sound pollution, said Victor Rastelli, a mechanical engineering professor and sound pollution expert at Simon Bolivar University in Caracas. But Rastelli said he suspects Caracas is right up there among the noisiest, along with Sao Paulo, Mexico City and Mumbai.

Excessive noise can be more than simply an annoyance, Rastelli said. “This is a public health problem.”

Dr. Carmen Mijares, an audiologist at a private Caracas hospital, said she treats at least a dozen patients every month for hearing damage caused by prolonged exposure to loud noises.

“Many of them work in bars or night clubs, and their maladies usually include temporary hearing loss and headaches,” Mijares said. For others, she said, the day-to-day noise of traffic, car horns and loud music can exacerbate stress and sleeping disorders.

Several cities have successfully reduced noise pollution, said Stephen Stansfeld, a London psychiatry professor and coordinator of the European Network on Noise and Health.

One of the most noteworthy initiatives, Stansfeld said, was in Copenhagen, Denmark, where officials used sound walls, noise-reducing asphalt and other infrastructure as well as public awareness campaigns to fight noise pollution.

But such high-tech solutions seem like a remote possibility in Caracas, where streets are literally falling apart and aging overpasses regularly lack portions of their guard rails. Prosecutors, angry neighbors and others hoping to fight the noise will have to persuade Venezuelans to do nothing less than change their loud behavior.

For Carlos Pinto, however, making noise is practically a political right.

The 26-year-old law student and his friends danced at a recent street party to house music booming from woofers in his car’s open trunk, with neon lights on the speakers that pulsed to the beat.

When asked about the noise, he answered: “We will be heard.”

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AP freelance video journalist Ricardo Nunes contributed to this report.

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Christopher Toothaker on Twitter: http://twitter.com/ctoothaker

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“Homeland” in, “Boardwalk Empire” out in PGA TV nominations

LOS ANGELES (Reuters) – Emmy-winning dramas “Homeland”, “Mad Men” and British period piece “Downton Abbey” will compete for the annual Producers Guild Awards for the top shows on U.S. television, organizers announced on Wednesday.

But last year’s winner – HBO’s lavish Prohibition-era gangster drama “Boardwalk Empire” – failed to make the cut this year with the Producers Guild of America, one of the leading professional guilds in Hollywood.

Instead, the producers of popular fantasy drama “Game of Thrones” and drug underworld show “Breaking Bad” round out the nominees for the top PGA prize in television.

The PGA also nominated the producers of comedies “Modern Family”, “The Big Bang Theory”, “Louie”, “30 Rock” and Larry David’s wry “Curb Your Enthusiasm” as contenders for its 2013 awards on the small screen.

In the reality genre, singing contest “The Voice” will go head to head with fashion show “Project Runway”, “Top Chef”, “Dancing with the Stars” and Emmy darling “The Amazing Race”.

Hollywood‘s guilds represent professionals in their respective industries, and recognition by peers can go a long way toward boosting a producer’s career.

The PGA will announce nominees in its closely watched movie category in early January, and hand out its awards for film and television at a ceremony in Hollywood on January 26.

(Reporting by Jill Serjeant; Editing by Dale Hudson)

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Drug, alcohol abuse tied to early-life strokes

NEW YORK (Reuters Health) – Younger adults who suffered a stroke were often smokers or had abused drugs or alcohol, in a new study from Ohio and Kentucky.

Although strokes are often thought of as a condition of the elderly, researchers said long-term changes in the heart, arteries and blood as a result of drug abuse or heavy drinking may put users at higher-than-average risk earlier in life.

It’s also possible that some drugs, particularly cocaine and methamphetamines, may trigger a stroke more immediately, according to Dr. S. Andrew Josephson, a neurologist from the University of California, San Francisco, who has studied drug use and stroke.

Because substance use is common in older adults as well, he said doctors should ask anyone who’s had a stroke about drugs and alcohol.

But, “we know that even with vascular risk factors that are prevalent – smoking, high blood pressure… most people still don’t have a stroke until they’re older,” Josephson, who was not involved in the new study, told Reuters Health.

“When a young person has a stroke, it is probably much more likely that the cause of their stroke is something other than traditional risk factors.”

According to the Centers for Disease Control and Prevention, close to 800,000 people in the United States have a stroke every year, and strokes are the most common cause of serious long-term disability. One study of 2007 data found that almost five percent of people who had a stroke that year were between ages 18 and 44.

The current study included people from Greater Cincinnati and Northern Kentucky who’d had a stroke before they hit 55.

Dr. Brett Kissela from the University of Cincinnati and his colleagues reviewed medical charts for blood or urine test results or other records of substance abuse for close to 1,200 stroke patients.

In 2005, the most recent year covered, just over half of younger adults who suffered a stroke were smokers at the time, and one in five used illicit drugs, including marijuana and cocaine. Thirteen percent of people had used drugs or alcohol within 24 hours of their stroke, according to findings published in the American Heart Association journal Stroke.

“The rate of substance abuse, particularly illicit drug abuse, is almost certainly an underestimate because toxicology screens were not obtained on all patients,” said Dr. Steven Kittner, a professor of neurology at the University of Maryland School of Medicine in Baltimore who also wasn’t part of the research team.

“It’s certainly underreported,” he told Reuters Health.

The rate of smoking, drug use and alcohol abuse – defined as three or more drinks per day – seemed to increase among stroke patients between the mid-1990s and the mid-2000s.

But Kissela and his team said they can’t be sure whether more people were actually using those substances or doctors were just getting better at testing for and recording drug abuse.

The study also can’t prove that patients’ drug or alcohol use directly contributed to their strokes. It’s possible, for example, that people who abuse drugs also see their doctors less often or engage in other risky behaviors that increase their chance of stroke, Josephson explained.

He said the study emphasizes the importance of learning and quickly recognizing the signs of a stroke – such as weakness on one side of the body and dizziness – even for young people. Some treatments can only be used during a short “window of opportunity” after the stroke.

“We see patients all the time who have symptoms that are classic for a stroke… and those symptoms are not recognized as being stroke symptoms because of the idea that, ‘Well, that’s something that happens only to older people,’” he said.

SOURCE: http://bit.ly/TvQvpi Stroke, online November 15, 2012.

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Boehner sees no progress in fiscal cliff talks

WASHINGTON (Reuters) – House of Representatives Speaker John Boehner said on Thursday that “fiscal cliff” talks with the White House had made no substantive progress and criticized President Barack Obama and Democrats for failing to get serious about including spending cuts in a final deal.

Boehner said he was “disappointed” after a phone call with Obama on Wednesday night and a meeting with Treasury Secretary Timothy Geithner on Thursday moved the two sides no closer to an agreement to avert the tax hikes and spending cuts that will be triggered at the start of 2013 unless Congress intervenes.

“I’m disappointed in where we are and disappointed in what’s happened over the last couple of weeks,” Boehner, of Ohio, told reporters after a private session with Geithner at the Capitol.

“No substantive progress has been made in the talks between the White House and the House over the last two weeks,” he said. “There’s been no serious discussion of spending cuts so far, and unless there is, there’s a real danger of going off the fiscal cliff.”

Markets dipped briefly into negative territory on Boehner’s comments, continuing a pattern of gyration based on the latest utterance or headline about the outlook for an agreement to avert the fiscal cliff.

The tone was in sharp contrast to the one expressed on November 16, the last time Obama met with congressional leaders. Boehner then stood next to Democratic leaders and voiced optimism they could find common ground in fiscal cliff negotiations.

Complicating the debate on Thursday was a renewed fight over raising the U.S. debt ceiling. That explosive issue, which could have been handled separately in the spring, was thrust into the fiscal cliff fray on Thursday in an exchange between Republicans and Democrats.

Boehner said any debt limit increase needed to be matched or exceeded by spending cuts to be proposed by Obama as part of the cliff negotiations.

‘DEEPLY IRRESPONSIBLE’

White House spokesman Jay Carney responded by demanding that Congress go ahead and raise the debt ceiling as part of any year-end deal to avoid the cliff. To do otherwise, he said, would be “deeply irresponsible.”

The last partisan fight over the nation’s borrowing limit in 2011 was settled by a law that led directly to the fiscal cliff and to a downgrade of the government’s credit rating.

Geithner, Obama’s top negotiator in the talks, met with congressional leaders from both parties at the Capitol as the end-of-year deadline approaches to avoid the onset of $ 600 billion in tax hikes and spending cuts that analysts warn could push the U.S. economy back into recession.

The immediate issue is whether the tax cuts that originated in the administration of former President George W. Bush should be extended beyond December 31 for all taxpayers including the wealthy, as Republicans want, or just for taxpayers with income under $ 250,000, as Obama and his fellow Democrats want.

Republicans have said they are willing to consider new ways to raise revenue as long as Democrats and Obama agree to accompany it with significant spending cuts, particularly to entitlement programs like the government-sponsored Medicare and Medicaid healthcare plans.

“Without spending cuts and entitlement reform, it’s going to be impossible to address our country’s debt crisis. Right now, all eyes are on the White House,” Boehner said.

Boehner said Geithner and the administration had not offered any new plans during the meeting to break the impasse, while Senate Democratic leader Harry Reid said Democrats were still waiting for a “reasonable” proposal from Republicans.

Carney said the president had put forward “very specific spending cuts,” including some in the entitlement healthcare programs, but had not seen any movement from Republicans.

CRACKS IN REPUBLICAN RANKS

Despite a few cracks in Republican ranks, most notably from Republican Representative Tom Cole of Oklahoma, neither side has budged significantly in recent weeks from its position, leaving the markets and political analysts alike to grasp at wording nuances.

“I think unfortunately it seems pretty clear that the market is trading very much off the reading of the tea leaves on how these fiscal cliff negotiations are going,” said Eric Kuby, chief investment officer at North Star Investment Management Corp in Chicago.

In the absence of progress, or any realistic understanding as to when or if Republicans and Democrats might avert the cliff or come up with some deficit reduction agreement, prodding has started to come on a regular basis from business leaders as well as Federal Reserve officials.

New York Fed President William Dudley and Richard Fisher of the Dallas Fed, highlighted the problems that U.S. lawmakers were causing for both hiring and the economy with each day they fail to strike a deal to avoid a pending fiscal crisis.

Dudley said on Thursday that if it is not addressed, the economic contraction is likely to be larger than normal because interest rates are so low.

The post-election lame-duck session of Congress also has made clear that until the two sides get over the immediate tax issue, they will not be able to move forward on the serious discussions they desire on longer-term deficit reduction and tax reform.

Keeping the nation in suspense down to a white-knuckled deadline has become the rule rather than the exception for Congress in recent years.

Whether the risk has been a government shutdown or, as in the events that led to the fiscal cliff, default for failure to raise the U.S. government’s borrowing power, Republicans and Democrats have needed the pressure of time and possible disaster to bring them together.

(Additional reporting by Rachelle Younglai, Thomas Ferarro and Kim Dixon; Writing by John Whitesides and Fred Barbash; Editing by Peter Cooney)

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Rapper PSY wants Tom Cruise to go ‘Gangnam Style’

BANGKOK (AP) — The South Korean rapper behind YouTube’s most-viewed video ever has set what might be a “Mission: Impossible” for himself.

Asked which celebrity he would like to see go “Gangnam Style,” the singer PSY told The Associated Press: “Tom Cruise!”

Surrounded by screaming fans, he then chuckled at the idea of the American movie star doing his now famous horse-riding dance.

PSY’s comments Wednesday in Bangkok were his first public remarks since his viral smash video — with 838 million views — surpassed Justin Bieber‘s “Baby,” which until Saturday held the record with 803 million views.

“It’s amazing,” PSY told a news conference, saying he never set out to become an international star. “I made this video just for Korea, actually. And when I released this song — wow.”

The video has spawned hundreds of parodies and tribute videos and earned him a spotlight alongside a variety of superstars.

Earlier this month, Madonna invited PSY onstage and they danced to his song at one of her New York City concerts. MC Hammer introduced the Korean star at the American Music Awards as, “My Homeboy PSY!”

Even President Barack Obama is talking about him. Asked on Election Day if he could do the dance, Obama replied: “I think I can do that move,” but then concluded he might “do it privately for Michelle,” the first lady.

PSY was in Thailand to give a free concert Wednesday night organized as a tribute to the country’s revered King Bhumibol Adulyadej, who turns 85 next month. He paid respects to the king at a Bangkok shopping mall, signing his name in an autograph book placed beside a giant poster of the king. He then gave an outdoor press conference, as screaming fans nearby performed the pop star’s dance.

Determined not to be a one-hit wonder, PSY said he plans to release a worldwide album in March with dance moves that he thinks his international fans will like.

“I think I have plenty of dance moves left,” he said, in his trademark sunglasses and dark suit. “But I’m really concerned about the (next) music video.”

“How can I beat ‘Gangnam Style’?” he asked, smiling. “How can I beat 850 million views?”

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Associated Press writer Thanyarat Doksone contributed to this report.

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Former boxing champ Mike Tyson to take one-man show on the road

LOS ANGELES (Reuters) – Former heavyweight boxing champion Mike Tyson plans to take his one-man theater show on the road across the United States early next year.

Tyson, 45, made the announcement on ABC’s late-night show “Jimmy Kimmel Live!” on Tuesday.

“Mike Tyson: Undisputed Truth” is an autobiographical monologue performed by Tyson in which he reflects upon his tough childhood in Brooklyn, the absence of his father and his self-described “reckless and destructive” behavior. It premiered in Las Vegas in April and had a run on Broadway.

Tyson, whose reputation was boosted by a cameo in the 2009 hit comedy “The Hangover,” told Kimmel that his inspiration for the show came from a one-man performance of “A Bronx Tale” in Las Vegas.

The 23-date tour, which features the Broadway show directed by Spike Lee, is scheduled to begin on February 12 in Indianapolis, Indiana, the city where Tyson was convicted in 1992 of raping then 18-year-old beauty queen Desiree Washington.

Tyson, who at the age of 20 became the youngest world heavyweight champion, served three years in prison before restarting his boxing career in 1995.

He later became better known for his erratic behavior than for his prowess in the ring. Tyson notoriously bit off portions of opponent Evander Holyfield’s ears in a 1997 bout and publicly said he wanted to eat British champion Lennox Lewis’ children.

Tyson retired from boxing in 2006.

(Reporting By Eric Kelsey; Editing by Patrica Reaney)

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Researchers Warn: Don’t Mix Grapefruit, Some Prescriptions

Before you toss that gorgeous grapefruit into your grocery cart, think twice. Canadian researchers say that grapefruit plus some prescription medications can be deadly, or at least cause severe side effects.

Researchers from Ontario’s Lawson Health Research Institute first studied interactions between the fruit and certain prescription medications two decades ago. According to Medical News Today, the number of drugs known to cause heavy-duty side effects when combined with grapefruit has jumped from 17 to 43 between 2008 and 2012. A total of 85 drugs might have some type of interaction. Scientists attribute the big increase to new drugs and formulations.

The Mayo Clinic says in addition to grapefruit, other citrus foods like pomelos and Seville oranges can interfere with certain types of medications even when you ingest them at different times. The interaction occurs when chemicals in the food interfere with enzymes that metabolize certain drugs in the digestive tract. When the medication doesn’t break down properly, it can reach dangerous levels and cause serious side effects.

Among medications likely affected are some anti-anxiety, anti-arrhythmia, antidepressant, antihistamine, anti-retroviral, and anti-seizure drugs. Also on the list are calcium channel blockers, immunosupressants, and statins.

The Canadian researchers found that medications with potential interactions share a trio of traits: they’re administered orally; the enzyme CYP3A4 is tied to their metabolism in the gut; the amount of the medication that reaches the bloodstream unaltered is in the low to mid-range.

Among the most serious side effects are respiratory failure, gastrointestinal bleeding, and renal toxicity. Also possible are bone marrow suppression, acute kidney failure, and even death.

The U.S. Food and Drug Administration (FDA) offers tips for consumers who enjoy grapefruit products. Safety should start by asking a pharmacist or medical provider whether it’s all right to consume grapefruit products while taking a medication. If not, the FDA says it’s wise to also ask if other juices are allowable. Patients can also check the prescription‘s medication guide or sheet for a mention of grapefruit.

The agency suggests it’s prudent to read labels of non-prescription medications and check other juices in the home to see if they contain products made from grapefruit, Seville oranges, or tangelos.

I had to give away a gigantic pink grapefruit a few years ago. As a patient on the same drugs for Crohn’s disease for years, I had become lax about reading patient inserts. As I left my surgeon’s office, he wished me happy holidays, then cautioned me against consuming any alcohol, even in fruitcake, because of one medication. When I mentioned buying the pink grapefruit, he quickly told me it wasn’t allowed either.

The potential interaction from mixing grapefruit and some prescription medications should be a wake-up call for those of us who cavalierly toss product inserts, unread, as soon as we open a prescription.

Vonda J. Sines has published thousands of print and online health and medical articles. She specializes in diseases and other conditions that affect the quality of life.

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The Needless Tragedy of Student Loan Defaults

For the first time on record, the delinquency rate on student loans has jumped above the rate for credit cards, car loans, or any other kind of consumer loan. The tragedy? Many of those loans will default, with stunningly harsh consequences, even though there are many good options for debt relief—deferment, forebearance, or reductions in monthly payments.

“There is actually no rational reason for a borrower to be delinquent or default on their loans,” says Mark Kantrowitz, president of MK Consulting in Cranberry Township, Pa., and operator of the FinAid.org website.

Borrowers who are unemployed, in the military, or back in school can ask for up to three years or full or partial deferment on repayment of a federal loan. For those who have a job but don’t earn enough to cover the monthly payment, there are six options: graduated repayment, extended repayment, income-based repayment, income-contingent repayment, income-sensitive repayment, and pay-as-you-earn repayment. In other words, the federal government will do just about anything to keep borrowers from giving up and walking away completely.

If that’s the carrot, here’s the stick: Defaulting is “like a trip through hell with no light at the end of tunnel,” says Kantrowitz. The federal government can garnish up to 15 percent of a borrower’s wages, Social Security disability, and Social Security retirement income without a court order. Unlike other debt, student loans can’t be discharged in bankruptcy. Collection charges of up to 20 percent can be skimmed off the top of payments—enough to turn a 10-year loan into a 19-year loan. To say nothing of the lasting damage to a borrower’s credit score, which will make it hard or impossible to get a credit card, auto loan, or mortgage.

And, oh, by the way, if you win the lottery, the first winner from your windfall is the Education Department.

With that kind of downside, why do so many people default on their student loans? Some may not understand their options, or put off dealing with the problem. Also, research shows that many borrowers consider their student loans illegitimate and don’t feel they should have to pay them back. In fact, default rates are four times as high for dropouts, who presumably feel they didn’t get their money’s worth.

There’s a cyclical factor, too. The Federal Reserve Bank of New York reported on Nov. 27 that the percentage of student loan balances that were 90 or more days delinquent rose to 11 percent in the July-September quarter, higher than the delinquency rate on credit cards since the survey began in 2003. The spike comes at a time when youth unemployment remains historically high. Even for those with jobs, people are paying ever more money for educations that don’t equip them for jobs that pay them enough to cover their debts, as I wrote earlier this year in “Debt for Life.”

At the same time, delinquency rates on credit cards, auto loans, and mortgages have been falling because bad credit has been washed out of the system. There’s no such cleansing mechanism for student debt, which now totals $ 956 billion in outstanding loans, according to the New York Fed. The federal Consumer Financial Protection Bureau, using different methodologies, says student loan debt passed the $ 1 trillion mark sometime last winter.

Then there’s the fact that some of these student borrowers were probably lousy bets for repayment in the first place. The federal government, which holds 85 percent of outstanding student debt, doesn’t make loans to students based on their ability to repay them. That may sound crazy, but it is designed to ensure that students of all backgrounds and income levels get a shot at a college degree.

That willful blindness also sets up the government for huge losses. The purpose of the draconian punishment for defaulters is to make up for the lack of sound underwriting on the original lending. Clearly, though, the threats aren’t working—and neither are the multiple repayment options the government offers.

Businessweek.com — Top News

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Rugby-England add flyhalf Burns to squad for All Blacks’ test

LONDON, Nov 27 (Reuters) – England called up uncapped Gloucester flyhalf Freddie Burns on Tuesday to their squad for Saturday’s test against New Zealand in place of the injured Toby Flood.

Flood sustained ligament damage to a big toe during the 16-15 loss to South Africa at Twickenham last Saturday.

Owen Farrell, whose last start was in the first test in South Africa this year, is set to replace Flood in the starting XV against the world champions.

Lock Courtney Lawes, who missed England’s first three tests of the November series because of a knee injury, has also been included in the 23-man squad. Two other locks, Mouritz Botha and Tom Palmer, have been omitted.

After beating Fiji in their opening match, England have lost to Australia and the Springboks and now face a daunting match against the All Blacks who are unbeaten in 20 tests since the start of their victorious World Cup campaign last year.

“For those in Saturday’s squad the message is clear – last week we went toe to toe with the second best team in the world and felt we should have won,” England head coach Stuart Lancaster said in a statement.

“Now we have a chance to take on the number one side in front of a passionate Twickenham crowd, who have been fantastic throughout the Internationals, and it is a challenge we will meet head on.” (Reporting by John Mehaffey; Editing by Ken Ferris)

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