Sam Bowman is quoted in The Freeman on Britain’s student debt problem

Research Director of the Adam Smith Institute, Sam Bowman, was quoted in The Freeman on Britain’s growing student debt problem.

The core difference between the British and American systems lies in the terms of repayment. American students typically have to start repaying 6 months after they graduate. Opportunities for loan forgiveness are extremely limited, and loans cannot be discharged via bankruptcy. By contrast, British students don’t have to start repaying until they are earning £21,000 ($36,000) per year. They must then pay 9 percent of their gross income as long as they stay above the threshold. Their outstanding balance is automatically forgiven 30 years after it became eligible for repayment. Also, the loans do not appear on their credit report.

“The thing people worry about with debt is that they won’t be able to pay it back. The way this is structured means that is not a worry ever, and it doesn’t follow you around until your old age,” says Sam Bowman, Research Director at the Adam Smith Institute, a free-market think tank.

Bowman finds it helpful to understand loan repayment as a tax. “You can either think of it as a graduate tax or it’s the best debt in the world,” he says. “It makes sense to think of it as a graduate tax, a specific kind of tax on a specific action that is designed to offset the cost of that action.”

Read the full article here.

“Sweet FA – Why foreign player crackdowns hurt English football” is featured in The Telegraph

A new report from the Adam Smith Institute – “Sweet FA – Why foreign player crackdowns hurt English football” – is featured in The Daily Telegraph.

Greg Dyke’s plan to cap the number of foreign players in English football has been denounced by The Adam Smith Institute, which claimed there was “practically no relationship whatsoever” between that and the performance of the England team.

A report by the influential think tank also warned that artificially limiting the amount of overseas talent in the Premier League would harm its clubs’ ability to compete in the Champions League and Europa League.

One of the key recommendations of Football Association chairman Dyke’s commission on English football this summer was a limit on the number of non-European Union players in the English game, which, it was claimed, would increase the number of England-qualified footballers.

The received wisdom has been that a bigger domestic talent pool is the panacea to the national team’s travails at major tournaments, a view directly challenged by research conducted by the Institute’s head of policy, Ben Southwood.

Read the full article here.

The report, written by ASI Head of Policy Ben Southwood, finds that the Football Association’s plan to crack down on foreign players in the Premier League would damage the league’s quality and success in European club competitions, without any benefit to the English national team’s performance.

Read the full report here: “Sweet FA – Why foreign player crackdowns hurt English football”

Sam Bowman argues the Eurozone is facing a lost decade in the City AM Forum

Research Director of the Adam Smith Institute – Sam Bowman – argues that the Eurozone is facing a lost decade in the City AM Forum.

Youth unemployment in Greece is above 50 per cent. All Italian growth in the last 15 years has been wiped out.

And Germany’s economy, previously healthy, shrunk in the second quarter.

Across the Eurozone, unemployment is above 11 per cent, and youth unemployment is above 23 per cent. These problems are likely to persist for many years, with youth unemployment leaving a lasting legacy of depressed earnings.

Europe’s profound supply-side problems, including restrictive labour laws and high taxes, still cannot explain why it slumped in 2011 as the rest of the world began to recover.

The reason is that the European Central Bank (ECB) has persistently undershot its inflation target, putting the Eurozone into a state of perennial near-deflation, with too little demand to get European workers into jobs. Only more inflation will change this.

A lost decade now seems inevitable. It is up to the ECB to decide how bad it will be.

Read both sides of the debate here.