Tuesday, June 09, 2015

How student debt depresses the economy

It would seem that housing prices are on the rise, but they are going to run head on into a massive wall: student debt. According to USAToday, total student loan debt is estimated to be $1.2 trillion for everyone who has a student loan. Banks are aware of the trend since they're in the best position to help stem the tide. But given the attitude of Congress in the last few years, like passing laws that exclude student loans from bankruptcy, there is no sign of abatement.

While we're loading our students up with debt on the way out from college, let's look at the mood on the internet:

Isn't that something called usury? Banks just love this. How about this one?:

Remember, some of these kids will run for office and they will assume that debt is normal. They are probably not Keynesians. But then there is this one:

This last graphic says it all. We went from a society where the kids can go to college, get a job in their career choice and leave college with little or no debt. They could even buy their first home, finish up college and start raising a family.

Remember that wall of debt? That is what we have led our children into, thinking that somehow, debt will build character, that they will earn the money they need to pay off the loan if they work hard. There are many people with two or three jobs out there, trying to make ends meet. They don't have time for family, much less the money to buy a home. They are working hard, very hard.

Given the sentiments out there, and the general knowledge among those who care to look, that a few European countries provide free education to anyone who wants it, a revolt on the debt seems likely. Consider this article in the New York Times, "Why I defaulted on My Student Loans". It is a fascinating tale of revolt against usurious banks, their collection agents and the decision to just give up. I know some people with tremendous student loans and no means to pay them back, despite their coveted degrees.

A free and prosperous people must be educated, or they will not remain free. Why not? How can they possibly read the contracts they sign or click through on the computer and know what they mean? How can they know the meaning of the laws their supposed leaders will write for them? How can they get a job and comprehend the technology they're going to use without an education?

Not everyone is a brainiac, capable of learning anything anytime. Not everyone has the talent, discipline, luck or connections to start a business, become an athlete, musician or actor, with success. This is why we need free public education for everyone. $60 billion a year will give that to everyone who wants it. I'll leave you with one more meme:

This last meme shows the priorities of the Reagan Revolution. When we voted "Grandpa" into office, we had no idea what we were getting into. Student debt is no way to create a thriving culture, capable of solving the problems we face and meeting world class competition head on. And it is certainly no way to revitalize the housing market, unless of course, you're a landlord. Then it's cool, right? 

Loading up our kids with debt is the road to serfdom.
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