This week, US Sen. Elizabeth Warren made a bold proposal to pay off most of America’s student loans, while initiating a Universal Free College plan. As is typical with Democrats, she of course proposes to pay for the grotesque cost of such a proposal — about $1.25 trillion — by taxing those vile, evil rich people hoarding all of that cash that she so desperately wants controlled by the government.
The plan is unjust, immoral, and worth of being relegated to the ash heap of horrible ideas proposed by quixotic political candidates. It more or less financially punishes people who acted responsibly and massively sacrificed to make good on debt they took, in favor of others who in many cases acted irresponsibly (or at the least irrationally) and want to absolve themselves of the burden of repaying the debt they chose to incur.
But set aside those perverted, warped incentives for a moment. Set aside how foolish and wrongheaded I think the concept of cancelling debt like this is. Crazy as the proposal is, it is animated by a real sentiment that we need to come to grips with.
That sentiment is driven by a simple truth. The cost of college is out of control, the debt undertaken by millions of young people in this country is insane, and the payoff that was promised to those young people for the debt they are incurring for the degrees they are earning is not there.
Failing to acknowledge those facts and attempt to address them is just as foolish as Warren’s proposal. It is important to remember that major political revolutions — both peaceful and bloody — do not necessarily happen when things are bad. They happen when expectations are unmet.
So what is the expectation, and why is it unmet? Well, let’s start with the basic reason we got here in the first place. Almost universally, for generations now, we have been telling our children (and believing ourselves) that obtaining a college degree — any college degree — is not only a passport to middle-class prosperity, but also dramatic increases in future earnings.
Yet neither of those things are true for millions of young people today.
Do not mistake me, getting a college degree is, in fact, an important step in many people’s lives in getting them a good job with good earnings. This is particularly true for the nation’s doctors, lawyers, and engineers, among many other highly technical professions.
But is it a universal passport? Obviously not. Does it guarantee solid earnings? Obviously not. Most of the statistics you read that say otherwise are incredibly misleading, and people have been living through the realization of that for the past decade.
Consider a male millennial born in 1990. He graduated from high school in 2008, right as the worldwide economic system collapsed. Perhaps one of his parents lost a job, and his family’s ability to afford things got harder. Capitalism, to him, seemed to be failing around him.
Then consider what else he saw. Banks getting bailed out. Trillions of dollars spent on corrupt cronies in big businesses with a cozy relationship to the government. Poorly run auto manufacturers getting bailed out. Meanwhile, the cost of a college education had been growing for years, and the passport he was told he needed cost a lot more, and he decides to take out more debt to get that passport.
Now this person is entering adulthood and is paying back that debt, which coupled with the poor economic prospects he saw after graduation are conspiring to make it difficult to afford a wedding, any vacations, a home and certainly children. He would like all those things, and those things were always the signs of prosperity to Americans for generations. Now they feel out of reach.
All the while, the corrupt plutocrats in business and government get bailouts and protection.
You don’t think it is at least logical and rational for this person to be unhappy and interested in hearing about the albatross being lifted off their back, and them receiving some of that bailout they’ve seen everyone else get around them?
This is a powerful sentiment, and it is real. We need to come to grips with that as we try to seek actual policy answers to these societal issues. Because if we don’t, it will only be the Elizabeth Warrens of the world that will have anything to say to millions of Americans about one of the most motivating issues of their lives.