THE YOUNG LEFT
Is It Time for a Student Loan Bailout?

With more and more evidence showing that our economy isn’t about to rebound on its own – that we will need some type of stimulus in order to spur growth – progressive economists have outlined a slew of ideas on how to give our economic engines a boost: worker training programs, payroll tax cuts, direct hiring programs, etc.

One idea I haven’t heard, though, is that it might be time to give some type of additional assistance to the millions of younger Americans who are drowning in student loan debt.

Americans now owe more than $900 billion on student loans. For the first time ever, that number has surpassed the combined total that we owe on credit cards.

The average graduate now leaves college with more than $24,000 in debt.

Between federal and private loans, my own monthly payments are in the neighborhood of $300. And I consider myself lucky. Many young people are paying significantly more, giving up huge chunks of paychecks that might otherwise be put back into the economy.

Even if the assistance was not centered on something as generous as full or partial forgiveness, a temporary relief program could still free up income and stimulate demand, possibly with a large multiplier effect.

Think about it.

How many newer graduates – those with decent jobs but large monthly student loan payments – might trade in their old vehicle and purchase a new car if student debt was more manageable?

How many younger homeowners are putting off basic repairs – roofs, siding, plumbing, etc. – that could create jobs for a residential construction industry that is still in dire need of a boost?

Or, to take things one step further, how many new families have ruled out a home purchase because of lingering student debt?

Putting homeownership back into the reach of younger families – and doing it responsibly through a restructuring of student debt, rather than reckless mortgage lending – could prove invaluable for a sector that has struggled to recover.

Even smaller purchases, if made by a large number people, could provide a huge stimulus. We are, after all, among the people who are most likely to actually spend additional income.

With even a $30 or $40 reduction in monthly payments, I might buy more food from my farmers’ market rather than my big-box grocery store. I might purchase a gym membership or renew the newspaper subscription that I was forced to cancel. I might even save for a couple of months and then splurge on a flight to visit friends and family.

Most of us went to school and borrowed money understanding fully well that we would need to pay it back, and that those payments would often be difficult. I don’t think anyone is asking for a free ride.

But at what point do we have to recognize that student loan debt has essentially become the ball and chain that is holding back an entire generation?

How many would-be homeowners and entrepreneurs have been deterred by crushing debt burdens? How many otherwise successful workers – well-educated and with decent incomes – are living more like the working poor due to unmanageable student loan payments?

We’ve bailed out the banks and the automakers. We’ve extended tax cuts for the wealthy and renewed unemployment insurance for the out-of-work. And, however futile, we’ve at least attempted to stave off the tide of foreclosures by restructuring underwater mortgages.

Maybe it’s time to consider similar assistance not only for those who are now overwhelmed and encumbered by student debt, but also for the future students for whom borrowed money will open the door to higher education.

Not only our future economic soundness, but the very soundness of our democratic institutions, depends on the determination of our government to give employment to idle men.
Franklin Delano Roosevelt
American Idle

idle (adjective): (esp. a machine or factory) not active or in use : assembly lines standing idle for lack of spare parts

  • (of a person) not working, unemployed
  • [attrib.] (of time) characterized by inaction or absence of significant activity

The steamy months that marked the one-year anniversary of our “Recovery Summer” are now drawing to a close. But for millions of Americans, it seems that not much has changed since the Great Recession was proclaimed to have ended.

It was a recovery that brought no recovery, except perhaps for the stock market – which is now backsliding – and for cash-rich businesses that decided to hoard rather than hire.

For the better part of a year, politicians have told us that they intended to shift their focus to “jobs, jobs, jobs.” This infamous pivot was originally scheduled to occur after healthcare reform, then after the extension of the Bush Tax Cuts, and now – supposedly – after the debt ceiling debacle.

But even if the focus truly does shift, the agenda that is now on the table is likely too miniscule and incoherent to make a real difference. And that’s the best-case scenario.

At worst, with the President and his advisors now pushing free trade agreements as the cornerstones of their plan, the current jobs agenda may kill more jobs than it creates: The Economic Policy Institute has projected that the ratification of trade deals with Colombia and South Korea could displace as many as 214,000 U.S. workers.

Our infrastructure is crumbling. Our factories are idle. Our people are unemployed.

But Washington seems content to do nothing, to take only baby steps, or to enact policies that are blatantly contradictory (i.e. a payroll tax cut to stimulate spending immediately after a debt deal that will drain spending out of the economy, basically working to cancel each other out).

The crisis we’re facing is not just a fiscal deficit, or even a jobs deficit.

More than anything, it’s a leadership deficit.

The President has all but refused to make the case for investments that would help to grow our economy – and ultimately reduce our debts – over the long-term. He’ll speak in vague platitudes about “winning the future,” but he won’t face up to the citizenry and tell us that we’ll have no future at all if we continue to neglect our infrastructure, our education system, and our environment.

Instead, and despite strong evidence that he knows better, he either pretends to be a deficit hawk or seeks to remain “above the fray,” not wanting to dirty his hands before a reelection bid.

Republicans, on the other hand, are singularly focused on appeasing Tea Party radicals. This fringe of angry lunatics may have once represented a minority of the GOP, but their power has grown to be so immense that experienced and once-sensible Republican lawmakers are now bowing down and kissing the rings of obstinate freshmen with minimal understanding of government or economics.

As such, House Republicans have wasted months on such follies as defunding Planned Parenthood and ordering hearings on “the radicalization of American Muslims.”

And while Senate Democrats have at least acted as a firewall against some of the most fanatical legislation to emerge from the House, they have mostly been too paralyzed with fear to propose any major actions of their own, what with 23 of the caucus’s seats facing reelection in 2012.

This status quo simply cannot be maintained.

Any large-scale agenda to create jobs, empower workers, and rebuild our country will no doubt face savage opposition from those who are determined to obliterate our safety net and starve our government into nothingness. 

But as Franklin Delano Roosevelt once said, “Not only our future economic soundness, but the very soundness of our democratic institutions, depends on the determination of our government to give employment to idle men.”

Tax cuts and trade deals will not revive an idle giant.

It’s past time for bold leadership.

Made in America… But We’ve Got to Buy It

Made in America

It’s not unusual to walk into a grocery store and find organic sections and international aisles. 

For as long as I can remember, big department stores have always stocked seasonal areas: swimwear, sunscreen, barbecue grills, beach towels, picnic supplies, and everything you could possibly need for summer – or for any holiday known to man – all in one place, both for convenience and for promotional purposes. 

So why can’t we challenge retailers to do the same with items that are made in America?

According to the Alliance for American Manufacturing, we could create 200,000 new jobs if every American spent just $64 more on American-made products.

Gallup has also reported that huge majorities of Americans would be willing to spend more money to buy goods that are made at home, even if foreign equivalents were available at huge discounts.

In a survey that dealt specifically with cheap Chinese products, 94% of Americans said they would pay more for U.S.-made food; 82% preferred domestically made toys, even if they were more expensive; 76% were willing to dish out more money for American-made furniture; and 67% reported that they would pay more for household appliances that are made at home. A majority of Americans were also willing to pay more for U.S.-made electronics, clothing, shoes, and miscellaneous household items. 

Willingness, therefore, is not the problem. And, at least according to Gallup and our self-reported spending preferences, price differences are not a major deterrent when it comes to purchasing domestic goods, either.

So, with the economy essentially stalled and hundreds of thousands of jobs on the line, what’s stopping us from taking the plunge and doing our part to support American workers?

In my opinion, it comes down to convenience more than anything else.

How many of us take the time to read every label when we go to a grocery or department store? More often than not, we go in on a mission to grab what we need and then get out. We fall into routines and end up buying the same products and brands again and again.

That’s why we need Made in America sections at our retail outlets.

Imagine walking into a store and having an easy opportunity to browse a few aisles of domestic goods – and cross a few items off your shopping list – before moving into the rest of the store and finding the rest of what you need.

It couldn’t be simpler, but it might go a long way toward breaking up the routines that have too often resulted in carts full of foreign products, usually due to obliviousness more so than some deep desire to buy products from China.

With political leaders now squabbling over how to reduce the deficit – rather than how we should invest in future growth – the likelihood of a government-led stimulus is small.

But what if our citizens and elected leaders came together and challenged retailers to show their patriotism by promoting products that are made at home?

It would cost nothing for taxpayers, and the impact on businesses could be minimized. In many cases, it might require little more than some rearranging of goods.

And if any major retailer were to sign on, others might feel pressure to do the same: Companies, after all, would likely find some way to use the story as a public relations boon that could help to build customer loyalty.

Given our urgent need for job creation and the unwillingness of Washington to take any major action, it seems to me that ideas like this might be one way to inject some stimulus – however small – into a struggling economy.

As importantly, it might start to show America’s workers that someone in the country – a business, a politician, a neighbor – actually cares enough to act.

Making the economy weaker now will also hurt its long-run prospects… Those demanding spending cuts now are like medieval doctors who treated the sick by bleeding them, and thereby made them even sicker.
Paul Krugman, The New York Times
Tea Party Spits on Constitution by Refusing to Compromise

Tea Party

When a wave of Tea Party representatives entered the House in January, the first action of their new majority was to publicly read the Constitution.

But, unfortunately, it seems they’ve chosen to willfully ignore a key part.

The founding fathers designed a governmental system with 3 branches: an executive branch that consists of the President and his or her administration; a legislative branch comprised of an upper and lower chamber; and the courts, which were designed to serve as a legal and nonpolitical check on our elected officials.

Republicans control one half of one of these three branches. The upper chamber of the legislative branch, as well as the executive branch and its veto power, still belong to the Democrats.

Our system was designed with the idea that situations like this would be common: that the lower chamber, consisting of smaller districts and more subject to temporary whims and sudden changes, would sometimes be at odds with the upper chamber, where each legislator represents an entire state and only faces reelection every six years.

Our government was set up so that legislators with competing interests would sometimes need to reach agreement. Rural Representatives might occasionally have no choice but to work with urban Senators, for example, to create bills that could clear both chambers.

This was intentional. The founding fathers wanted to force compromise on big issues, both between the chambers and between the parties.

Sure, a minority might sometimes get steamrolled. This is why we have courts – to ensure that the actions of the majority are legal – and hold elections every two years, thus giving citizens the power to elect new representatives who might eventually undo the actions of their predecessors.

But, in 2010, Americans chose not to give majority power to Senate Republicans.

Our government is therefore divided, just as the founding fathers knew it often would be. These were precisely the situations during which the creators of our democracy expected that compromise – like it or not – would have to rule the day.

So why, then, do Tea Party Republicans – who profess adoration for the Constitution and ought to now be well versed in the intentions of its authors – feel that their control of one chamber gives them unilateral authority to force their agenda onto the rest of the country?

In one week, America will reach its debt ceiling and our country will no longer be able to borrow the money that we need to pay bills we’ve already incurred.

Rather than simply raise the borrowing limit – as we did 18 times under Ronald Reagan and 7 times under George W. Bush – the GOP has demanded that we tie the increase to spending cuts.

Democrats agreed and offered generous deals, including a $4 trillion debt reduction package made up of 70% spending cuts and 30% revenue increases, and a $2.7 trillion debt reduction plan that consists entirely of cuts with absolutely zero increases in revenue. 

But despite the fact that they control only one half of one branch of the government – just to reiterate that point again – Republicans have instead opted to essentially throw temper tantrums and push us closer each day to defaulting on our debts.

The system of checks and balances – carefully crafted by our founding fathers – no longer matters to irate and obstinate Tea Party representatives, who want to be the unilateral, dictatorial determiners of American policy.

They have walked away from the negotiating table, moved the goal posts again and again, and blatantly refused to cooperate with the executive branch or the upper chamber.

With America teetering at the edge of a national crisis, they have abandoned the fundamental principle of compromise.

In doing so, they spit on the Constitution that they claim to revere.

From “Rich People’s Taxes Have Little to Do with Job Creation” by Michael Linden at the Center for American Progress. 

From “Rich People’s Taxes Have Little to Do with Job Creation” by Michael Linden at the Center for American Progress. 

Senator Bernie Sanders invites citizens to co-sign a letter asking that President Obama hold strong against the GOP’s demands that we slash spending while preserving tax cuts and loopholes for the wealthiest individuals and corporations. 

We can have democracy in this country, or we can have great wealth concentrated in the hands of a few. But we can’t have both.
Louis Brandeis, U.S. Supreme Court, 1916-1939 

“There’s no difference between a janitor and a judge, and that’s what our party is about.”