Copyright © 2011 by P. A. Ritzer
7 September 2011
I have been itching to write this piece for years.
The solution: End federal student loan programs!
And I have been hoping to see that solution enacted since the end of my college education so many years ago.
When I stood face to face with the debt I had accumulated during four years of college–which is nothing compared to what students face today–all I could think was: What a racket! Did they ever see us coming. The school has got the money; we students owe the money; the deep-pocket lender–either the government or the government-backed lender, ultimately the taxpayers–is owed the money. It was all just a matter of course. If you wanted to go to college, even if you were paying your own way, your parents filled out the financial-aid papers, and then you got your package of scholarships, grants, and loans. Take those loans out of the picture, and how much less expensive might college be.
Consider a hypothetical case. Say Vernon owns a shoe store. It has been in his family for generations in the same neighborhood. He sells his shoes for $30 a pair. Considering supply and demand, it is a fair price. Shoemakers get a reasonable profit from making and selling their shoes. Customers get a reasonable price for a quality pair of shoes. Vernon makes a reasonable profit, and he and his employees make a fair living.
Now liberal politicians–who are never more liberal than when spending other people’s money–decide that everyone should have a pair of shoes; so they pass the Federal Shoe Loan Program. Everyone who qualifies can borrow up to $30 for a pair of shoes, the loan backed by (or owed to) the federal government. Up to this point, people had shoes according to what they could afford. They budgeted and saved for them. Some had better quality or more expensive name brands, but people had shoes. For those few really destitute people who could not afford shoes, the churches, synagogues, and other local organizations–to which Vernon and his fellow citizens freely contributed–helped them out.
The day the Shoe Loan Program was passed, Vernon knew one thing: the price of his shoes had just rocketed up to as much as double what it had been. The day before he was making a living selling his shoes at $30 a pair, now loans for shoes are available for up to $30. The person who could afford $30 yesterday, now has another $30 available to him. It may be that the price does not double overnight, as it will take some time for the effects of the loans to make their way all through the market, but Vernon’s price will begin to rise immediately, and more over time, to catch up with the artificial inflation the loans brought to the market.
Of course, to liberal politicians, generous as they are with other people’s money, Vernon is a cruel, selfish capitalist. But wait. He has costs too. And once the market detects the inflation, artificial though it may be, his costs are also going to rise. Why? Because now that people have $30 more to spend on shoes, until the price of shoes sops up all of that extra $30, they will have whatever of that $30 that does not go to shoes to spend on other goods and services, and prices will respond by going up. And they will be going up for Vernon too. The shoemakers will know there is more money to spend on their products, and so they will raise their prices. So will Vernon’s grocer and dentist and podiatrist.
Ultimately, the borrowers will owe the money, the lenders will be owed the money, and the government will be backing those lenders, which will add another cost in the form of taxes to cover for those who will default on their loans. So the taxpayers are rewarded with one more opportunity to pick up the tab. Are not the liberal politicians who love to spend other people’s money wonderful. What a slick way to play the savior while facilitating the steep rise in the price of a product and passing on the costs to the citizens who keep voting for them because they are so generous, loving, and good. And keep in mind, with the increase in the price of shoes caused by the artificial inflation, the $30 will no longer buy a pair of Vernon’s shoes. So, those who vote for liberal politicians will demand higher loans, and the liberal politicians will supply them, which will cause more inflation, which will require higher loans, and on and on and on.
Now apply it to college. With all that easy student-loan money, is it any wonder that between 1982 and 2010 college tuition and fees rose more than 4 times the growth rate of inflation (439% to 106% [consumer price index])? Or look back even further. When my mother received her full-tuition scholarship to a private women’s college in the Midwest for the years 1946-1950, tuition there was $150 a year. Today, tuition at that same school is $31,360 per year or higher, over 200 times what my mother paid 60 some years ago. To put that in perspective, compare it to a book I found on my shelf. It was published in 1952 and sold for $4. If a comparable book sold today at the same rate of inflation as the tuition at my mother’s alma mater, a new copy would cost over $800. Instead, a comparable book can be purchased today for less than $30.
And with students graduating (or not graduating) from college with so much debt, there is another cost that redounds to the liberals’ advantage. That cost is the loss of entrepreneurship. At a time when a person might be best situated to take a considerable risk, when he is most likely to be unmarried without dependents, when he might be most willing to live hand to mouth out of his car so that he might apply his singular talents to the realization of an idea or dream, he will now be saddled with so much debt that he cannot even consider pursuing such a venture. Instead he will need to take his place as a cog in the system that the liberals are forever constructing of faux-compassion components like government student loans, the system that facilitates liberals’ control over other people that is their motivating principle. And by placing young people in such a position, liberals neutralize the most independent, those who pose the greatest threat to their control. And liberals also neutralize the threat of the talents and aspirations of those who may be more talented and aspiring than themselves.
Now apply the same reasoning to other faux-compassion programs that liberals have foisted upon us, programs that enhance their power and control and increase our taxes and debt.
Where does illegal immigration fit in? Bear with me.
(to be continued in Part Two)
