Column: Investing in capitalism and the American student
Congress voted to increase student loan rates again, but that’s not the problem. The current system should be overhauled to provide an investment in Americans seeking to contribute to the economy.
Jul. 08, 2014
The opinions expressed by The Maneater columnists do not represent the opinions of The Maneater editorial board.
They went up again, and again they will smother us. Congress voted to increase federal student loan interest rates, and while it is a mere 0.8 percent hike, the problem lays not in the number, but the principle.
As students, we pay large sums of money, the mean amount somewhere around $30,000 a year, to attend college. Then to pay for those large sums, we take out loans, which we repay in even larger sums. While we do that, we fight in a hopeless job market, pay off credit cards and cars bought on credit and try to establish credit only to pay off a mortgage.
In short: we invest everything short of our lives to even have a shot in the economy. Wouldn’t it makes sense for that economy to invest in us?
While Republicans or fiscal conservatives might label this as socialism, I do not at all. If the government paid for the tuition of the 21 million college students enrolled in 2011, according to ed.gov, it would cost some $630 billion. Which, yes, is a lot of money. If the defense budget was cut in half, the government would still fall $130 billion short.
Here, I argue there is still a reason to do just that.
Cut the defense budget in half and cover $500 billion in college education. That’s $120,000, at least, that every undergraduate student would not have to worry about. That’s $120,000 that can be invested in the economy and go towards those credit cards and houses and such. More importantly, the $120,000 will create more demand, and with more money in people’s wallets, the return effect will be more production, meaning more jobs. With new jobs, the cycle only grows.
When the cycle grows, so does tax revenue. This will aid the economy, and make it so that money isn’t what deters American students from being successful either in school or in the workforce. It’s not giving anyone anything. It’s not socialism. It is providing a solid platform, and investment, for American students to make a return on an investment in the American system.
The downside is, yes, there will only be $500 billion in the defense budget, only outspending China, number two on the list, by only $325 billion. But at least we’ll be able to send Americans to school and into the rigors of the capitalist world with a fighting chance. Then perhaps, we could find money to support the veterans who fought in the Arab Spring for us.
While the rich support tax cuts, they’re supporting driving the low into the depths of hopelessness when many of the business principles they built their wealth on call for a small investment in any startup company. When an American will make between one-to-two million dollars in their lifetime, a $120,000 investment will pay more that tenfold. There is no reason not to trust that business model.