Economic and political difficulties — especially issues of justice — are on my mind, as always. Guess I’ve been reading too many scary books about economics and the jobs outlook.
What is the outlook? In developing countries, manufacturing that’s always on the move, stalking the cheapest labor. In Western countries, an abundance of jobs for machines, robots and computers; for human beings, not so much.
Why do I have this sinking feeling that American politicians don’t understand the situation?
Today I wrote a comment on another blog that seems both concise and spot on (I say humbly). And so I’ll quote myself:
“Sustainability of Medicare and Social Security in the U.S. depends in large part on our capacity for intergenerational justice.
People in their teens, 20s and 30s are being fleeced. They’re overcharged for education that turns out to be worthless, leaving them in virtual debtors prison. The future seems to offer few jobs and meager income.
We need to forgive educational debt and create useful work. The free market will not or can not do it. Government will have to find a way.”
Like I say, too many scary books.
— John Hayden
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- The young, educated, and massively in debt college generation: Total student debt outstanding approaches $1.1 trillion. 65 percent of all outstanding student debt held by those 39 and younger. (mybudget360.com)
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Living Simply And Still On The Grid 
I think John this status is not just in the USA… here too in the UK… Clue-less is a good word but I am sure there are many more to describe how out of touch those in heads of state and parliament are with the grass-roots of the Real People whose hard graft keep their countries afloat..
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Yes, I think the impact of the new economic reality has hit Europe first. It’s just now coming to America, and most Americans are in denial. The leaders of many countries in Europe have already embraced “austerity,” to one extent or another. That is, austerity for the masses of common people, who are expected to suffer so that financial and corporate elites can continue to enjoy privileged status. Politicians are much more connected with finance and corporations than with ordinary voters.
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You are so right about clueless politicians.And about passing debt to the children.
Watch this YouTube video. Funny and sad…
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Thanks for the great video, Mark. It really is funny and accurately reflects life. In fact, the main reason so many ordinary people are in debt is because the credit card companies keep raising the “credit limits” on credit cards, as long as people keep paying the “monthly minimum.” Over time, this creates an unreal expectation of easy money and a habit of living beyond our means. It’s an addiction created by manipulating credit limits and monthly minimums.
But the video’s points about “debt limit” don’t apply as neatly to the U.S. government debt, which differs in important respects from credit card debt. The money supply for the government and the economy at large is really quite elastic. The opposite is true for individual workers.
The money supply for the average individual is limited to wages. For many decades wages were generally rising. But that’s over. The new normal for individuals is stagnant wages or falling wages.
The banker in the video does make one crucial suggestion that’s applicable to both individuals and government debt. “Have you thought about INCREASING YOUR INCOME?”
Conservative politicians say that families respond to an unbalanced budget by reducing family spending, and government should do the same, REDUCE SPENDING!
But what conservative politicians say is not true. For both families and governments, it’s quite painful to reduce spending, less painful to increase income.
When a family has an unbalanced budget, the first thing the family does is look for ways to INCREASE INCOME. The primary wage earner tries, if possible, to work more hours, resulting in either overtime pay or a salary increase. A second, third, or fourth member of the family enters the work force to bring in more money. Families increased their income in these ways for many years. But the situation has recently changed. In the new normal, working more hours no longer brings in more money; and at least one member of the family is often unemployed, not able to find paying work.
But the point about INCREASING INCOME, rather than REDUCING SPENDING, is still valid for government. There’s still plenty of room for the U.S. government (and many European governments, I suspect) to increase income by raising taxes on the wealthy (feel free to use your own definition of “wealthy”) and by closing tax loopholes (privileges) for corporations.
But the wealthy and corporations prefer to impose the pain of austerity on average families.
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Bernie, my college education cost my parents less than $2000 a year in the early-to-mid seventies for a private, Catholic college. Although that is about $6600 in today’s money, it is so much more reasonable than what families are being forced to pay today. My graduate degree was free and they paid me a stipend because I was a teaching assistant. What has happened to higher education? When I went back to school to become an RN I was able to achieve that goal with a degree from a community college very cheaply. The BSN degree that I earned in 2011 cost me more than all my other education combined (about $400/ credit), and that degree was earned at the same college at which I had earned my original BA! I don’t know how anyone can afford college today unless they come from a wealthy family. Since higher education is so often job training now, there must be some other way. Few people go to college to become well-rounded, well-educated persons anymore. In the “olden days” a college grad had proven that they were able to learn and could be taught almost any job; now you must leave college ready to jump into complex positions with only a very narrow learning curve permitted. What a shame.
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Thanks Theresa! You’ve provided excellent perspective. My college education in the late 60s and early 70s was paid for by my part-time jobs, supplemented by a 50-50 split of federal student grants and federal student loans. In those days, the grants didn’t have to be paid back, and I was left with only a small debt when I graduated. Most recently the grants were called Pell Grants, and far as I know, they’re no longer available.
I believe we should open state medical and nursing schools based on the model of the military academies. That is, highly competitive entrance requirements, free tuition, and the students are paid a small stipend. In return, the doctors, physician assistants and nurse-practitioners get good jobs with good salaries upon graduation, doing work that serves the public. After six years of service, they’re free to go into private practice if they wish.
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Guess I will have to disagree with you here John. Young people need to be told “NO” when they want to go away to expensive colleges -instead of going to an in state university. College is still affordable if the student goes the community college route with a transfer to a 4 year program. Big debts do not have to be incurred.
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Yes and no. Many students, especially the best students, are
sold the bill of goodsthat a degree from a big-name university is much more valuable over a lifetime than a degree from a generic state university.[Second thoughts: Actually, I have little doubt that the big-name degree opens doors and gets your resume to the top of the pile. I also have little doubt that some students waste their time at big-name universities and gain little. But for the well-prepared and motivated student, a great education at a name university is most likely well worth the investment. In addition, the great universities also skim the very brightest students from every economic level by offering financial aid. My guess is that the elites in almost every area of government and business are mostly people with degrees from these universities.]
I agree that many students are well-served by community colleges and state universities. That’s how I got my education 🙂 But come to think of it, look how I ended up! 😦
Community college costs vary by jurisdiction and they’re the cheapest way to go, but full-time community college tuition can be a considerable expense. And tuitions at state universities have been soaring.
If I were a candidate for state or local government, I’d propose that two years of community college be nearly free. Many community college programs provide technical training for the local business community, and the costs should be underwritten by business through taxes or direct support to the community college.
For full-time students intending to transfer and pursue a four-year degree, community colleges should impose small fees to weed out the students who aren’t serious.
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Loved the You Tube video but have to agree with Judy in regard to student debt. I have a hard time being too sympathetic with people who knowingly incur a debt they can’t afford and then cry poor when it comes time to pay up.
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I agree, Tom. On the other hand, many students feel they have no choice but to get the education at any cost. And then they find out there are no jobs or only low-paying jobs. Bait and switch.
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