An incredibly depressing piece from Rodger Malcolm Mitchell that I'm cross posting from his blog http://mythfighter.com/ about the sad state of our higher education debt racket:
"As readers of this blog know, the single biggest economic problem facing America and the world, is the increasing GAP between the rich and the rest.
Wolf Richter: This Chart Is The Fate of Housing In America As Student Loans Bankrupt A Whole Generation
Over 70% of the (college graduate) students have student loans. They will start their career, if any, with an average student loan balance of $33,000.
Even when adjusted for inflation, it’s about twice as much as 20 years ago. Back then, only 43% of students graduated with student loans.
After decades of red-hot tuition and fee increases, working your way through college in four years, has become a pipedream.
Briefly, this states two problems:
1. The increased cost of college
2. Federal lending rather than giving money, for education.
Though local governments are monetarily non-sovereign, and unlike the federal government, are limited in their ability to pay their bills, still they pay for K-12 education. They understand the need for education.
But K-12 no longer is sufficient in this increasingly sophisticated world. To compete today, America needs college-educated citizens.
In the July, 2010 post titled, “One step toward long-term economic growth: Government offer free college education,” we said:
In SOLUTION FOR THE GAP, I suggested that the long-term solution for unemployment was not for the government to be the “employer of last resort,” as Modern Monetary Theory (aka neo-chartalism) suggests, but rather for the government to be the “educator of first resort.”
That is, the government should pay not only for elementary, middle and high school, but also for college and advanced degrees. Further, I suggest that the government pay a wage for college attendance, to encourage the impoverished who might otherwise have to decide between work and education.
Low skilled jobs are disappearing from the economy. Those without an advanced education will be at an increasing disadvantage. Merely putting people to work in such jobs can indeed address a short-term money problem, but it can exacerbate future economic problems.
Someone earning a living wage as a Walmart greeter, may be less motivated or have less opportunity to attend college, and so forever be relegated to low-paying jobs or increasingly, no job at all.
While many people do not wish to attend, or do not have the aptitude for, college, the government should do everything possible to facilitate college attendance, as a way to prepare for the future economic growth of America.
From the standpoint of America, this makes perfect sense, but from the standpoint of the upper .1% income/power group it is an anathema. The current system, which combines unaffordable and growing college costs, with unpayable and growing student loans, is the perfect vehicle for creating a large and growing servant class for the .1%
It is a guaranteed GAP widener, which is why the “Ten Steps To Prosperity (below), includes these Steps:
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
Continuing with the Wolf Richter article:
Next year, the Class of 2015 (will be the most indebted ever). Among the reasons for this fiasco: the way colleges are paid liberates them from both free-market and governmental constraints. They can charge whatever they want and get away with it because students can just go ahead and borrow it.
And through the student loan programs, the government is simply aiding and abetting colleges in extracting ever more money from the future lives of their students.
There is not one economic reason — not one — why our Monetarily Sovereign federal government — a government with the unlimited ability to create its own sovereign currency — lends money to its citizens, rather than simply giving them money.
And to make a terrible situation even worse, these loans are far more difficult to discharge in bankruptcy than are other personal loans.
In effect, students are locked into a permanent “debtors prison” of the government’s making.
The entire program of high tuition plus student loans is a disaster based on the BIG LIE, the lie that the federal government’s finances are like personal finances, and that federal spending is unaffordable, unsustainable and will cause Weimar-style hyperinflation.
The problem we face is the absolute fact that the upper .1% income power group, and the politicians — perhaps the least patriotic people on earth — endorse the BIG LIE and create a widening GAP, both of which rely on an economically-ignorant public.
In America, the GAP destroys more middle- and lower-class people than guns, which is why the .1% loves both."
Rodger Malcolm Mitchell
Monetary Sovereignty