Bernie Sanders Wants Taxpayers to Pay Off All College Loans
The Democratic Socialist wants to absorb $1.6 trillion of student debt.
Not satisfied with having the government take over 20 percent of the economy with his Medicare-for-All program, the Vermont Senator wants the government to assume all debt taken on for education and make college absolutely free from here on out.
Sen. Bernie Sanders (I-Vt.) will propose on Monday eliminating all $1.6 trillion of student debt held in the United States, a significant escalation of the policy fight in the 2020 Democratic presidential primary two days before the candidates’ first debate in Miami.
Sanders is proposing the federal government pay to wipe clean the student debt held by 45 million Americans — including all private and graduate school debt — as part of a package that also would make public universities, community colleges and trade schools tuition-free.—WaPo, “Sanders to propose canceling entire $1.6 trillion in U.S. student loan debt, escalating Democratic policy battle“
That’s a wee bit expensive! How does he propose paying for it? Why, by taxing the rich, naturally.
Sanders is proposing to pay for these plans with a tax on Wall Street his campaign says will raise more than $2 trillion over 10 years, though some tax experts give lower revenue estimates.
Sanders is proposing to pay for the legislation with a new tax on financial transactions, including a 0.5 percent tax on stock transactions and a 0.1 percent tax on bonds. Such a levy would curb Wall Street speculation while reducing income inequality, according to a report by the Century Foundation, a left-leaning think tank, though conservatives warn it would stunt economic growth and investment.
Having already broken the piggy bank for pay for his healthcare plan, it’s not clear that there’s anything left to also do this. But he has supporters.
Sanders will be joined Monday by Rep. Ilhan Omar (D-Minn.), who will introduce legislation in the House to eliminate all student debt in the United States, as well as Rep. Pramila Jayapal (D-Wash.), co-chair of the Congressional Progressive Caucus, who has championed legislation to make public universities tuition-free.
With this proposal, Sanders is out-bidding the competition:
Sanders helped popularize demands for tuition-free college during his 2016 presidential campaign run but did less to emphasize solutions for those who had already left school saddled with debt. Since then, liberal Democratic lawmakers have called for increasingly aggressive government solutions for erasing existing student debt, with 2020 candidates Sen. Elizabeth Warren (D-Mass.) proposing $640 billion in student debt forgiveness and former housing secretary Julián Castro introducing a more modest debt forgiveness plan.
Still, it’s not just Republicans and fat cats who think this a bridge too far:
These proposals have faced fierce objections, including from some moderate Democrats, for giving taxpayer subsidies to educated Americans who, on average, have higher earnings than those with only a high school degree.
Advocates say the push reflects the growing recognition of the economic harm created by the nation’s soaring student debt burden, particularly on the millennial generation, which ballooned from $90 billion to $1.6 trillion in about two decades, according to federal data.
Conservatives and moderate Democrats are likely to raise concerns about these student debt forgiveness plans. They have pointed out that Democratic presidential candidates, including Sanders, have pushed more than a dozen expensive federal projects — including Medicare-for-all, the Green New Deal and large infrastructure improvements — projected to cost substantially more than the $1.5 trillion GOP tax law approved in 2017, at a time of already high deficits.
“The cost will march toward $3 trillion and benefit a lot of wealthy families and future high-earners,” said Brian Riedl, an analyst at the Manhattan Institute, a libertarian-leaning think tank. “Of all problems requiring a $3 trillion federal expenditure, the college costs of middle- and upper-class college graduates seem lower-priority.”
A fierce debate has raged in left-leaning policy circles as well as over whether canceling student debt offers too much help to families with higher incomes. The top 40 percent of earners would receive about two-thirds of the benefits from Warren’s plan, according to Adam Looney, a former Treasury official under President Barack Obama who is now at the Brookings Institution, a center-left think tank.
That number is likely to be higher under Sanders’s plan, given that proposals by Warren and Castro do not call for wiping clean the debt of those earning over six figures. Warren has proposed forgiving up to $50,000 in student debt for those earning under $100,000, or about 42 million people. Under Castro’s plan, borrowers would not have to repay their loans until their income rose above 250 percent of the federal poverty line — about $64,000 for a family of four — after which it would be capped.
Sara Goldrick-Rab, a professor at Temple University who specializes in higher-education financing, said she had mixed feelings about plans such as the one proposed by Sanders that involve forgiving all student debt.
“There’s a piece of me that has seen how widespread the pain is, including among people you might say are financially fine,” Goldrick-Rab said. “But there’s a piece of me that knows what the pot looks like, and says, ‘That’s not the best use of the money.’ ”
Still, there are defenders of the idea:
Other experts say these criticisms miss the mark. If the plans are paid for with higher taxes on affluent Americans, they will ultimately redistribute resources down the income distribution, said Marshall Steinbaum, a former researcher at the Roosevelt Institute who was recently hired as an economics professor at the University of Utah.
Student debt forgiveness would also help stimulate economic growth by freeing borrowers to buy homes and improve their credit, while primarily benefiting racial minorities, according to Steinbaum and researchers at the Levy Institute, a left-leaning think tank. Omar, who has student debt, said in a statement that the plan would “unleash billions of dollars in economic growth.”
Additionally, poorer Americans would see the percentage of their income held in debt fall much more dramatically than that of higher earners under the plan, Steinbaum said. Steinbaum has also disputed Looney’s analysis, arguing it ignores people who have so much debt they cannot pay.
Many advanced countries offer free or much more highly subsidized university education. But those countries also tend to limit access to college to only the very brightest students, relegating everyone else to trade school or other non-elite tracks.
Aside from the “Can we afford it?” and “Who’s going to pay for it?” questions, there are indeed fairness and incentive issues to consider.
While it’s certainly true that children of lower-income parents often adsorb heavy debt to give themselves a shot at a better life, many children of middle-class parents take on a lot of debt simply to maintain a middle class lifestyle while in school. Why should they be bailed out by the taxpayer while their peers who scrimped and saved get nothing?
Furthermore, since the federal government runs essentially no universities, the “free public college” program winds up being a massive subsidy for the states. Over the past twenty to thirty years, states have significantly lowered how much of the cost of attending state colleges and universities they subsidize for in-state students. This, increased administrative overhead, and an arms race to provide better amenities, and other issues have led to the skyrocketing cost of college. Still, there’s only so much parents and students can pay, so there is some downward pressure on costs. If the federal taxpayer is footing the entire bill, though, that’s gone. States will have no incentive to keep costs down.
The bottom line, then, is that it simply makes no economic sense to combine a European-style subsidy of higher education with the American system of open admission to college. Since we’re not going to go to tracking and limited admission, we should instead target programs to lower-income and otherwise disadvantaged students and those going into desired fields. A tuition forgiveness program for those who teach in our public schools—particularly in disadvantaged communities—or go into nursing and other community service roles is much easier to defend than Sanders’ grandiose plan.
A proposal to create a network of federally funded universities and training institutions might have some merit or, as briefly mentioned above, making public universities and training institutions tuition free, but the idea that simply paying for student loans is the wisest use of $1.6T is absurd. What about people who didn’t go to college? Why are we favoring graduates over them? And what in Bernie’s half-*ssed proposal prevents the universities from endlessly raising tuition in response to the gravy train?
James, it is a bit of a shame that you couldn’t bring yourself to actually discuss the merits, both good and bad, of a society without insane resource commitments required to attend college and advanced degrees or the costs that the current structure has on this country.
The above is all about “is it fair?” and not about “is it smart?” – and that, while indicative of our screwed up political system, is a very “inside the beltway” way to examine policy.
How is this tax on stock transactions going to work with 401ks, 403bs, and IRAs? What happens when municipal borrowing costs go up to pay for the bond tax?
Not to mention we have a state pension crisis already without cutting their returns another half a percent.
That’s a ~$1.6T investment in students who, we can presume, will work productively and pay taxes the rest of their lives. I imagine the ROI of this, if calculated, would prove to be quite significant.
Dennison’s tax cut gave ~$1.7T to corporations…many of whom have moved work to other countries and pay no federal income taxes in this country. The ROI of this is miniscule at best…witness the current Federal Deficit.
So that math is pretty simple.
Besides…this is a campaign proposal from a guy who will never be in a position to enact it. But there is a lot of movement in this direction. So who knows what the final form will look like?
The transaction tax proposals I’ve seen represent a fraction of a percent of the value of a stock, and would have little on those who buy stock and hold it for weeks, months or years. In fact, the first time I ever saw it proposed it was to stifle computer trading, where stocks can be bought and sold over and over, sometimes hundreds of times in a day.
I’m evaluating a public policy proposal here, not engaging in social justice analysis. But I’ve written lots of posts over the years about the problems of the current system—increasing costs, the race to get kids through wickets starting with pre-kindergarten, the tying of primary and secondary education to neighborhoods, etc. See, for example, my recent posts “Sanders Calls for Private Charter School Ban” (subhed: “I’m not sure his solution is correct or even legal. But the problem is very real.”) and “Warren Proposes Student Loan Forgiveness and Free College” (subhed: “It’s an interesting idea, although one fraught with moral hazard.”)
I at least allude to the latter. I don’t think it makes any logical sense in the context of our current system. We send far too many kids to college, most of whom don’t have the capacity to graduate or, even if they do, to do the sort of processing expected of college graduates. We ought de-stigmatize the trades. But, again, that’s tangential to Sanders’ proposal and this is a blog post, not a manifesto. I seldom attempt a comprehensive statement of my views on the entire gamut of a policy area in a single post. Rather, I’m trying to set forth some quick thoughts and initiate a conversation.
I’d be willing to have a one-off payment in exchange for all the administrative fluff getting ripped out of colleges. Universities should have a) professors b) secretaries c) research staff, d) janitorial staff and that’s it. University presidents, college deans, etc. should be picked at random from the professorial staff, paid only a little more than their previous salaries, and have a stint of a few years only before they’re allowed to scuttle back to their previous positions. No one should want to be a college dean.
At some point the whole academic Ponzi scheme is going to have to collapse. The academic economy has become so riddled with well-paid administrative parasites contributing nothing that they’re in danger of collapsing the entire system.
Actually, it looks like you’re sniping at a public policy proposal here, not engaging in any analysis at all.
A few points, in no particular order…
1. Is it a tax on the rich, or a tax on Wall Street? Those are very different things, with the main difference being between personal income tax and corporate income tax. I’m open to both: the former as a counter to the automatic concentration of wealth at the top that happens if you don’t actively fight it, and the latter as a curb on the increasingly parasitic role of Wall Street in the economy.
2. As others have noted above, you have to look at both sides of the balance sheet. What does the economy get for this investment of $1.6T? If the answer is “a big boost in middle class prosperity (and thus spending)”, the whole program might be a net economic plus in the long run. I don’t know whether that’s the case, but you can’t evaluate the proposal without doing the math.
3. “many children of middle-class parents take on a lot of debt simply to maintain a middle class lifestyle while in school”. Seriously? Do you have any evidence for this? The amount of money needed to “maintain a middle class lifestyle” as a college student is trivial, compared to the costs of tuition, room and board, and books.
4. We all agree that our society has settled on a stupid way of using higher education as a poll tax for gainful employment. Solving that problem is independent of whether or not it is a good idea to forgive the student loan debt of past students using tax money.
The big difference, to my mind, between the healthcare proposal and this one is that we are already paying for health care collectively. We pay for insurance, and we use insurance benefits. Often times it’s our employer who pays, but you can be sure they treat that cost as if it were part of your salary. Which it sort of is.
So healthcare changes mostly shift around the money flows and call them “taxes” instead of “salary”.
I’d like to see college get cheaper, for sure. It was a lot cheaper when I went, and I think it’s only fair.
I think the sort of proposal Bernie makes is supposed to be simple, grab attention for its audaciousness, and make a good slogan. When the legislative body gets hold of it, it will be changed a lot.
I prefer my brother-in-law’s proposal, which is a logarithmic graduated capital gains tax rate that goes from 100% for investments held for less than a minute down to 15% for investments held for 100 years or more. If there’s no profit in arbitrage, the arbitrage will go away. The only trick is to make sure that the broker pays enough of the tax to discourage churn, as well.
While administrative bloat is a thing, the other extreme is just as ridiculous. Just because someone is a good professor doesn’t mean they know how to run a giant organization.
I respect your views, and always read your comments with interest…
I’m sorry, normal professorial staff lack the vision and foresight to guide a large institution over any length of time. What programs require investment? What new programs are needed? Should the school build a new Business building, or a new Engineering building? A new program will take minimum 4-5 years to get off the ground. Building a large new facility will take years, between planning, funding…the actual construction is only a small part of it.
I’ve spent decades doing Architecture and Planning for large Institutions; getting to know entire University communities along the way. University President is, by-and-large, just simply outside the wheel-house of normal professorial staff.
As for Administrative Parasites…cannot argue that point.
I would like to see a graph comparing average income to average college tuition since 1950. I have looked, but can’t find one.
My tuition of years ago was $600 a semester at a small private school (day student). That was a bit high so I transferred to a state university that ran around $300 a semester. I recall back then that some universities were free or almost free.
Some schools really run up the textbook prices: $600 or more is not unheard of, plus the online fee. And the used book routine doesn’t always work as some instructors change the textbook.
I look for the online degree path to increase. I can find many good accredited schools that offer online degrees. Those aren’t cheap, but you save gas and living on campus.
How is this fair to individuals who worked and paid their way through college? Shouldn’t they share the lucre. They are issues out there that cost a lot of money -healthcare- reparations-public schools- I fail to see why voluntary indebtness should join the list. It is true that we need to address college costs, but a flat out handout is not the answer. Other approaches like Obama’s student loan payment plan, encourage three year graduations or credit transfers are fairer.
Some of it is a response to governmental regulations. Some of it is Keeping Up With the Joneses. Too much of academic administration is about fundraising and the like rather than education per se.
I’ve seen it with my own eyes. In grad school, I lived in a shitty apartment across the street from the Section 8 housing. I managed to graduate debt-free with my graduate assistantship and a small stipend from the VA (Montgomery GI Bill). Many of my cohort, also on assistantships, were living in luxury apartments and driving nice cars, all paid for on debt. “Room and board” used to mean the dorm and cafeteria; that’s still relatively inexpensive compared to posh living off-campus.
Ummm…. what exactly do you think is the difference? Shouldn’t we, as a Society, evaluate public policy for how it impacts, good and bad, society and addresses Society’s problems and concerns?
@grumpy realist: This is insane and amazingly Trumpian in its complete dismissal of the concepts of expertise, professionalism and experience. Most professors couldn’t manage an organization and they certainly couldn’t handle the finances, compliance, security, housing, HR and other organizational issues required to run a large and complex organization.
@Jay L Gischer:
And the counter would be that, as a Society, we already pay for college but it isn’t in a rational or organized way (which James doers allude to).
Not 1950 but comparing to 30 years ago
More from the late 80’s to today
And, from that link, salary increases aren’t keeping pace:
Is that what he wants to do? Or does he want to expand the national debt by $1.6T? I assume the latter.
I have no possible way of doing this calculation, let alone within reasonable time constraints for a blog post. It’s incumbent on Sanders, a US Senator with a large staff who is proposing a massive expenditure, to do the math.
Can we pump the brakes on the spending just a bit? Free medical, free college, free child care, reparations for African-Americans, jobs guarantees, infrastructure investments, wars on cancer, raises for everyone, free drug rehab and a totally green system of power generation by next week. . . this is the kind of madness that got Democrats exiled to the wilderness so that we had to go centrist Bill Clinton to get back in the game.
A Financial Transaction Tax is hardly a new and radical idea. The linked WIKI article mentions a stamp tax on stock trades from 1694. Some form of it would be a good idea, whether tied to education, infrastructure, or general revenue. We need the money and it could be structured to discourage a lot of undesirable behavior. The WIKI article notes the US had such a tax at a 0.2% rate, later 0.4, from 1914 to 1966.
I have a theory that much of our problem is simply “sclerosis”. Over time we accrete new laws, new regulations, new organizations while hardly ever eliminating any. All institutions, not just government. I have a pet management theory that every thirty years or so a CEO should torch the company, take the insurance, and set up across the street with a clean slate. Eventually everything becomes too complicated to work. Our legal system and our tax code being primary examples.
I would love to see the Ds run on tax reform. Not Republican “reform”, but start over from scratch. OK, with a planned, say ten year, transition. Think big, a Financial Transaction Tax, a VAT, direct subsidies instead of messy tax expenditures, big inheritance taxes like the Founders intended, genuinely progressive incidence. I’d love to see a wealth tax, but I don’t see how to work it unless it’s international. At which point it becomes simple, “Barbados Mortgage and Trust, how much money do you have on deposit? Give us 1%. How you pass that on is up to you.”
@michael reynolds: I agree that outbidding each other on spending may or may not be a way to win the primaries, but it’s bad strategy for the general. But as I recall it Clinton and the DLC went centrist partly to appeal to middle class white voters, but mostly to appeal to the large corporate and wealthy donors they felt they needed in order to compete electorally.They were probably right. Small donor online fundraising may have made that obsolete. Or may not have. There was also a large element of taking over the middle the GOPs were eagerly abandoning. Even more valid now.
Perhaps a similar argument could be made about the health care economy, hence, the appeal of Medicare for All…
Why not just forego the impeding war with Iran? That should pay for it and then some.
Ah. So, (1) anecdote, not data, and (2) grad school, which is essentially unrelated to the problem of student loan debt. Permit me to be skeptical that this is a significant problem at the undergraduate level.
I wouldn’t ask you to. All I ask is that you note somewhere in your blog post that doing this calculation is important for deciding whether or not it’s a good policy recommendation.
The problem with a wealth tax is that either everyone has to itemize the value of all their personal property every year or rich people will use whatever’s not included in the tax as a way of storing wealth tax free. e.g. if you don’t force me to get my 18 year old lazyboy sofa recliner appraised every year, suddenly antique furniture will become the big investment.
@SKI: I grew up as a faculty brat of one of the Ivies. It was common back then (40 years ago) that the deans would be professors shanghaied into acting as administrators for a few years before they were allowed to escape gratefully back into their previous roles. The university had the deans and the university president. I don’t even remember a vice-president. That was it. Didn’t seem to have done any harm to the university.
I also realise that there used to be many fewer layers of administration. Between the present requirements to deal with governmental edicts, the obsession by too many helicopter parents that their little darlings be coddled in cotton fluff the entire four years (and the need of the university to cater to such demands), and the increasing franticness of universities to make sure they are competitive with the other offerings out there (a.k.a. gotta have that new Olympic swim pool or CS research centre) the percentage of administrative staff just keeps going up and up and up.
What is really annoying is at the same time we’ve seen this inrush of admin staff (usually at very well-paid salaries), we’ve also seen universities cut back on tenured faculty slots and replace them with the roving bank of academic serfs called adjunct faculty at ridiculously low salaries and no promises that their jobs will be around the following semester.
So tuition continues to rise and rise and rise as more parasites latch on and students put up with it because unless they have that diploma in their hand they have no chance with our increasingly-credential-obsessed H.R. departments.
What’s the alternative? College may not be for everyone, but there’s very little outside of going to college that young people can aspire to. We’re allowing people to take on crippling amounts of debt for what is basically a requirement. James writes about how unreasonable it is to expect Americans to cut back on plane trips and meat consumption. As a society it can’t be had both ways–you can’t have material comfort be an untouchable good for a society and then wonder why we as a society might have to help for people who want to earn this good. This only works for selfish individuals with little imagination.
I would love to believe that debt relief would be a way to wipe the slate clean, and give actual breathing room for young people to work on actual solutions.
A partial, alternative solution for the future: Tap/tax the college endowment funds. What are they saving them for? A future Armageddon? Another possible idea for the future…no federal loans to students going to private universities. A Harvard degree in Philosophy won’t get you a better future than one from say, Oklahoma State or Michigan.
Best comment of the thread. Its galling that students/parents demand those pools and Taj Mahal dorms.………..and then don’t want to pay the tuition that paid for them.
The debates (snicker) ought to be entertaining. Who can give away the most free beer?
“College may not be for everyone, but there’s very little outside of going to college that young people can aspire to.”
Sure there is. The trades. A better deal than most run of the mill degrees by far.
“We’re allowing people to take on crippling amounts of debt for what is basically a requirement.”
Who “we” Kimosabe? I must have missed the part with a gun pointed at the head of an applicant.
@Stormy Dragon: If you’re storing wealth in objects, wouldn’t you need to know the value for insurance purposes?
Admittedly I don’t know if insurance works differently for high end items, but I have homeowners insurance despite never having the contents of my house appraised. There’s an agreed to limit on policy, and the value of individual items only becomes relevant if there’s a loss, at which point the value is easy to determine because you can see what I’m paying for the replacements.
It seems to me the underlying issue is the obsession with credentialing. Managers no longer make judgments, they rely instead on nominally objective standards – degrees. Of course a big part of the reason for this is the inability of white, male managers to look past race, gender and cronyism in hiring. When human judgment fails, systems are created to replace that judgment and nonsense results. If we could rely on human managers not to be morons we’d avoid a lot of this trouble.
For once, Guarneri got one right. Back in the day, the path out of poverty was apprenticeship in a trade. The sequence of offspring would go something like farmer/laborer, cobbler/plumber/tailor/mechanic, accountant/manager/teacher, doctor/lawyer/dentist. (At that point, you can start producing economists and psychologists and engineers, as well as French Literature and Art History majors.)
The key feature of an apprenticeship is that it’s free. The master pays room and board and a small stipend for the apprentice, who in turn provides free labor while learning the trade. This is only viable, of course, if the labor value of what the apprentice can do exceeds the costs of room and board.
At present in the US, most formerly-apprenticeship professions are being trained primarily at community colleges. Except for California(?), that’s not free, and it certainly doesn’t pay room and board to the learners.
@michael reynolds: HR people….grr. I wonder how many people simply end up getting shunted sideways into H.R. because they’ve demonstrated their incompetence to be advanced on their original management track?
Silicon Valley has tons of stories about the idiocies of H.R. I especially liked the job ad requiring 5 years of expertise in Java, offered 3 years after the language was invented.
As one of those “administrative parasites” in higher ed I object to having my job eliminated:)
I can think of a few factors that should be considered when determining how much financial help to provide:
* Student’s SEC
* Student’s field of study (students with a high-paying job at the end of the tunnel should get less support)
* The value of the student’s field of study (give more financial support to students studying fields that are in demand or otherwise deemed to have a greater societal value [teaching, for example]).
* Value of the school (give students at the Harvards and Yales less)
Plug all that into a spreadsheet and you have a good start.
Wouldn’t those two items pretty much always cancel each other out?
I don’t disagree about the trades. But I doubt it’s a solution. How many jobs are we talking about overall? Personally, I know a couple of successful woodworkers, but they also come from some money and went into it after going to college and they used that money to start their own business…and that’s also a thing. You can’t talk about college without talking about class, and you can’t expect college not to be popular if class isn’t highly important. Incidentally, this is why Trump’s populism is such a bust. Nobody wants to be the Trump-version of working class–stuck at a factory for eternity and handing that job down the family line like a peasant is not why unions were formed and strikes happened.
I don’t exactly think Sanders’ plan is good, simply because I think that college inside and outside of the ‘elite’ divide is a scam. But outside of simply being too feeble to give a shit about anything, I don’t know what the alternative is.
A quick Google suggests somewhere between 10 million and 30 million, with about 3 million current vacancies and an aging workforce.
It’s not just plumbers and electricians and construction workers; it’s also practical nurses and licensed physical therapists and EMTs and a host of other health-related jobs, along with all of the IT services jobs.
According to the Bureau of Labor Statistics there are about a million carpenters, three quarters of a million electricians, a half million plumbers, 300K HVAC, 150K roofers, half a million machinists, half a million industrial mechanics, a million metal and plastic machine workers, 140K sheetmetal workers, and a half million welders and related. Most of those are growing in numbers at 8% a year (construction trades more than factory). By comparison there are about 50,000 journalists and every year the J-schools are graduating another 70,000 journalism majors.
A quick Google suggests somewhere between 10 million and 30 million, with about 3 million current vacancies and an aging workforce.
The aging workforce suggests that the children of carpenters and electricians are not being pushed by their parents into these professions. This is unlike professionals, for example, who do tend to direct their children into professional careers. By and large, I don’t think you can just turn a few policy knobs and make the trades attractive if they’re not to people who are in them.
One of the problems the NHS in the U.K. has been dealing with is the acute shortage of nurses. Part of the problem has been claimed to be the credentialing now associated with the profession (and the costs of getting such an education) but methinks that as soon as we started developing all those pieces of medical equipment nursing was always going to go down that route. It’s been quite some time since nursing consisted of wringing out wet cloths to lay against the fevered brow sort of activity.
One possible route is more and more “monitoring and diagnosis” being taken over by AI, leaving humans to do the fevered brow stuff (and get paid crap salaries). At some point, American corporations are going to have to realise that AI networks don’t purchase products, and if they want to keep going, they’re going to have to figure out how to keep paying sufficient salaries that the humans said companies want to have purchase their products/services can actually afford to do so.
When Rush Limbaugh was ranting about this years ago, the number was 7%. Was the opening hyperbole, or has health care as a slice of the total economy tripled over the course of a decade or so?
” If the answer is “a big boost in middle class prosperity (and thus spending)”, the whole program might be a net economic plus in the long run.”
True, but if you look more closely at the excerpt that talks about such advantages you see something to the effect of *especially poor families*. And that, of course is the rub.
@James Joyner: And once again, you demonstrate that the plural of “anecdote” really is “data.”
@Stormy Dragon: When I had a house that I insured, the contents were capped at a fixed level–as I recall, something on the order of $15k–and anything above that level of coverage was carried by separate riders on appraised bundles of possessions. I decided not to have my musical instruments insured separately, for example, because in my case, the coverage cap was still adequate. (And yes, I do live a fairly spartan life.)
I’m not sure where you’re getting the idea that these trades are not attractive. They are not accessible to people who don’t have the time and money to get the certifications.
ETA: OK, I see your argument — that if these were jobs anyone wanted, the kids would follow in the parents’ footsteps. That’s an odd notion, that just because carpenters’ kids want to be lawyers it must follow that trash collectors’ kids don’t want to be carpenters…
I’m reminded of a Doonesbury cartoon from decades ago, in which B.D. complains that there are plenty of jobs available but people are too lazy to go find them. Zonker looks at the Help Wanted section of the newspaper and says “Wow, I had no idea there were so many deadbeat chemical engineers out there…”
@DrDaveT: Didn’t Ronald Reagan do something similar, huffing and puffing about “all those ads in the WSJ offering $100K jobs” and then someone looked at what was actually being offered…..pointing out that the bulk of the jobs he had seen in the WSJ with such salaries was for people with Ph.Ds in microbiology (pharmaceutical companies)…..
It really does look like we’re coming to the end of what started with the Industrial Revolution: labor from humans being swapped out with labor from machines. We’re squeezing out the final drops now via robotics and AI, resulting in crappier and crappier jobs left for actual humans. Either we’re going to have to really start appreciating “the human touch/interaction” in all its guises to the point where we’re willing to pay sufficiently for it, or we’re going to have to go Amish and go back to insisting on a much more techno-restricted life.
As far as repaying student loans, I prefer the Milton Friedman proposal that all loans be repaid at a fixed percentage of the students future annual income for a fixed number of years. The Ivy League PhD who decides to pursue a career in day care will have a small amount to repay and the State U grad who stumbles on to Wall Street, would have a big number.
Yes to apprenticeships. Apprenticeships once were a key provision of a quaint organization known as labor unions, you remember them, don’t you?
There is the not so secret dirty little secret of this country over the past 50 years…with the decline of unions, we have seen the decline of the middle and working classes…the beneficiaries have been the wealthy, of course…yet, many people still consider unions to be evil entities…
Paying off the loans doesn’t really solve the underlying problems, it just puts a bandaid on them.
Ideally, in-state public school tuition would low enough that students can afford it, but for my entire lifetime, states have been cutting funding. I’d ask why does the public school model fail after high school.
Not everyone goes to college, but the folks who are most likely to send their kids to college are also more likely to vote. They will scream bloody murder if you want to put a halfway house for mentally disabled adults in their neighborhood, but they won’t fight to ensure their kid has cheap access to a state college.
Are college kids just too mobile, so states are the wrong structure? Would an interstate compact make things better, and allow the funding to follow the students, so rather than in-state tuition you have in-PNW-blue-state-compact tuition?
Are state schools just sucky and for “other” people? Would vouchers that can be applied to private schools make people feel more connected to the public schools. (I’m thinking the voucher would cost in-state public school tuition, and be redeemed for the out-of-state tuition at a private school — a grant system tied to the public schools)
@Modulo Myself: @DrDaveT: @Dave Schuler: Relying again on anecdote, yesterday I paid $1100 for a home inspection, $695 for a septic inspection, and $438 for a pump and well inspection. The home inspection took four hours; still, much more than I make hourly. The septic took maybe an hour and the well about the same. The realtor explained that there are just more people qualified to do home inspections, so the well and septic guys can simply charge more. None of those are jobs that I would have aspired to coming out of school. But there’s a doggone good living to be had for jobs that don’t/shouldn’t require a college education.
@Just nutha ignint cracker:
The 20% figure has been used in national discussions for a while now. I looked up the official data and it was actually a mere 17.9% in 2017, the latest year available from CMS.gov. It’s been rising pretty steadily. It was only 5% in 1960, 6.9% in 1970, 8.9% in 1980, 12.1% in 1990, 13.4% in 2000, and 17.3% in 2010. The peak was 18% in 2016.
So, if the discussion was about healthcare spending for the entire economy, Limbaugh was vastly understating the case. But maybe he was just talking about estimates of the amount Clinton’s plan would absorb.
Apprenticeships long predate labor unions and existed even in fields that never unionized, including the professions. It’s only been in very recent times that people went to school to become physicians and attorneys.
Sure, they make okay money. Good construction workers with trade skills can clear 6 figures. But the average salary for an HVAC repair person is 47K. A plumber is 57K. Apparently, the average starting salary of a college is 50K. There’s no real math to be done here, financially.
Moreover, there are 20 million people enrolled currently in college. I have no idea where Schuler gets his 8% percent number. According to BLS, carpenters are growing 8% over a ten year period (the average) and HVAC is growing 16% over the same ten years. Regardless take his numbers of jobs and how many new jobs do you at any reasonably growth? Compare that number to the 20 million in college right now.
The trades are fine and more people should go into them. But believing that emphasizing trades will deter significant numbers of people from going into college and running up debt they can’t afford is ridiculous. The numbers just aren’t there.
Oh for the love of God, no. You know why universities have administrative staff? Because professors are doing research and teaching, and shepherding the next generation of researchers and educators. Are the secretaries going to handle hiring and firing? How about Article 15s? (Let’s not even get into Title IX.) What about accreditation? What about international students/visas/logistics? Who’s going to advise students? (Our current advisee load: 400 students per advisor. I’d like to see you offer that advising load to any given professor, even a tenure-hungry ass’t professor. They’ll laugh you out of the state.)
Who’s going to order classes? Who’s going to schedule classes? Who’s going to oversee the department’s research grants and general funds? (Who’s going to oversee the college’s research grants and general funds?) Cause I guarantee you that department secretary you’re allowing for is going to have his or her plate full just handling the day to day of the department. There might be time for that secretary to order classes and maybe schedule them, but not to oversee the grants and contracts, and not to oversee general HR requirements, and certainly not to handle advising or international students/hires.
The reason universities have administrative staff is because professors are best served using their incredible stores of knowledge to teach and do research and mentor/educate the citizenry, some of whom will be future researchers and educators. A professor’s time is not best served figuring out how to schedule and order classes (and coordinating with all the other professors to schedule and order classes and realizing too late that an entire contingent of freshmen aren’t going to be able to take Physics I if the schedule is implemented the way Professor ABC intended). That is only the surface scratch. I won’t even get into accreditation/continuous improvement or, say, international students and faculty/staff. People who say “let the professors do everything” have never actually worked at a university or thought about what it is professors are good at.
By the same token, there are a lot of professors who should never touch department headship or deanship with a 29 1/2 foot pole.
@Modulo Myself: I’m not trying to be snarky here, but I really am having a hard time following your argument. Let me take it one piece at a time.
That’s an econometric foul — you have to account for the selection bias, and control for heterogeneity in ability and background. The average for college grads includes a fat tail of really big salaries that are less available to the population we’re talking about, even if they could afford to go to college. If you want to estimate the marginal salary boost to an individual from the bottom half of the income distribution, it’s much harder to do. I’ll see if I can find some references.
…many of whom would be better off aiming for one of those 3 million skilled trade vacancies. I’m not sure what your point is in citing the large number of people in college, when the basic premise of my argument is that too many people are in college. Are you arguing that there are more vacancies per capita in jobs requiring a college degree than there are in the skilled trades? Or faster growth in jobs? I would need to see some evidence for that; it seems unlikely.
I’m not sure what you mean by “emphasizing trades”; I’m talking about making it more affordable to get into a trade. And I honestly have no idea what you mean by “the numbers just aren’t there”. What numbers? What evidence do you see that only a trivial number of people would skip trying to go to college and instead take a high-paying job in the trades, if they had a pathway to do that?
And a quick reminder that many of these jobs are sole proprietors/LLCs/self-employed types, with no benefits and a different tax structure, as they have to pay both the employer and employee “sides” of payroll taxes. The take home pay is lower.
@Just nutha ignint cracker:
That was sort of my point. Things may be different for the super wealthy, but for most people the level of home owners coverage a person has doesn’t really tell you much about what the contents of the home are actually worth.
I’m willing to bet that a degree from a brand name state school is far more valuable than a much more expensive degree from a tiny liberal arts college no one has ever heard of.
I haven’t found anything more recent, but I did find a 1996 paper that tries to estimate the “sheepskin effect” and whether there are differences between black/white and male/female. If I’m reading the paper correctly, the average wage boost from having a bachelor’s degree, after controlling for everything else, is between 25% and 30%.
I’m not supporting paying the bills for all the Sanders/Warren supporters. I couldn’t afford college so I educated myself and got a good job and never asked for a dime. My kids went into the service and went to school on the GI Bill. They have no college debt and got a great education. I’m just not into paying the bills of kids who refused to try alternative means for college funding. I pulled myself up just like tons of other people and don’t want to be stuck with the bill. I also don’t support being forced into Medicare for all and lose my health insurance. Trump is working on cutting Medicare and SS and I like my insurance. I prefer Kamala, Castro, Biden as better candidates. Most senior citizens feel the same about us paying the young peoples bills. They wear their 300-1000 shoes, have all the latest Apple products, drive their BMW’s and expect us to pay their bills while we shop at thrift stores and live on limited funds. They’re young, and should be responsible for their own fiscal decisions. They should have taken up plumbing, electrician, mechanic or some job that actually pays instead of taking Poetry and thinking they’d find a job. Get real!!
@henry f acosta:
I’m not sure where you get the idea that most Baby Boomers are shopping at thrift stores or most Millenials are driving BMWs and wearing expensive shoes.
@henry f acosta:
The percentage of students majoring in English has never been particularly high and is in steep decline over the last decade, according to the Department of Education:
Students are increasingly seeing college as a trade school to prepare for gainful employment, not education for its own sake.
@James Joyner: my kids served in the military and then went to college and worked at the same time. They graduated with no college debt. I’m not ready to pay the tab for all the kids that took out loans they couldn’t afford to go to a college they couldn’t afford. Nope.