Sen. Elizabeth Warren is trying to boost her quest for the Democratic presidential nomination with a proposal that could be called Game of Loans – taking $640 billion of your tax dollars to forgive college student loans. Warren is hoping her giveaway will be as hard for millennials to resist as HBO’s similarly named hit show.
Free money! Who could possibly object to that? But taxpayers should know that as the tab for free stuff continues to pile up, up and up, winter is coming.
There is approximately $1.5 trillion in student loan debt currently outstanding in the U.S., second only to mortgage debt.
Warren’s proposal, announced in a blog post, calls for eliminating $50,000 in student loan debt for anyone with an annual household income of less than $100,000. The loan forgiveness would gradually phase out for higher-income students and disappear for students with a household income of more than $250,000.
But wait… there’s more! Warren wants to eliminate tuition at public colleges and community colleges altogether.
The cost? Just $640 billion for the loan forgiveness and a mere $1.25 trillion over the course of a decade when you add in the free tuition, according to Warren.
Socialism is ascendant in the Democratic Party today, designed not just to enable government to take more of your money but to enable government to take more of your liberty and individual rights.
Of course, estimates of the cost of government programs almost always tend to be low. So the actual costs of all Warren’s college programs could turn out to be far higher – and that’s not even counting a host of other big government programs the senator from Massachusetts is pushing.
Sen. Everett Dirksen, R-Ill., who was Senate minority leader from 1959 to 1969, once complained about how easily Congress spent taxpayer dollars by saying: “A billion here, a billion there, and pretty soon you're talking about real money.”
That observation would need to be updated for Warren and the other big-spending, big- government Democrats seeking their party’s presidential nomination to: “A trillion here, a trillion there, and pretty soon you’re talking about really big tax increases and deficits.”
Warren would have us believe that taxing the rich could give us a treasure trove of cash to finance her college programs and other programs as well. The millionaires and billionaires have so much extra cash just lying around they can finance just about every Democratic spending plan, right?
The problem with the tax increase remedy in terms of the math is that tax increases rarely produce the full uptick in revenue that models predict. Human adaptability simply doesn’t get accurately captured in econometric models.
On top of that, taxes first imposed on the wealthy tend to expand to people with lower and lower incomes and grow to higher rates as time goes by. For example, when the modern federal income tax began in 1913 the top rate was only 7 percent and it only applied to incomes above $500,000 – the equivalent of $12.7 million today.
In addition, when “free” government money is available, costs tend to rise far faster than inflation. That’s been the case with higher education for years, thanks to existing student loan programs and federal, state and local funding for public colleges. The more money pumped into higher education, the more costs skyrocket so colleges can collect more of that money.
The problem of mounting student loan debt is one I have written and lectured about extensively. Government and universities have conspired for decades to pump liquidity into the educational system through the liberal extension of student loans.
In addition to allowing for huge increases in tuition costs, all this government money has been used to indoctrinate students with progressive values and create new courses and majors that leave students with degrees that fail to prepare them for any meaningful employment opportunity.
I assure you that HBO is not going to pick up this “Game of Loans” as a new series.
The best efforts to address the problems facing our colleges can be found in the Proposals to Reform the Higher Education Act submitted by the Trump administration to Congress in March. Those ideas employ market-based and job-based reforms to reduce the cost of education and break the stranglehold currently held by big government and big universities.
These ideas, which face steep opposition from Democrats and education insiders, address reform going forward.
Warren seeks a new world order in education in which government completely controls the system. I, and others like me, propose a system based on student choice and market solutions. That is a debate we look forward to having.
But the issue of total government funding for college and all sorts of other things in our lives has broader implications. Just as important is the issue of individual responsibility.
On average, college graduates make about $900,000 more over the course of their careers than high school graduates, studies have shown. Look at college costs that way and it seems reasonable to expect students to take out loans to make an investment in themselves that will pay dividends for the rest of their lives.
If we allow ourselves to get to the point where we say to a particular group that “you can take your personal obligation and force someone else to pay for it,” we will create a precedent that can’t be contained.
How much “free stuff” can government give away before raising all our taxes so high that we won’t have the money to support ourselves and will depend on the “free stuff” from government?
Andrew Yang, an obscure candidate for the Democratic presidential nomination, has actually proposed giving every American adult a guaranteed income of $1,000 a month, amounting $12,000 per year. The Center on Budget and Policy Priorities estimates a $10,000 guaranteed annual income would cost $3 trillion a year.
How to pay this gigantic bill, which is more than three times the costs of Social Security payments each year? Yang would impose a value-added tax – a consumption tax levied on good as they are produced.
So you pay higher taxes on everything you buy and then get the “free” payments. How generous.
Let’s call these Democratic schemes to take more and more of you money in taxes so they can kindly give some of it back to you what they really are: legalized theft, designed to make government more powerful and individual Americans more subservient and dependent on government.
These wealth redistribution schemes are as purely Marxist proposals as any we have witnessed in American history. Socialism is ascendant in the Democratic Party today, designed not just to enable government to take more of your money but to enable government to take more of your liberty and individual rights. If history has taught us anything it’s that the more powerful government grows, the more endangered our freedoms become.
As the Democratic presidential candidates fall over each other to move further and further left and become more and more extreme – lest any be left behind – we can expect increasingly radical proposals to take our money to support all sorts of “wonderful” programs.
This is madness. This is the stuff of Robespierre.
America became the greatest nation on Earth because our free enterprise system encourages individuality, creativity, entrepreneurship, innovation and freedom.
I am urging every American citizen who is currently responsible for student loan payments, no matter how great the burden might feel, to resist the incredible temptation to vote for Elizabeth Warren and her proposal to reach into the pocket of someone unknown to you for your own personal benefit.
And I urge everyone to resist the call of other Democrats to push us down the disastrous path of socialism, surrendering more and more of our money and freedoms to government.
Around the world, socialism and communism have begun with hope and ended in disaster. This is not the road America should begin journeying on. It is the road to the destruction of the American Dream.