Saturday, January 30, 2010

More Debt for Students, More Cash for Universities

While the White House continues to spew rhetoric about not passing on the debt burden to future generations, the President proceeds to make decisions that are counter-intuitive to that refusal. The “change we can believe in” that we have witnessed to date has, in reality, only been a renewal of the welfare-warfare state of presidents past.

In his 2010 State of the Union address, Wednesday evening, President Obama reasserted his administration's commitment to increasing the debt burden on America's students and raising tuition costs at the nation's universities when he unveiled his debt-for-diploma plan to “make college more affordable.” The President's plan would afford students' families a $10,000 tax credit and “increase Pell Grants” while requiring students to pay only ten percent of their income on student loans, with the remainder of the debt to be forgiven after twenty years. For students that chose to enter a “public service” profession – whatever that may be – the debt will be forgiven after only ten years of payment. But who, I ask, will pay the debt? Why, we'll just pass it on to the next generation!

This policy of subsidizing student loans stands to perpetuate the rising costs of education in America, just as the students of today's college generation are already feeling the debt pile on. USA Today reports that the average debt of peoples age 22 to 29 increased 10% over the five years from 2001 to 2006 to $16,120, and student loan balances rose to an average of $14,379, while nearly half of them have stopped paying on that debt.

Following his proposition for more student debt, President Obama sent an ironic message to America's schools:
It's time for colleges and universities to get serious about cutting their own costs.
If the government is going to make financial aid even more accessible to students, then why shouldn't the universities raise tuition? Consider this hypothetical: If every college student in America had sudden access to $100,000 for school, then why should we expect universities to only charge $1,000? The easy money policies of Washington will essentially make every student wealthy in regards to school tuition by making American students more likely to take on debt, affording universities the ability to make education more costly. Moreover, if every citizen of America is able to obtain a college degree, then that degree will become essentially worthless as an asset in the marketplace.

Now, consider the following – a scenario in which market forces put downward pressure on the costs of tuition: If the government were to no longer subsidize student loans then creditors would be more skeptical of lending students money, as students traditionally do not have high incomes or steady jobs. Consequently, if students were no longer able to afford college due to their inability to acquire loans, then market pressures would necessarily lower tuition costs – colleges and universities would not simply sit empty, they would have to lower their tuition in order to fill up their classes.

The politicians and policy-makers in Washington have repeatedly displayed a blatant ignorance of economic principle. Rather than allow markets to put downward pressures on college tuition, they opt to expand the welfare-state and subsidize education costs, further entrenching our students in debt. If our nation and its economy are to survive, we must abandon the savior-based economy and return to a savings based one – we must let the free market work to reign in the high costs of education. For to continue subsidizing our costly lifestyle at the expense of future generations is simply immoral.

The Reality of Reality

As the cameras moved along one of the cell blocks, a prisoner with a thick Arabic accent said sarcastically:
Al Qaida used to be only 50 people, now it is about half a million! Thank you America!
This was the scene in a recent National Geographic Channel Explorer episode entitled, “Inside Guantanamo.” The documentary provides an eye opening look at the United States government's unlawful detention camps at Guantanamo Bay, Cuba. While the episode makes a valiant effort to validate America's need for the prison, it also gives the prisoners a voice – a voice that America should listen to. Why, though, do so many Americans fail to hear these warnings?

During the Republican primary debates, prior to the 2008 election, Congressman Ron Paul regularly and correctly cited the CIA's “blow-back” theory as an explanation for the escalation of the threat of terrorist activity against the United States. However, every time Dr. Paul reiterated that argument, it was met with the inevitable rhetoric, “Are you suggesting that we invited the attacks of September 11th?” Well, the short answer is, yes! The ignorance that our nation's leaders exhibit towards the adverse effects of our interventionist foreign policy undoubtedly perpetuates the hatred and contempt that Al Qaida and other terrorist groups around the world display towards the West. While Americans did not invite the attacks of September 11th – nor were the thousands of deaths justified – America's policies over several decades provided the terrorists with ample motivation to carry out their attack.

Many Americans are unaware of the history of our involvement in the politics of Middle Eastern states. Since the end of World War II, America and its allies have found themselves engaged in the affairs of several Middle Eastern countries - the CIA's coup to overthrow the democratically elected Shah of Iran, US Marines in Lebanon and Beirut, and America's current involvement in Afghanistan and Pakistan only represent a small portion of the extensive list of military and political involvements by the US and its allies in the Middle East Region. And all of this in an effort to “protect American interests” - in other words, to protect big oil and other corporate concerns. Although I, in no way, wish to validate the arguments of radical Muslims, what is essential to their position is that these are countries that are on land that is often regarded as sacred by the Muslims that inhabit the area.

For another perspective, let's look at what is happening in Iraq and consider what we Americans may think if we were in their position: What would we do if another country kicked in America's door, wiped out our military, and occupied us so that they could set up a government that better serves their interests. Would anyone expect Americans to accept this scenario? Why then should we expect these middle eastern nations to accept the United States frequently meddling in their affairs?

This prisoner at Guantanamo Bay offered a unique perspective to which Americans should pay much attention. Unfortunately, rather than heed their warnings, the leaders of our country have repeatedly ignored the words of our enemies. The current US foreign policy will only continue to intensify the threat of violence on our citizens unless we promptly reverse our course. To reverse course is not to give in to the demands of our enemies, it is to abide by our nation's commitment to freedom from tyranny and government coercion - freedom for its own people and the people of all nations. If we are to be respected around the world again, the era of American imperialism must end. We must halt our interventionist foreign policy and return to the foreign policy of Thomas Jefferson – a policy of “peace, commerce, and honest friendship with all nations – entangling alliances with none” – for these are the principles on which this great republic was founded.