You really should re-read my August 21st Screw the Rising Generations! blog if you think younger generations never had so good. When you combine explosive college tuition and rising housing costs with the fact that pay levels have not remotely kept up with the cost of living, as my blog points out, corrected for inflation these younger workers have 86% less in real buying power than did Boomers at the same age.
We are also woefully short of skilled graduates in science, technology, engineering and mathematics (STEM). The National Association of Manufacturing and Deloitte report that the United States will have to fill 3.5 million STEM jobs by 2025, with more than 2 million of them going unfilled today because of the lack of highly skilled candidates in demand. And according to a study by the University of California (Davis), one job in the high-tech sector leads to 4.3 jobs in local goods and services industries. Hmmm.
With just over 6% of our workforce in STEM fields, about 20% of our college grads have STEM degrees. About 5%+ of our total university enrollment is made up of non-resident aliens – about one million all told. Of that million, a little over half (of which over 60% are Asian) are enrolled in STEM fields, accounting for 5% of STEM bachelor’s degrees and over 20% of STEM doctoral degrees. Fortunately, over 70% of those foreign doctoral grads stay in the United States!!!
Why are so many foreign students in STEM? Is it at the expense of US students? Because, according to the most recent standardized PISA (Programme for International Student Assessment) test, among the 35 members of the Organization for Economic Cooperation and Development, which sponsors the PISA initiative, the U.S. ranked 38th in math and 24th in science… hardly the academically qualified applicants for STEM degrees.
So, the United States is hideously expensive when it comes to university-level education, still maintaining most of the most highly ranked STEM universities, but we are not particularly kind to our own young students. We aren’t too kind to the companies that cater to these younger buyers either, but with fewer disposable dollars, our recent grads are not only postponing major purchases, they are also postponing marriage. Oh, the jobs are out there, but our public primary and secondary schools seem increasingly concerned with “woke censorship” than in turning out graduates for highly paid STEM careers. We don’t even have enough applicants sufficiently prepared to complete a STEM degree! All this combined with alarming outstanding student loans!
If you think having the levels of student debt that we have, $1.75 trillion (well over the aggregate of credits card debt), is healthy, that forgiving all or part of student loans for degrees costing triple (in inflation corrected dollars) over what Boomers paid, is an inflationary giveaway as the Republican Party claims, you probably have not done the math. Getting an education is much too expensive today. And the slam to our economy by taking that money away from young people starting their lives to pay for that over-priced tuition is bad for all of us.
In an August 17th article – Canceling Student Debt Would Increase Wealth, Not Inflation – by economists Mike Konczal and Alí Bustamante released by the Roosevelt Institution, explain: “From energy to trade policy, there are many difficult administrative policy questions that could impact inflation over the next year. Student debt cancellation is not likely to be one of them. While a recent blog post by the [GOP] Committee for a Responsible Federal Budget (CRFB) argues that canceling $10,000 of student debt would ‘consume nearly ten years of deficit reduction’ of the Inflation Reduction Act (IRA), and ‘wipe out the disinflationary benefits of the IRA,’[their math is simply wrong…]
“CRFB treats their $230 billion cost estimate of canceling $10,000 in student debt as if it is incurred over the next 10 years in order to compare that against the IRA’s deficit reduction in that same time period. They treat both as if they are on the same cash accounting standard. But this is not the case; per budgeting rules associated with credit programs, student loan cancellation is treated as if the foregone principal and interest payments over the entire lifetime of the loan all occur immediately.
“So while the actual reduction in government revenues from cancellation would be small in each year and spread over decades, something like $13 billion per year, it is budgeted as if all those years are all happening immediately. This means that student loan payments that would have been collected past the first decade are instead treated as lost revenue immediately within the first year.
“To truly compare the two, you would need to look at the deficit reduction of the IRA over at least two decades. CRFB has found that the IRA reduces the deficit by $1.9 trillion over two decades ($1.1 trillion with ACA subsidies extended), largely driven by prescription drug savings in the out years. This is far larger than the cost of any student loan cancellation.”
In short, with a fairly basic analysis, what is a federal budgetary blip of marginal consequence for that 10% student debt reduction, it leaves in place those aspects of the IRA that really reduce the deficit while plowing serious funds, that would not have made their way into the economy, into the pockets of those younger stressed recent grads. Further, President Biden’s announcement of that loan forgiveness program on August 24th comes with a qualifying annual income cap to prevent rich borrowers from thus reducing their debt.
We don’t seem to be able to keep students of any age safe from military assault weapons. We don’t seem to be able to provide the majority of public primary and secondary students with an education that is both good for them and even better for jobs creation and our overall economy. We don’t seem to prioritize making our children globally competitive just to make sure billionaires pay severely reduced taxes. And what’s worse, we really do not seem to care.
I’m Peter Dekom, and I have not witnessed this level of American self-destruction in my fairly long lifetime… and it only only seems to be getting worse.
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