The GOP’s Zero-Sum Economics: Forcing Health Care to Pay for Student Loans
The Republican Party is fond of telling voters that their goal is to expand the economic pie, and as the size of the pie grows, there will be more for everyone, no redistribution required. But when you get down to their actual policies, there are two standards for how this pie is shared: one for the rich, and a very different standard for everyone else.
For the rich, it’s always more tax breaks, fewer restrictions and no accountability for looting — i.e., eating more of the pie than you deserve. If there’s any economic growth — and the primary GOP policy is the failed model of austerity, so there’s no prospects for growth in Mr. Romney’s radical platform — the goal is to maintain control over the flow of wealth and income towards the top. So, yeah, increase the size of the pie, but the 1% get most of the increase, and the top 0.1% do extremely well. That’s the GOP’s whole economic plan.
For everyone else, it’s a zero-sum game, and the portion of the pie available to them keeps getting smaller, because there’s no check on the looting and the ability of the top 1% or so to siphon off economic gains. That’s been going one now for decades.
So here’s example #48,392: Should we reduce the immediate costs of those going into higher education? And how should we pay for it? The immediate issue is whether we should continue to subsidize student loans or allow those rates to double back to what they were before 2009. Obama says extend the low rates; Romney seems to agree, sorta, but what about the GOP Congress?
The enlightened general principle for hundreds of years begins with this: an educated population is the foundation not only for democracy, hence a free, self-governing people; it’s also essential to a vibrant economy — something our competitors clearly understand. It’s also a foundation for a humane society.
For these obvious reasons, America has from it’s beginnings supported public education with public dollars, collected by government via taxes. This is so fundamental, so obvious, so compelling, that we do it at the local level, augment it at the state level and provide additional federal funding, especially when states and local governments are struggling during economic downturns. We continue that with public Universities and Community Colleges. Americans historically believed that educating the populace is part of what it means to be an American.
So it was that a mostly Democratic Congress and the Obama Administration agreed in the 2009 Economic Recovery and Reinvestment Act — the so-called stimulus — to provide additional funding to states to keep them from firing teachers and closing schools during the recession. There were additional subsidies for student loans, both because student loan burdens are already excessive and shouldn’t be exacerbated with high interest rates, and — pay attention, Ms. Virginia — because student jobs would be scarcer than before and thus less able to support much higher college education costs.
As we were in a deep recession that might take years to reverse, the Act paid for these subsidized interest rates by borrowing money. That’s standard economics for people who remember economics, and as the standard texts predicted, during a recession and recovery period those interest charges for federal borrowing have remained in real terms at or near zero and are likely to remain there for a while, unless the Federal Reserve does something incredibly stupid and harmful. (If the GOP and the Dem deficit hysterics get their way, the recession could easily return and make any recovery even longer and harder.)
Now the period specified by the stimulus Act for the extra interest rate subsidies are about to expire, and the Administration and most Democrats in Congress want to extend those subsidies to prevent student loan interest rates from doubling. All of the logic that applied when the subsidies were first increased apply now, because the job situation has only slightly improved but not for graduating students, which means work-study/student jobs are also still limited. College costs have continued to climb, but the real cost of paying for this via borrowing is still essentially zero.
In other words, this is what scarecrows call a no-brainer. The United States now confronts an opportunity to invest in the education of its youth at historically low borrowing costs, but with a potential payback that would be the envy of the most avaricious Wall Street banker. It’s a great deal, and only a very stupid or evil nation would decline to make it.
Enter the Republican Party and the shockingly unenlightened members of the GOP House. In their universe, which can only be understood if you smash through to the other side of a black hole, public education is not that important, college is elitist and thus not important to a democratic republic or the economy, borrowing is sinful even when it’s virtually free and the investment payoff is big, and government shouldn’t be involved in student loans because it was better when banks could charge more interest and make more money.
But the public supports subsidized student loans. What should a stupid party do? If politics forces the GOP to subsidize those lazy human kids, then by God they’re going to extract a pound of flesh — almost literally, as ThinkProgress’ Igor Volsky reports, because they want to pay for this by taking money from highly effective preventive health care programs they once claimed to support.
The idea is to make the Dems pay for this by doing something unpopular. It’s always a zero sum game, but none of the players who can afford this stupid game — via higher taxes on the rich — are required to play. It’s a game for victims only, and the GOP isn’t happy unless someone is getting hurt.
This political season is a mess, and the choices are awful. How we change the menu to provide us better choices and real solutions to issues that are simply ignored for now is a very hard problem that will take a long time to sort out. But from where I stand, there is no more important immediate priority than getting rid of as many of these willfully stupid and unenlightened people as we can in the next election.
In the meantime, those of you who can’t stand to vote for anyone now could at least be pounding on the Democrats to at least understand and start making the arguments that were once commonly accepted by an enlightened nation.