Bernie Sanders tells us all that the richer part of society is real hard done by and should gain a massive present from the rest of us — a $1.6 trillion present, that is, because that’s the value of the student debt he would cancel. It’s possible he might have this socialism stuff a little confused. Sure, take from everyone, that’s nicely socialist. But concentrating the bounty upon those already richer, those who have already been to college, that seems rather against the underlying idea, doesn’t it?
We could quibble a bit about his desire to make college free in the future. It’s not entirely obvious that we’re all going to be made richer by an increase in grievance studies graduates, for example. And the argument in favor of going to college is that it makes the people who go richer. So, people can pay for their own educations out of their own future higher wages. Why should the people who don’t go and don’t benefit pay higher taxes for those golden children who soar into academe?
The central economic point here is that earning a college degree does lead to a higher income. Some major in grievance studies and thus compete for barista positions. But on average, as many point out, there’s a considerable wage premium to having graduated. So, why is the general taxpayer supposed to be on the hook for this? It’s not, after all, a universal benefit, and there’s no way we’d even want it to be. The benefit really does flow to those who will be richer — let them pay for it.
But when we start to discuss canceling past debt, then we’re spiraling off into La-La Land. Sure, this is extreme, but it’s also true. There’s at least one kid out there with perhaps $200,000 of student debt who also, upon graduation last year, started at some bulge-bracket bank earning $120,000 or more. He’s on track to be one of the masters of the universe, and people want to spend precious taxpayer dollars to forgive his student loans?
That example isn’t actually so extreme. The average income of those with a college degree is some 1.8 times that of those without one. A large number of people looked at this deal and went to college, agreeing to pay for it through loans. Now kind Uncle Bernie comes along and taxes everyone to alleviate the pain of college graduates with student loans? How pro-rich do you get to be in your handouts before people laugh when you call yourself socialist?
Those who went to college are already rich, or they’re well on the way to getting there (again, unless they wasted their time majoring in grievance studies). There simply is no rational argument in favor of a subsidy from general tax revenues to this group of people. It’s a grossly pro-rich suggestion. It’s a privatization of the profits, those higher incomes, and a socialization of the losses, those fees that were paid.
The only argument in favor is that large numbers of recent graduates will vote, entirely selfishly, for someone who promises to alleviate their debt. Or, as we could also put the same idea, Sanders wants to buy their votes with $1.6 trillion of our money. Again, this is a private benefit to Sanders at the public cost to the rest of us.
At least that does show us that Sanders is not some new and different sort of politician. After all, politics is the art of buying sufficient votes with other people’s money, isn’t it? It appears that he’s pretty good at that.
Tim Worstall (@worstall) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a senior fellow at the Adam Smith Institute. You can read all his pieces at the Continental Telegraph.
