Opinion: When Tuesday never comes
Those old enough may recall the character Wimpy from the Popeye cartoon series; a rotund, mustached, middle-aged man, forever strapped for cash, imploring others to temporarily finance his craving for hamburgers with the entreaty, “I’d gladly pay you Tuesday for a hamburger today.” The Popeye cartoon fan site, www.popeye.fandom.com, describes Wimpy as follows:
“He is highly intelligent and well educated, but very lazy and gluttonous. Wimpy is also something of a scam artist and … can be quite underhanded at times, employing over 100 unique tactics to obtain free food from Rough House, and usually succeeding in the end.”
While I must have spent several hundred hours watching Popeye cartoons as a child, I can’t recall having ever witnessed Wimpy make repayment on so much as one of those culinary advances. Having been raised to believe that the repayment of debt was an almost sacred obligation, I assumed that Wimpy was a cartoonist’s invention and could not be found in real life, just as a spinach-eating superhero was surely the product of an artist’s fertile imagination. But recent headlines have prompted me to reconsider that childish conclusion.
On February 5, Congressional Democrats introduced a resolution calling on President Biden to cancel $50,000 in student loan debt for each individual borrower, arguing that the Higher Education Act of 1965 provides the White House with the necessary authority without seeking Congressional approval.
The United States Government’s first foray into the student loan market was in 1958 with the National Defense Education Act (NDEA). NDEA loans were only available to students studying selected disciplines such as engineering, the sciences, and education, and were created as a direct response to the U.S.’s perceived trailing of the Soviet Union in the areas of science and technology. In 1965, the government-backed loan program was extended to students in other disciplines through the Higher Education Act of 1965.
The loans, provided through the National Defense Education Act and the Higher Education Act of 1965, were extended by private financial institutions, with the federal government acting as a guarantor of the debt. But beginning in 1993, with the passage of the Student Loan Reform Act, the federal government was granted the authority to make loans directly to students rather than simply serving as a guarantor of the student debt. This mix of government-funded and privately-funded student loans remained the model until 2010 when the Obama administration, needing a revenue source to partially offset the increase in the National Debt which would be produced by the Affordable Care Act (Obamacare), asserted that the elimination of the banks and other private middlemen would produce a revenue source for the federal government which could be used to fund other programs. So government-insured, privately-funded student loans ceased to exist, replaced by a portfolio of government-direct student loans. The Congressional Budget Office (CBO) estimated that the new program, the Health Care and Education Reconciliation Act, would save $61 billion dollars over a period of 10 years, offsetting some of the cost of the Affordable Care Act. Those estimates were fiction. By 2015, the CBO estimate had been revised, projecting that the new program would actually cost the American taxpayers $27 billion over 10 years.
In June 2010, shortly after the passage of the Health Care and Education Reconciliation Act, total student loan debt stood at $833 Billion. Today, less than 11 years later, it amounts to more than $1.7 trillion (www.finaid.org/loans/studentloandebtclock/). Now Democratic lawmakers are proposing that the government forgive $50,000 of each student’s loan balance, a move which CNBC estimates would reduce the outstanding student loan debt from somewhere in excess of $1.7 Trillion to approximately $700 Billion, completely eliminating the debt of around 80 percent of all student loan debtors.
Lost in all of the euphoria over the largess of the Democratic Party is the question of who will bear the burden of paying for all of this debt-forgiveness. It will be the American taxpayer. Perhaps not you, since approximately half of all Americans pay no federal income tax, although you will share in the burden of hyperinflation as the increased federal debt funded by either additional borrowing or the printing of money will increase the cost of every product or service you purchase. But the actual servicing of the student forgiveness portion of the national debt will come out of the pockets of current and future generations of American taxpayers, many of whom did not attend college. And while Progressive lawmakers will assert that the country as a whole benefits from the higher education achievements of each individual American, can anyone really argue with a straight face that a Gender Studies Degree from Yale University provides more economic lift to a nation’s prosperity than a high school graduate who learns to weld, then goes out into the oil fields of West Texas or Kern County, maintaining vital equipment for one of America’s most important industries?
Well, someone probably can. At least that appears to be the case for a group of Democratic lawmakers who would have America’s working class fund the higher educations of individuals such as myself who were blessed to have the opportunity to gain one or more higher education degrees. But, unlike Wimpy, I really wouldn’t feel comfortable eating a hamburger purchased by the blood and sweat of another individual. It just wouldn’t taste right, and it would violate all that I and millions of other Americans were taught about paying your own way. But there will be those who will be perfectly happy if Tuesday never comes. Chuck Schumer, Elizabeth Warren, Ayanna Pressley, Ilhan Omar, and others of their ilk are counting on it.
— Victor E. Thayer,