Could a libertarian be the next president of the United States of America?
Well, not quite. But if former governor of New Mexico Gary Johnson has his way, libertarians could see their strongest – if admittedly still rather weak – ally in the White House since before the World Wars. Unlike all presidents in recent memory, Mr. Johnson has a real grasp of the damage that the military-industrial complex has done to America through corporate lobbyists working government contracts who provide incentives for leaders to instigate and prolong unnecessary wars. Equally anomalous is his real track record of actually reducing the size of government in his home state by cutting unnecessary bureaucracies and decreasing funding for programs that failed to live up to their promised potential. Gary Johnson supports the legalization of marijuana and a dramatic reduction in federal involvement in policing other drugs, believing that prohibition as a concept cannot succeed due to the inability of government to enforce it without adopting draconian policies and spending enormously on prisons and police. Along the same vein of thought, he opposes the Department of homeland Security’s ever-increasing border patrol operations and supports amnesty for illegal immigrants that would not confer upon them citizenship, but rather the right to work and move freely throughout the country coupled with the obligation to pay the same taxes as citizens. While governor, Mr. Johnson never raised taxes a penny and still managed to improve the financial situation of New Mexico. Add to all that his belief that education can and should be almost entirely privatized and a non-federal issue, and it’s clear he has a real and meaningful history of promoting freedom across a broad spectrum of issues, even in areas where the political climate is especially unfriendly to the libertarian cause.
So what’s in these videos?
Gary Johnson speaks about his political views, personal philosophy, and career as governor of New Mexico in videos 1, 2, and 3. He begins taking questions in video 4, where he takes a question paraphrased from Reddit Libertarians. Questions continue throughout videos 5, 6, and 7. I apologize for the fact that it’s hard to hear some of the questions. If it makes you feel any better, I couldn’t hear half of them when I was physically present. Try putting on headphones; they are usually louder than built-in speakers.
It’s simple, really. Ron Paul philosophically opposes the expanding American empire because it is killing our troops, wasting our taxpayer money, and destroying our reputation around the world. He knew that Barack Obama lied about wanting to end the war in Iraq and gave America an opportunity for a fundamentally different foreign policy.
Ron Paul knows that the War on Drugs is constitutionally unauthorized, morally obscene, and pragmatically a complete failure, and that is why he completely opposes all drug legislation and has voted against it every time.
Ron Paul also understands that the Federal Reserve has caused the boom and bust cycle and must be stopped so that the market can heal before the middle class is wiped out entirely. He stood staunchly against the Obamacare bill and was one of the few Congressmen who demonstrated philosophical justification for his belief that the market, not the government, could provide people with healthcare most effectively. He knows that Barack Obama is allied with corporations just as Bush was, and fears that government interference in trade inherently favors monopolies and corporate bullying instead of fair competition and prosperity.
At a time when even the allegedly anti-war Democrats were screaming for more government control, Ron Paul knew that the Department of Homeland Security was dangerous and evil at its outset, not years later when it was exposed for the damage that it has caused. In fact, Ron Paul was one of the very few Congressmen who attacked the PATRIOT Act upon its inception.
Ron Paul knows that the United States Constitution is the best defense of freedom that has ever been implemented in recorded history. He has always performed his Congressional duties with absolute respect for the Constitution and is one of the last remaining Congressmen who still believe that the Constitution was meant to radically limit the power of government to interfere in people’s lives.
Ron Paul predicted and understood the financial collapse years before it occurred and tried his best to prevent it, but was overwhelmed by a huge majority in Congress who favored more government control and blindness to economic realities over freedom and sensible policies. For many years he has been telling this country that the federal banks and their lobbying potential are dangerous and destructive to the economy and the freedoms of the American people. He stands alone as a stalwart voice of reason and liberty in a sea of Orwellian anti-humanism on Capitol Hill.
It is for this reason that I am proud to announce my personal commitment.
I am, of course, willing to accept help. If you are interested in making a donation when the time comes, subscribe to my blog by clicking on the button in the upper right, or reply below. If you plan to donate or, even better, if you plan to buy your own billboard, feel free to save this image and upload it as your profile picture on Facebook. The more visibility this image gets, the more hope we have for America.
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The first major lesson taught to a child in any American history class is the timeless story of the explorers, craftsmen, and pilgrims who left the European mainland to settle the New World centuries ago. Their motivations are known universally: They sought freedom from persecution, a new environment and culture to call their home, and, of course, an opportunity for very large profit. We remember their story as one of great heroism and moral triumph. Even though some chose the path of violence when interacting with the natives, still, overall, they worked hard, planned wisely, and eventually rose to achieve a higher standard of living and a more beautiful society through the productive actions of individuals. It is their struggle that formed the basis for the concept now known as the American Dream – the idea that America is a place where any motivated, industrious individual who will stay focused on his own life can ultimately fulfill his highest ambitions. Through the successes of the first immigrants, America became the land where nobody says, “That’s enough success.”
In modern America, though, this hallowed ideal has been flipped straight upon its head by many members of an intellectually lazy society and the careful obfuscaters of moral truth who guide them. Indeed, it shows great cunning and foresight on the part of the useless, parasitic busy-bodies who run the upper machinations of America’s legal system that they managed to turn the largest association of proud Americans and government skeptics – the religious right – against itself with regard to immigrants in the modern age. The Christian conservatives, who value a lifestyle of independence from government operatives and generally don’t feel that they need the government’s so-called “services”, cling to the border patrol and any macho-man politician who will break with politically-correct tradition by insulting Mexican immigrants as if their very lives depended on it. In some cases, they may even literally believe that this is the case. The problem with this perspective is quite simple to identify: There is simply and unequivocally no reason whatsoever that the government should control immigration in any way.
Every argument – or, “argument” – that has ever been raised in favor of immigration control is easily identifiable as deeply fallacious. At the outset, government action, which occurs by definition through the initiation of force against individuals, is unjustifiable when used preventatively against crimes that are imagined to occur. For the exact same reason that the government has no authority to confiscate a portion of every working man’s paycheck in the name of “social security”, so also border controls are just as evil. Immigration law is not law used to block, punish, or deter actual criminal activity, where there exists an assailant and a victim. It is an arbitrary prohibition, the punishment of a victimless crime. It is as unsubstantiated and subjective as asserting that a man has a right to drink alcohol in the privacy of his own home, but cannot also smoke marijuana, because that would be too dangerous.
After all, if walking across an imaginary line in the ground is something that requires the government’s permission, the government may just as well not allow any of it. Legal immigration could be capped at a quota of half a million people per year, or even zero people per year. Either way would be equally appropriate and morally valid, if the government had the authority to prohibit people from relocating. One cannot avoid the conclusion that the underlying assumption behind immigration law – the idea that borders represent a moral imperative in their own right, independent of any other justification – is deeply flawed and can straightaway be reduced to total absurdity.
With that assumption summarily destroyed, what remains in the void is a burning question: “Under what circumstances can there be a legitimate reason to enforce border control?” Indeed, a closer look reveals that there are no such circumstances. There is no violence, no infringement upon the rights of individuals, inherent in the action of traveling across a border. No assault is conducted; no person or property is harmed. Nor is immigration regulation necessary for the implementation of the more defensive functions of government. The FairTax and other taxes on final consumption do not require a list of citizens and permanent residents. The police are already available to protect everyone when necessary. The American courts can and should have a precedent of hearing any cases directly related to an action that transpired within the country. So the only government institutions left unaccounted for are, of course, the obviously illegitimate ones. An enumeration of the citizenry is reserved for functions such as welfare, income tax, espionage, and other corrupt and inexcusable violations of liberty. Lists of legal citizens and documentation of residences serve only to allow the imposition of property taxes, give the IRS too much authority to audit, and tempt demagogues to create terrorist lists in the name of national security. The government would have a much harder time invading the privacy of civilians if a certificate was not legally required for the simple fact of existing. If, for example, allowing uncontrolled immigration made enforcing the income tax so cumbersome and flawed that it had to be abandoned, that would truly be a wonderful day in American history.
Even with the victimless nature of the “crime” of illegal immigration identified, though, some authors and citizens continue to rebel against the obvious logical conclusion that the borders must be opened. This is where the brilliance and power of the social architects who oppose freedom and prosperity really shines. They argue distractions and obfuscations long after the core principles are elucidated. For example, one oft-repeated mantra is that opening the borders would violate the Rule of Law and thus expose society to any number of horrific effects. Amnesty for illegal immigrants is predicated on motives which could just as easily be used to justify amnesty for murderers, it is said. Columnists emphasize that illegal immigration is wrong because it is illegal, and therefore must be stopped. This argument, though, is self-defeating and evil. One cannot overstate the destructive capacity of deriving morality from legality. If breaking the law is morally wrong simply because it is breaking the law, then no form of dissent can ever be justified. If the government imposes a 99% income tax, or outlaws the possession of all weapons down to thumbtacks, surely the citizenry must obey, for that is the law. Clearly, laws which violently punish innocent individuals must be disregarded. In fact, the Rule of Law is a doctrine originally conceived for limiting governments, not civilians.
The aggravators frequently distract from the principles at stake by accusing illegal immigrants of harming the economy. Surely the enormous welfare benefits which are paid to illegals, in spite of the liberals’ frantic cries that this does not occur, must represent a significant portion of the national debt. Add to this the fact that it is all too easy for an undocumented immigrant to avoid the income tax while simultaneously outcompeting unskilled American citizens for the precious few remaining jobs in this depressed economy, and the sum of it all is one heck of a powerful argument … against government interventionism. This is the ultimate crux of the distractors’ and racketeers’ fallacious logic. They are unwilling to acknowledge that, in the most literal sense, all of the problems they attribute to illegal immigrants are actually caused by the government itself. The massive national debt occurs, not because illegal immigrants happen to be receiving welfare payouts, but because the government is willing and quite eager to tax and spend money from the working class in the first place. The unenforceability of the income tax is not a consequence of the population of undocumented immigrants, but rather of the illegitimate and frankly quite ridiculous nature of the tax itself. Finally, the jobs argument really attacks the government-imposed price floor on labor, which all economists agree will create shortages and reduce economic productivity. The logical position for any freedom-lover to take is that of opposition to the government interference that has rendered immigrants a resented class. The immigrants themselves are at worst guilty of being caught in the crossfire between middle class and bureaucracy.
Immigrants do not and cannot cause the federal debt to rise. Only government controls government spending. Uncovering this self-evident truth gives great insight into why illegal immigration is such a hot-button issue among the news media and liberal and conservative politicians alike. Establishment officials naturally fear authors and philosophers from the right wing, because the right’s opposition to government spending and waste puts the various government-corporate complexes and bureaucracies at risk. If the conservatives got their way, politicians and lawyers might have to find useful jobs instead of pushing papers at other people’s expense. Similarly, the establishment fears the left’s thinkers, as well. If any of a number of different liberal activists achieved real political pull, the government would not be able to arbitrarily outlaw simple personal behaviors. People could not be arrested and fined for harmless decisions. This, too, threatens to leave bullies of law enforcement out on the streets looking for work.
A simple solution to the government’s major problem is for the law enforcement and the bureaucracies to adopt a mutually beneficial stance of misdirection. Allegedly conservative officials dodge anger over government from real conservative voters by decrying those awful illegal immigrants for making the debt so high. Then, of course, it is not the fault of the Republican Congressmen that the debt keeps rising all the time. It must be blamed on the crazy liberals with their destructive love of illegals that somehow magically makes it impossible for Republicans in Congress to just vote “No” on spending bills. The liberals join in lock-step, demonizing the conservatives for ostracizing illegals, but not actually promoting a message even remotely related to true freedom. The two parties ultimately work together to increase border patrols, shoot innocent people, and not actually put any significant dent in the flow of illegal immigrants. A naive observer might wonder why so much effort is spent stopping illegal immigration when so little results are achieved. A libertarian observer, however, would note that the effort and expense was the goal all along. The government is simply generating more government activity. Stopping illegal immigration is one of hundreds of imagined causes the bureaucrats from the right and the left created to rationalize that. A few thousand people die, a few hundred thousand have their lives uprooted, but millions still make it through, because succeeding was never the object. Conservatives are mad at illegals instead of at the government that is wasting money, liberals have jobs and a way to buy votes by pretending to sympathize with illegals yet not taking any real action to open the borders, and the cycle continues.
If it should now be supposed that advocating for amnesty is the correct path toward freedom, let that idea be put to rest immediately. To use the word “amnesty” would imply that traversing an unseen line in the desert was ever a real crime at all. What would be appropriate at present is for lawmakers to agree that preemptive regulation against victimless crimes has not ever been a morally legitimate or practically feasible government scheme, that all who have been imprisoned by border patrol were thus mistreated, and, most astonishingly of all, that projects, codes, fences, arms, and soldiers dedicated to controlling the natural migration of human populations are and always have been a big-government racketeering project, that they are a waste of money designed to create work for talentless bureaucrats who otherwise would be incapable of competing in the job market, and that every working American would enjoy a much better quality of life without them.
The economic damage caused by the desire to prosecute against the victimless crime of traversing borders is difficult to estimate. Right off, it can be guaranteed that the entire cost of all border patrol officials as well as all the bureaucrats that handle paperwork for legal immigrants is entirely wasted money. Furthermore, had those workers not been employed in a destructive task, they could have sought jobs elsewhere, so their entire productive capacity over the span of their careers is potential profit and innovation which has not been brought to fruition. Finally, the tangible expenses of border patrol includes all the armaments and buildings used in the racketeering project. These expenses in total number in the trillions when considered over the past few decades. Then there are intangible and almost inestimable costs such as the productive power of more and cheaper labor as well as the interest accumulated on all the past expenses. Immigration control has been a continuous and severe blight on the United States economy for as long as anyone can remember. The accumulated cost with interest now exceeds that of the war in Iraq, the TARP bailouts, and the amount of money necessary to feed the entire continent of Africa for several years.
The unavoidable conclusion finally surfaces. Immigration laws are a racket and an excuse. They provide liberals with a moral crusade and demonizing talking points to draw attention away from confronting the economic sensibilities of the conservatives. Conservatives use them as a cover-up to hide their own unwillingness to actually cut government spending and repeal unnecessary laws. Ultimately, the dichotomy reveals itself to be just like all others – not one of left versus right, but of ordinary, freedom-loving individuals versus busy-bodies, elitists, and bigots. To employ a phrase that has recently become very popular in Washington, we need real solutions. Those real solutions are straightforward and obvious. The government can solve spending problems by just not spending. The abundance and frequency of illegal immigration can be solved by not outlawing non-violent behavior. As for what will be done with the new-found problem of massive unemployment among legislative paper-shufflers, department big-wigs, and bullying border gun-toters with badges, true American patriots neither know nor care.
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I respond in multiple parts:
The following links are relevant to the videos:
- UPDATE: As of Tuesday the 15th, it’s official: MSNBC has decided to defend Etheridge’s assault on the grounds that the students being assaulted were probably Republicans. They have also determined that it is still unwise to manhandle someone, especially if you get caught.
- The Guardian has joined MSNBC in explaining that the Congressman’s actions were not terrible and criminal due to the fact that the gentlemen pictured were almost certainly Republicans who knowingly disagreed with the Congressman and chose to breathe his air anyway.
- The Washington Post has called the incident a “gaffe”, declaring that it will not significantly affect Etheridge’s campaign for re-election and equating it with off-hand remarks made by Michelle Bachmann and Joe Wilson. That’s right, the Washington Post thinks that this is all about what Etheridge said, and not the fact that he physically attacked innocent young men.
- The New York Times has decided today is a good day to remember why Republicans aren’t allowed to shove people.
- Bob Etheridge assaults innocent civilians: the original video.
- Bob Etheridge’s contact information.
- Renee Elmers’ self-professed views.
- Frank Deatrich makes it clear that the federal government’s policy of redistributing wealth and controlling lives is simply not okay through his answers to this questionnaire.
To listen to the audio version, play the video below. To read the transcript, simply scroll down.
All right, friends. I’m supposed to be running a level-headed show here, but tonight, I am mad. I am very mad, because once again the demagogues are creating a racket by touting themselves as defenders against a real problem that Americans face and instead creating more of the same problem. It has now been 36 days since the Deepwater Horizon oil spill began, and there is no end in sight. Dozens of millions of gallons have already entered the Gulf, which is probably about how many dollars the news media and lawyers are making right now complaining and failing to produce any solution. Of course no solution has been found, because the government’s policies towards drilling ignore philosophy and human nature.
At every turn, at every new spike in pollution of the air and the sea by some careless mega-corporation, the federal government has responded by issuing greater regulation and tightening controls on industry in a racketeering attempt to say they did something. Better to pass an imperfect law than no law at all, right? But their strategy has never worked. There’s a million and ten ways for a company to pollute, accidentally or otherwise, and the nature of legislation is to be reactive. To stop pollution, we need policies that are proactive. We need to be able to anticipate catastrophic environmental damage before it occurs – not yell and legislate about it afterwards. The government cannot accomplish this. For the past century, it has been passing progressively more and more laws regulating businesses that deal directly with the environment, and yet oil spills keep happening, each one seemingly worse than the last. The polar ice caps are still melting, and the only response the feds have ever conceived is more barriers to entry in industry, more government-mandated inspections of rigs, and more taxing and spending. This has gradually increased the real cost of oil for middle class Americans and has never stopped corporations from inflicting collateral damage on the environment through misuse of communally-owned resources.
All of that, though, I have learned to begrudgingly accept. What has gotten me so enraged tonight is the fallacious sense of inevitability with which the whole ordeal is discussed. As soon as the extent of the damage of the spill came to light, the liberals immediately responded with their demands to punish the big, mean corporations for damaging our environment. They said we need more regulation and more government action against big business to show British Petroleum that they can’t just pollute our waters without some accountability. Then the conservatives replied with their predictable economic concerns. “Wait!”, they said. If you try to punish the oil companies by fining them and restricting their business, the cost will just roll over to consumers, raising the price of gas! Barriers to entry will reduce competition in the industry even further, and it will be more difficult for average Americans to maintain their standard of living. That’s the argument you hear – and you here it day in and day out. Take your pick, they say – either allow the corporate big wigs to wreak havoc on society and the planet without any accountability, or cripple the oil industry in regulation and let the American middle class take the hit anyway. And they give you those choices as if it is just natural – As if that’s just how things are supposed to be!
I am here to tell you that I don’t buy it. I don’t accept this dichotomy. The Republicans scream to protect the industry and the Democrats scream to protect the planet, and the result is that neither achieves any success. Government swoops in and does what it does, and when all is said and done, we keep having oil spills and the price of gas keeps going up. It is time for a philosophically different approach to drilling for oil. It is time to implement freedom and responsibility – to allow businesses to compete with one another in a free market to drive down the cost of oil while at the same time placing upon them the responsibility to maintain their own resources, free of pollution. Over the past century, we’ve had plenty of Democrats and plenty of Republicans take office and enact their plans to absolutely no avail. It is time for a new solution – the Libertarian solution.
In a Libertarian’s perspective, the Gulf oil spill is just one of millions of examples of what’s known as “The Tragedy of the Commons.” The tragedy goes like this: When individuals use resources that are owned by the community, it is in the interest of each individual to use the resources in a manner that is not in the interest of the community as a whole. The Commons gets depleted, because each person takes from them recklessly, conserving nothing for the future lest the others should get it first. To a Libertarian, the solution is self-evident: Do not have a Commons. When every individual actually owns a certain portion of the resources, it is in each person’s interest to conserve his own property, and he does not have the right to damage or intrude upon another person’s property.
What I am telling you here is that the only way to prevent oil spills is to privatize the oceans and release all government control of the oil industry. It isn’t hard to achieve. Simply auction off the waters in sections to whomever will develop them. Let the proceeds help pay off the federal debt. Each company or person that buys a section receives a deed to it just like land owners do. Then the protocol for polluting someone else’s waters is just as it would be dumping oil in your neighbor’s backyard: You can’t. If you do, your neighbor will sue you in a civil court.
In essence, what this will achieve is the complete freedom of the oil companies to compete amongst themselves to find the most efficient way of delivering oil to Americans cheaply while also internalizing 100% of the costs associated with pollution. By disincentivizing pollution instead of yelling about it, we will put an end to oil spills. No longer will companies be able to undertake careless practices and make tax-payers and their neighbors accept the consequences. There will be no more discussion of a “cap” for collateral damages; there will simply be no collateral damages. Anyone who commits an act of pollution will be taken to court by a complainant who will actually own property that suffered demonstrable damage. This contrasts sharply with our current system in which British Petroleum is essentially on trial against the government for crimes it allegedly committed against the whole planet. When all resources are in the hands of well-defined owners, there will be no more ambiguity of finger-pointing, no more argument about who hurt whom and how. Pollution will be unprofitable, plain and simple.
Perhaps you wonder, if this solution is so simple and effective, why it has not been tried before. The answer is just as obvious as freedom itself. Neither the government nor the corporations have any interest in adopting a policy of freedom and responsibility, so no such policy is ever considered. The concern that government regulation will harm big business is in itself a racket and a false source for angry punditry – government regulation is the source of big business. Does anyone know when was the last time that a new oil company was started? Of course you’ve never heard of a start-up in the oil industry making it big. The barriers to entry are insurmountable. The more the government legislates to try to save the environment, the more impossible they make it for anyone to get approved to start a new drilling project to compete against existing corporations. Through environmental demagoguery, they systematically reduce individual freedom. In doing so, the government creates an oligopoly through which all American industry is dependent upon a select few oil companies. These companies are in a position to demand whatever they want, because the American lifestyle cannot persist without oil. As such, they are never held truly accountable because to punish them as they deserve would cripple society – and so, there is no responsibility, either.
To privatize the oceans and regard them as resources to be used freely without causing damage to other people’s property would break the intimate relationship that corporate lobbyists have established with legislators. When legislators no longer interfere in business, corporate lobbyists no longer have any reason to win their favor. The billions of dollars spent on maintaining large legal departments and publicizing court cases to pressure legislators and raise public concern would no longer be necessary. The savings would roll over into lowering gas prices for you and me. The racket would end. We would stop seeing Congressmen and business executives speaking on the news every day about the ongoing controversies and the need for taking some unspecified action to calm everyone’s anger. Instead of shouting at bad behavior, we’d be disincentivizing it. True freedom and responsibility is the only way to end the tragedy.
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To listen to the audio version, play the video below. To read the transcript, simply scroll down.
Hello, internet. Today I’m here to talk to you about a serious threat to the stability of our economic system and our lifestyle in general. It is the “brain bubble”, a systemic miscalculation of how society’s resources should be allocated to education. To understand the severity of the threat posed by the brain bubble, we must first explore the basic misunderstandings of economics from which the whole problem stems.
The economy is simply the word economists use to describe the aggregate of all the things that people do with their capital. Capital is anything that exists through time and has value. Land and machines are good examples of capital. With capital, people can perform activities that produce valuable output. For example, with land and machines a company can maintain a manufacturing plant that produces stuffed animals or food products to sell.
The decision to allocate some capital, also called “resources”, to a particular economic activity is called “investment”. At any given time, there is only a certain amount of capital in the world, so society must be wise in how it invests. The world should not, for example, use half of all its factories to make stuffed elephants if only five percent of people actually want a stuffed elephant. The economy needs a system by which people can decide whether to invest their capital in a particular venture or not.
Fortunately, such a system exists in the form of interest rates. Money represents capital, in the sense that it can be traded for capital and vice-versa. Loans of money, therefore, are an investment by the lender in whatever the venture for which the loan is made. In a free market, interest rates on loans will tend to equal the average expected return value for investments in general. If a company borrows money to perform an activity, and that activity has a return that is greater than the interest rate, the company will pay off the loan and then expand. If instead the venture returns less than the over-all interest rate, the company will have to close its operations in order to repay the loan.
Suppose, for example, that I have imagined a better kind of soda than what is currently on the market. I think I can provide people with a beverage that tastes better than Coke or Pespi and costs less. An investor can make me a loan, with which I can build a factory and start marketing my product. If I’m right, and people want what I’m selling, then my sales will spread rapidly through the soda market, and I will turn a large profit. With that profit, I will pay back my lender plus interest, thus justifying his initial investment in me. If I am wrong, and my invention was not a good idea, then I will turn a small profit or none at all, I will be unable to make the interest payments on my loan, and my lender will not earn money on his investment. This discourages lenders from investing in products and services that people don’t want. This is the policy by which capital is invested in useful ventures.
Your actions are also business ventures. People can invest in you. They can do this, for example, by granting you a student loan so that you can go to college. If your activities after college prove highly productive, you will earn a large salary, and will pay off your student loan with interest. If instead you are lazy or dumb, or if you simply want to pursue a lifestyle that does not involve a lot of economic activity, your lender will lose money on you. This, of course, creates an incentive for lenders to try to determine the expected productive output of students while they are in college. Students who are likely to pursue high-end careers that require a lot of education will tend to get larger loans, while students who will not apply a degree in a productive fashion will be offered smaller loans or no loans at all.
At least, all of that would be true if interest rates were unregulated, student loans came from private investors with individual responsibility for the success or failure of the loans, and college education had a definable cost to each individual who received it. Instead, investors have been required to issue student loans through federal programs, at federally-approved interest rates, for the past several decades. The cost of college education has been increasingly subsidized and controlled by both federal and state governments. More recently, President Obama nationalized the entire student loan program, with the reasoning that attempts by lenders to profit from their investments were interfering with students’ opportunities for education.
The result of all this is that the discriminating factor in investing – the need for investors to profit on their investments – has been totally removed from the equation of who gets a student loan and how much they get. Student loans are no more or less likely to go to students that will actually make use of them and be able to pay them back than to students who have no future in higher education and have no ability to repay their loans at all. That would be fine if society had an infinite amount of educational resources to allocate to whomever the government pleased. However, resources are finite, and every dollar that is spent educating someone who will not work to pay back his loans is a dollar that could have been spent educating a more productive citizen or building a factory to produce food to end world hunger.
The progressives will tell you that investment in education almost always has a positive economic return. That is emphatically not true. Hundreds of thousands of students with federal loans cannot pay them back, and the problem is so widespread that Obama already has plans to “bail out” the student loans and nullify the debt. Even if it were true that education always produces positive returns on investments, that is still a construct of a government-regulated, artificially low interest rate which ignores the opportunity costs associated with investment. By forcing interest rates to be lower than the free market would naturally make them, the federal government has made it profitable to invest in students whose activities after graduation do not economically justify the initial investment.
By removing the need to allocate resources to education in precisely so far as it is efficient to do so and no farther, the federal government has created a brain bubble. Loads of people are going to college, no matter how much it costs, and no matter whether they actually care about their degree or have any plans to enter a specialized career after graduation. Students who don’t need a college degree can get federal loans, and, if they don’t ever make enough money to justify those loans, they will be absolved of all debt under Obama’s new plan.
The cost of college has soared exponentially above the rate of inflation over the past several decades. Every time book prices, tuition, and boarding costs go up, the federal government has responded by subsidizing higher education even more heavily, enforcing stricter regulation on lenders, and lowering interest rates. These policies are promoted as being necessary to allow people to continue to get a good education in spite of rising costs. The entire strategy has never worked, not even a little bit. At every turn the government has tried to curb rising costs by subsidizing even further, removing even more of the ever-dwindling incentive to allocate resources efficiently. Even as technology gets cheaper, books get easier to produce, dormitories become better-designed, and educational techniques get ever-more refined, the cost of higher education continues to balloon. In all of the government’s attempted analysis of this situation, the one question that is never asked is, “Why are costs going up?”
They are going up, plain and simple, because the interest-rate information, the driving need to supply education to those who will make use of it and not to others, has been destroyed. It has been destroyed by the very same policies that were meant to make education accessible to everyone. Costs will not go down because the government yells or the people protest. The only strategy that can mitigate the cost of college education is the cessation of all subsidies and the release of the government’s grip on interest rates. When lenders are allowed to seek profit in the loans they grant to students, colleges will again have an incentive to minimize tuition, and students will have an incentive to work hard in school to prove their academic worth.
However, it is clear that strategy will not be adopted in America barring massive political upheaval. Instead, through Obama’s recent decision to totally nationalize the student loan program and eliminate any remaining profits, college tuition costs have again spiked. Obama has set a precedent now that loans can be given to anyone for any reason. If the loan cannot ever be paid back, the government will bail out the lender. All incentive for fiscal responsibility and economic efficiency is gone.
The cost of college will continue to grow over the next ten to fifteen years. No later than 2030, the government will go completely bankrupt, and colleges will no longer be able to accept payment promises through Federal Reserve notes. When that happens, the brain bubble will burst. College will be so outlandishly expensive that no one will be able to afford it without federal assistance, and no federal assistance will be forthcoming. The well will run dry. When the government is no longer able to bail out society today with money it hopes will be created tomorrow, the college market itself will collapse. Dormitories will sit empty for years in much the same way that houses have been abandoned since the 2008 housing crisis. Just like all bubbles before it, the brain bubble is a result of systemic over-investment without regard for actual returns. It is guaranteed to burst, and the result will be an entire generation of Americans who will not have any of the skills of higher education.