Critics will always argue whether it's "worth it" to help people in need.
After its precipitous fall in February of 2020, the government took major steps to stabilize it.
By Monday, November 16th, the Dow had surpassed all previous records, closing at 29,950. Meanwhile, the national death rate as a result of COVID-19 was rising toward its horrifying January peak. Meanwhile, working Americans continued to struggle and suffer, wasting their gas money waiting in endless lines for limited supplies of free food.
If you, like nearly half of U.S. adults, don't own any stock at all, the numbers above are essentially meaningless. Even for most of the people who are invested in the stock market, their investment isn't substantial enough to make up for issues like widespread underemployment.
And yet, the Federal Reserve has poured $4 trillion into maintaining the stability of investment markets and ensuring that the Dow, the S&P 500 and various other numbers on charts that seem increasingly disconnected from reality move in the right direction. Why is that?
30 million people in this country are at risk of eviction. Millions of people are unemployed or underemployed from… https://t.co/pWGQY94iJT— Alexandria Ocasio-Cortez (@Alexandria Ocasio-Cortez)1605753584.0
The answer to that question is complicated, but it is closely linked to the reason why President Joe Biden has been on the receiving end of a lot of scrutiny and pushback on the topic of student loan forgiveness — and why he hasn't already taken steps to cancel some or all of student debt already.
Recently the amount of student loan debt in the United States surpassed $1.7 trillion. That amount has more than tripled in the last 15 years, with around 45 million Americans currently holding some amount of student loan debt, and an average burden in excess of $30,000.
Most of that debt is nearly impossible to discharge through the standard bankruptcy process. And the fact that most of that burden falls on young people — whose careers are less established and who face generational declines in wages and wealth — exacerbates the impact of that debt. It's a major factor in the worrying declines in rates of home ownership, marriage, and birth rate among millennials.
It is widely acknowledged that the cost of higher education has ballooned out of control while it has increasingly been pushed as a necessary step on the path to prosperity. Underlying this problem is the fact that — unlike many developed nations — our federal government doesn't offer affordable public universities or fund education in fields like medicine and engineering where we always need more skilled professionals.
Why Is College So Expensive in America? | Making Cents | NowThis www.youtube.com
Instead we offer government-backed loans and guarantees that incentivize institutions to invest in administrative bloat and in expensive development projects to enhance their prestige and entice prospective students with unnecessary luxuries. Teenagers instilled with little sense of the financial commitments — but an unwavering belief in the necessity of college — have become cash cows.
The system as it stands is clearly broken, and whatever other reforms are called for, the resulting debt crisis is interfering with the spending power and attainment of an entire generation. In the context of a pandemic that has affected the livelihoods of so many, it would seem like an uncontroversial act for the government to alleviate some of that burden of student debt.
And for the most part, it is. Opinion polling shows that the notion of providing some amount of student loan forgiveness is broadly popular across partisan lines.
The exception is among the pundit class — and the wealthy donors they represent. Because, while various political figures — including Democratic Senators Chuck Schumer and Elizabeth Warren — have urged Joe Biden to make student loan forgiveness an early focus of his presidency, others in politics and the news media have done their best to push back.
When you say #cancelstudentdebt, you’re saying a minority of people who had the advantage of obtaining a degree sho… https://t.co/BMbhxUHAbK— Dan Crenshaw (@Dan Crenshaw)1561467692.0
At the moment, a forbearance measure laid out in the CARES act has been extended through the remainder of 2020 — allowing those with federal student loans to defer payments for the time being. But further action being proposed would include forgiveness for debt owed to private companies.
Among the wide range of suggestions are legislation to provide $10,000 of debt forgiveness for individuals meeting certain restrictive criteria and $50,000 of automatic forgiveness for all student debt holders — which Joe Biden could theoretically have delivered through an executive order as soon as he took office.
In either case, some would still be left with large burdens of debt, and some would likely be hit with unmanageable tax bills — as debt forgiveness is considered a form of income. But the debate has not largely involved addressing those shortcomings. Rather, many have questioned whether we should be considering these proposals at all.
The objections tend to fall into three categories: It wouldn't help the right people, it wouldn't stimulate the economy as much as other measures, and "I paid off my student loans, so why shouldn't they?"
The last is patently asinine, and should be ignored or mocked as it applies equally to any form of progress — "My face healed after smashing against the dashboard, so why should we add airbags now?" If the people espousing this perspective want to be acknowledged for their fiscal responsibility, here's the entirety of the praise they deserve: Good for you.
The fact remains that many people are not able to pay off their student loan debts, which can have a ruinous effect on their credit rating, affecting everything from interest rates on other loans to — in a cruel twist — their employment prospects. There is a disturbing potential for an accelerating debt cycle that becomes impossible to escape.
“Things were bad for me, so they should stay bad for everyone else” is not a good argument against debt cancellatio… https://t.co/yyC60K5Uyz— Alexandria Ocasio-Cortez (@Alexandria Ocasio-Cortez)1605569343.0
Even for those who are able to pay off their debts may feel pressured by the monthly payments to accept employment that they otherwise wouldn't — contributing to an imbalance in the employee-employer relationship that could further suppress wages. In short, it's bad.
So while it's valid to point out that there are others in the economy more in need than college graduates, we can't ignore the reality of the student debt crisis. Along with other important measures — further extension and expansion of unemployment benefits, rent subsidies, and direct payments to make it easier for people to stay home — student loan forgiveness should be considered an essential part of COVID relief.
Which leaves only one complaint left: It wouldn't do enough to stimulate the economy.
The basic issue is that the benefit of debt forgiveness is spread out over years or decades of remaining loan payments. And because it would also contribute to recipient's tax burdens, there is a concern that much of the cost of debt relief would not result in short term increases in consumer spending — the kind that spurs quick economic growth.
You know what would be an effective stimulus program? Canceling student debt. President Biden can do it today and I… https://t.co/njh0M5pfOu— Ed Markey (@Ed Markey)1612456122.0
While that's worth being aware of, doesn't this objection have its priorities reversed? Isn't the entire purpose of a strong economy to improve people's lives? So why are we unwilling to improve people's lives unless it primarily contributes to short term economic growth?
Clearly our entire system has embraced this inverted way of thinking. That's why it can pass almost without notice when the Federal Reserve spends $4 trillion to prop up investment markets.
We happily spend that amount on measures that only directly benefit the wealthy, and yet — when it's suggested that we should spend a fraction of that on a popular policy that could improve the lives of 45 million Americans — it becomes a point of great contention.
We all seem to have forgotten the essential truth that the economy is meant to serve us — not the other way around.
Look on our works, ye mighty, and despair!
There is a saying that it is easier to imagine the end of the world than to imagine the end of capitalism.
Entrenched systems of power have established bulwarks against the kind of institutional reform that younger Americans have recently been pushing for. By controlling the political conversation through lobbying, control of mass media, regulatory capture, and authoring of legislation, the ultra-wealthy maintain the status quo in a way that makes changing it seem impossible. The problem is that change is desperately needed if we are going to maintain any semblance of civilization.
While political dynamics have become so rigid that the boundaries of what we can achieve begin to feel impenetrable, the COVID-19 pandemic has revealed that the vital structures of our society—a society that is superficially so robust—have been so weakened that a collapse in one form or another is inevitable. We are the world's superpower, yet faced with a slightly more contagious, slightly more lethal virus than the flu, we are powerless. How did it get to be this bad? How were we so blind to it?
To clarify, depending on the part of the country you live in, it could seem like I'm exaggerating. It may not seem "so bad," or like we're on the verge of collapse. Not long ago the president and many of his loyalists on Fox News and AM radio were still calling dire forecasts around the coronavirus a hoax. At the time it seemed reckless but not unhinged from current events—which were still largely unaffected. In much of the country there is little cause for alarm, so few people are doing much to change their behavior. That's about to change, and the areas hit worst will soon be making the dire choices that Italian hospitals were recently faced with—which patients are we going to hook up to ventilators, and which are we going to allow to die. We are already started on a path that leads to overflowing hospitals in every major city.
A makeshift testing facility in Seattle, Washington Getty Images
The problem is that our entire economy is set up around the same kind of short-term thinking that drive publicly traded corporations. The mentality that "government should be run like a business," leads to cost-cutting measures that only look to the current budget, with minimal consideration given to the kind of intermittent crises that we are bound to face—like a viral pandemic. If it's not particularly likely to happen before the next election cycle, it's better not to even worry about it. This is the kind of thinking that led Donald Trump's administration to push for cuts to the CDC and to disband their global health security team in 2018.
But the systemic issues go much deeper than that and started long before Trump took office. Trump and his ilk can't be blamed for the fact that the US has two hospital beds for every 1,000 citizens. Nor are they responsible for the fact that almost every aspect of America's critical infrastructure receives a near-failing grade from the American Society of Civil Engineers. This includes airport congestion—which has already become an issue with the current pandemic—and important shipping routes that we will rely on to maintain the movement of necessary goods as conditions around the country worsen.
Add to those issues the fact that we have a massive population of prisoners sharing tight quarters with poor sanitation, a substantial homeless population with no way to quarantine, a dearth of worker protections like paid sick leave, and it becomes hard to imagine how we'll get through this unscathed. And, of course, this is still ignoring the elephant in the room—a for-profit healthcare system that discourages millions of uninsured and underinsured Americans from seeking medical advice or treatment until it's too late.
Meanwhile, the economic hardships imposed by the necessity of social distancing are being exacerbated by an economy that is heavily reliant on the whims of financial speculators who create an echo chamber of divestment that heightens every crisis. The stock market, in other words, is going crazy in the worst possible way. It's too soon to say how thoroughly the weaknesses in our system will be tested by the developing pandemic, but even in the best case scenario they are going to be strained to a terrifying extent.
Fortunately, there are efforts underway to shore up some of the most obvious breaking points so we can avoid complete societal collapse. They may turn out to be too little too late, but even if they get us through this current disaster, how long will it be before the next one hits? The best models of climate change predict that we are nearing an era that will be ruled by powerful natural disasters and refugee crises that will threaten economic stability and critical infrastructure and may heighten the threat of infectious diseases. Temporary, reactive measures cannot save us if the next crisis hits a little harder or when multiple crises overlap.
A strong social safety net like the one the US tried to develop under FDR would serve to mitigate the damage from this kind of crisis. But modern American politics has worked for decades—in an effort that became an object of worship under Ronald Reagan—to whittle the welfare state of the New Deal and the Great Society down to a fragile bare minimum.
We need to take seriously the voices of politicians like Bernie Sanders and Alexandria Ocasio-Cortez who have called for the kind of broad, sweeping legislation that stands a chance of upending the rigid political dynamics that maintain the status quo. The Green New Deal would be a good start. The alternative, one way or another, is the end of our civilization and the world as we know it.
His latest insanity involved claiming that the coronavirus is both "the common cold," and a bio-weapon designed by China.
There are few people in American media as reliably unhinged and distasteful as Rush Limbaugh.
But to many in his audience of more than 15 million weekly listeners, Limbaugh is a bastion of straight talk. Since the late 1980s, his brand of antisocial advocacy has twisted and infected the nation's political conversations.
What makes Limbaugh so compelling is that he never pulls punches or offers any deference to basic human decency. He will fight for the rights of smokers to choke a restaurant with clouds of thick smoke, will happily claim that Planned Parenthood is committing genocide against black Americans, and will never shrink from accusing Michael J. Fox of "exaggerating the effects" of Parkinson's disease with no evidence beyond the fact that Limbaugh himself can do a morbid pantomime of wild muscle spasms. To regular listeners, these unequivocal stances reflect Rush's willingness to stand up to the leftist authoritarians and the woke scolds of the world. He speaks truth to power… Unless of course Republicans control the levers of power, in which case Rush will speak in power's defense.
That was the case on Monday, when Rush managed to argue—in the span of a few minutes—that COVID-19 (colloquially known as the coronavirus) is both "the common cold," and "a Chicom laboratory experiment that is in the process of being weaponized." Chicom is a reference to China's ruling Communist party, whom Rush is accusing of deliberately manufacturing this new strain of virus as a form of biological warfare. But due to their incompetence or some nefarious ulterior motive that involves getting everyone only mildly ill, their biological weapon is—according to Rush—"the common cold."
As evidence of its mildness, Rush cites the low mortality rate—"98% of people who get the coronavirus survive." Of course, this would seem to undermine the sinister plot that Rush has espied through his omniscience, if not for his clever discovery of Chicom's co-conspirators: the mainstream media. "The drive-by media hype of this thing as a pandemic, as the Andromeda strain, as, 'Oh, my God, if you get it, you're dead.'"
There's no doubt that the media has a history of exaggerating the potential danger of emerging epidemics—ask anyone who had the Swine flu and shrugged it off. It makes for a gripping story to tell viewers that a new disease that's spreading is coming to kill them and their loved ones, but the famously pro-communist "drive-by" media is legitimately too distractible to really focus on overblowing a health crisis while also covering election drama, Megxit, Trump's pardons, and Harvey Weinstein. So if they are giving the coronavirus too much hype, it can only be part of an elaborate conspiracy with Xi Jinping and the Chinese government…but to what end?
As always, in times of uncertainty, we turn to Rush Limbaugh for the answer: "The way it is being weaponized is by virtue of the media, and I think that it is an effort to bring down Trump, and one of the ways it's being used to do this is to scare the investors, to scare people in business. It's to scare people into not buying Treasury bills at auctions. It's to scare people into leaving, cashing out of the stock market—and sure enough, as the show began today, the stock market—the Dow Jones Industrial Average—was down about 900 points, supposedly because of the latest news about the spread of the coronavirus."
Fascinating. Meanwhile the fact that nearly 3,000 deaths have occurred—with more than 80,000 confirmed cases and outbreaks spreading in Italy, Iran, South Korea, and Japan—must all be part of the hype. The fact that the virus is wildly contagious and not well understood is part of the hype. The facts that the entire city of Wuhan—with a population of over 11 million—is under strict quarantine and that containment measures throughout China are disrupting office work, manufacturing, and transportation is all part of a clever, convoluted plan to hurt the presidency of Donald Trump. The fact that tourism and travel have dropped off around the world, and that various companies have reported losses as a result of the virus and the measures taken to combat it, it's all just calculated to undermine President Trump's singular metric of success—the surging "economy" embodied in the stock market.
Because there can't possibly be anything wrong with structuring economic policy entirely around a foundation of volatile investor speculation and a faith in limitless corporate growth. No, the strategy would be perfect if it weren't for the forces of evil aligning against Donald Trump to control global events in a way that hurts his political chances. In that sense, it's only reasonable for President Trump to dangle military aid in front of foreign leaders in exchange for dirt and propaganda against his political rivals. It's the only way he can fight back!
This latest drama comes on the heels of Limbaugh's receipt of the Presidential Medal of Freedom during President Trump's State of the Union Address—an honor which Limbaugh pretended to be surprised by. Some people have criticized the decision to give such a prestigious award to the kind of man who would glibly invent conspiracies about Chinese bio-weapons and downplay the severity of a little-understood contagion. On the other hand, if anyone should know about the dangers of viral respiratory infections—and the deadly pneumonia that can result in people with compromised systems—it's surely Rush Limbaugh. He is, after all, currently being treated for stage four lung cancer and is unlikely to recover.
That last point is worth restating: Rush Limbaugh most likely will not be with us for much longer. It's an important thought to keep in mind when things seem bleak.
Investing on the stock market can be intimidating, but we're here to help
Millennials don't trust the stock market.
That is the finding from the most recent Merrill Edge Report, which found 66% of Millennials trusted their savings accounts would be reliable in 20 years. In contrast, 71% Gen-Xers trust in their 401(k), while 54% of Baby Boomers believe in their pension. Generationally, it makes sense. Rock-solid pensions of the distant past were a foolproof reward for a life's work. The rise of the stock market from the 1980s-2000s made the same 401(k) seem like a safe profitable bet. And, the financial crisis of 2008–spurred on by massive institutional fraud rewarded with federal taxpayer bailouts—combined with years of stagnant wage growth, ever-increasing income inequality, and ever-higher cost-of-living expenses, means younger workers trust their saving accounts and nothing else. Can you blame them?
(Once and for all, avocado toast plays no role in whether Millennials save for a starter home. It's the impenetrable big-bucks-or-GTFO economy, not the breakfast food, stupid.)
It's understandable, but it's not necessarily prudent.
It's good to have savings, of course, but more as a short-term emergency fund. Long-term, there simply isn't enough of a reward. The national percentage yield average of traditional banks is only .07%, going up to 1.0% or a bit higher at at online banks. Look at it this way, banks take money from savings accounts and loan it out at much higher rates, so you're making it easier for fat cats who already live on easy street.
Investing is smarter for future financial health, and it isn't just for the wealthy. Here are some tips to get started, even with a small amount. Warren Buffett defines investing as "the process of laying out money now to receive more in the future." Your portfolio probably won't get up to $87-billion, but a little piece of Buffet's pie will offer future peace of mind. The "Oracle of Omaha" bought his first stock at 11, you've got catching up to do. Thus:
Get Started Today:
Investing can be intimidating, and nobody likes a no-fun eat-your-vegetables spending scold. (See: toast, avocado.) However, adding a few nip-and-spending-tucks, could give you an extra $10 a week, which is $40 a month to invest, almost $500 a year. Start with whatever you can afford because the longer you're in, the more money you'll make. Even if you start out with a saving account, getting in the habit is the important thing.
Collect Change in a Coffee Can:
If formal budgeting of some sort is too tough, try throwing loose change, crumpled dollar bills, and random poker winnings into a coffee can designated for investments. It sounds silly, but it adds up. It takes diligence not to treat the can as a beer slush fund, but it's an easy way to contribute more to your starter investment kit. There are also more options available if you start out with $1,000 than $100, so whatever gets you there.
Talk to a Professional:
Once you've decided investing makes sense, go to your bank and talk to someone about basic investment strategies. You may grasp the difference between low-initial-investment mutual funds (investments in a portfolio of stocks and bonds) and Treasury securities (savings bonds), but it helps to get outside advice on what is a better starting point. For a lot of us, financial literacy begins and ends with our bank accounts, so seek out those who know the basics of expanding your portfolio.
Enroll in Your Employer's Retirement Plan:
Here's a quick story about a stupid Gen-Xer, me. I once spent a year at a company without investing in my 401(k) until a co-worker told me "You know that's free money, right?" (Ron Howard voice: He did not.) The term "free money" is somewhat fungible, but many employers match whatever you contribute to the 401(k), which compounds over time. Start at 1% of your salary if it's all you can afford and increase it over time until it's a full match. Whatever you contribute, the retirement fund doubles. Call your HR department today.
Get Set Up with a Roth IRA:
If you're part of the gig economy and have no 401(k) option, then consider a Roth IRA, a retirement account that can be opened online in a matter of minutes. If you're single, under 50, and make less than $120,000 a year, you can sock away up to $5,500 a year. The beauty of a Roth IRA is your money grows tax-free and can be withdrawn tax-free. There are a number of benefits for Roth IRA enrollees, including for first-time home buyers, which is something you may become even if it seems impossible at the moment. Because down the line, you will have been investing for years, right?
You don't have to wade into the murky bitcoin waters to get into investing online. There are much more basic websites and apps to help you learn and grow as an investor. One to try if you don't trust your ability to pick stocks and bonds at this point, sign up with Betterment, an automatically managed investment account that's user-friendly and charges an annual fee (as opposed to per transaction).
Good luck! And many happy returns.