Columnist Jesse Jackson
Washington is built on top of swamps, and its politics are often simply an accurate reflection of its environment.
On the stimulus package, the so called “moderates” proved once more that in Washington, moderation is not synonymous with common sense. Led by Democratic Sen. Ben Nelson and Republican Sen. Susan Collins, they proclaimed that they would cut the pork out of the bill, leaving only the stuff that worked to create or sustain jobs.
So what did they cut? The biggest cuts came from money for education (to retain teachers and keep schools running) and for construction of schools.
Hello? School construction would hire the very workers that are out of work to do work we desperately need on projects that are ready to go.
The revised banking bailout will once more feature spending hundreds of billions trying to save the big banks and get them lending again. Already they’ve received literally trillions in direct cash infusion and in guarantees. Furthermore, banks are paying essentially zero percent interest rates on money they borrow from the Federal Reserve. Yet they still aren’t loaning much out.
Why, if banks can get money at zero percent interest rates, can’t students burdened with student loans get the same deal? The long-term success of our economy and our democracy depends on the young getting better and better education.
Yet college is being priced out of the reach of more and more students. Tuitions are up – 40 percent over the course of the Bush years. Grants are down. In 1975, the government Pell grant paid 84 percent of the costs; now it covers only one-third.
An estimated 400,000 kids a year are priced out of college. And students who stay in go deeper and deeper into debt. Students now graduate from college with an average debt of around $20,000, more than double what it was a decade ago.
They have to start paying off that loan upon graduation. But what if they can’t get a job in this economy? If they default, it not only destroys their credit rating, it hurts the university. Schools can get cut off if the default rate grows too high.
We can get a car with no financing costs for the first year, since the banks can lend money so cheaply. So why not a student loan with zero percent interest, or at least no interest costs for the first five years, like an auto loan?
Apply this retroactively to those that have graduated, and it would have a clear stimulus effect. They’d spend virtually every dollar of the interest saved. And more students would stay in college – which would be good for them, and good for the economy.