Poker Face
There is a fantastic scene in the movie Lock, Stock and Two Smoking Barrels where Eddy is offered a loan by Hatchet Harry. If you haven’t seen it or need a reminder, here’s the link.
There are so many great lines in this scene, my favourite of which is “we’ll take you to the cleaners” by the gravel-voiced Barry the Baptist (Lenny McLean). However what I am always left with at the end - reinforced by the clever camera work - is a sickening feeling when realising just how indebted the protagonist just became to the psychopathic Harry.
I have never watched this scene and been left with the idea that the debt should be cancelled because either party didn’t understand the arrangement, I always feel that Eddy is an idiot for having agreed to something so stupid in the first place.
And so, with all this in mind, let’s move on to the US Governments plan to cancel student debt.
Free Money
If you missed the announcement, President Biden announced that students will be granted $10,000 student loan forgiveness, something that could potentially cost the American economy (ie the taxpayer) a further $220 billion. This is $220 billion on top of the ongoing payments to Ukraine and the recent ‘Inflation Reduction Act’ ($740 billion). All of this adds to the US debt, which has nearly doubled in the last ten years from an eye watering $16 trillion in 2012 to a frankly ball crushing $30 trillion this year.
Since the numbers are so large they baffle the mind, lets instead think about how we have come to this position.
Let Them Eat Cake
Let’s say that you decided as a school leaver that you were really interested in being a baker. In an ideal world (without an overbearing Government) you would simply start making cakes, see if anyone would buy them, wait for the market to tell you if you were doing a good job and then succeed or fail. Either you make cakes that people want to buy, invest in improving and growing and become a successful and rich master baker with a spangly hat, or your Gateaux’s look like a German Shepherd shat on a Victoria sponge and you go and find another job.
Now though, Government arrives. After all, they can’t have unlicensed and untrained baker’s roaming around, that would be chaos. Government tells you that in order to meet the standards it requires from its bakers, you must take a course. This course will last 3 years and will cost $100,000. At the end of the course, you will be trained to a Government specified level of bakery, and will be able to make a fine bakers wage.
The problem is, that though you are loose-limbed, young and bright-eyed, you don’t have $100,000. At this point, with a devilish twinkle in its eye the Government explains in a Hatchet Harry accent, that it’s happy to loan you the money.
Fast-forward five years and you’re selling sausage rolls with Ukraine flags on them from the back of a van parked at the M62 services just outside Warrington on a rainy Thursday and you’re $150,000 in debt. Living the dream.
How did this happen?
The Government see’s an industry.
The Government regulates that industry.
The Government requires a license/training for that industry.
The Government offers a course to get that license/training.
The Government offers a loan for you to pay for that course.
All that has been achieved in this process, is the removal of all the creativity inherent in new people joining an industry, crushed under ‘standardisations’ boring beige boot, and that a young person is ruined by extraordinary debt.
At this point you may be thinking that I agree that loans should be cancelled but that’s not the case at all.
Mad Skillz
What we seem to have forgotten, is that there is a thing called talent and as much as the Government would disagree, I’m afraid there’s no substitute for it. It doesn’t matter how many years of training, dollars of debt accumulated or frat parties vomited at, you simply cannot train a goldfish to fly a plane.
Telling young people that they can be a baker (for example) simply by going to college and learning to be one, is setting them up for failure. You should be interested in baking, have it as a hobby, making cakes in your own time to test your skills, you should live it, you should also be actually talented at it. These are the people who should be going to college and getting into debt (if necessary), the ones who are going to contextualise the beige ‘Order’ forced on them and make it through until the end with their passion intact.
Telling people that they can learn to be a baker ‘so that they can earn a good wage’ is entirely the wrong message. You should learn to be a baker so that you can enjoy your work, feel fulfilled and express your talent. Getting a good wage should be an expression of the value of your skills, the result not the aim.
Instead we have people investing $100,000 into learning skills that are either entirely worthless, or that they are not interested in. Five years after the loan is secured they find themselves either earning too little to be able to afford to repay the debt, or not working in their chosen field because they aren’t talented enough to make it or because they found it boring.
In my recent discussions on Twitter, I’ve had only a few standard validations from those who believe that student debt should be cancelled, here’s how I can summarise them.
1/ “With my job and low wages, I can’t possibly afford to pay the debt back. I need higher wages.”
2/ “The loan wasn’t explained to me at the start, I didn’t understand.”
3/ “Some people go to college to just learn interesting things, it’s not about getting more money from that knowledge.”
You can translate these reasons as follows;
1/ Things didn’t work out as I expected or as was promised.
2/ I didn’t look before I leapt.
3/ I didn’t know what to do, so I just paid $100,000 for someone to tell me what to do.
Dirty Hands
While all this is going on, those who did not go to college and have been earning a wage are now going to be forced to pay the debt of those who did. This despite the fact that most of the people who did the training aren’t using it, were just doing it to fill time or did it, used it and then found out it wasn’t worth the money.
Meanwhile both the untrained, trained and now the unborn pay for the teachers, facilities, debt interest and infrastructure via taxes and future debt.
We don’t need everyone to get a college education, we need people to follow their passions, use their innate skills and do a job they enjoy. We need to remember that the only way to have people working in hospitals is if someone is able to physically build the hospital, or to tile the kitchen, or to install the toilets. We need to remember the importance of trades. The only people who need everyone to go to college is the overbearing, over-regulating Government that wants to convince you that you can only succeed by ticking boxes and being instructed by their own bureaucrats. We are literally spending future money on destroying creativity, stifling invention and destroying the productive parts of the economy to pay for the unproductive.
With the West in trillions worth of debt already, Barry the Baptist is correct. They’ve taken us to the cleaners.
Thanks for reading
~Z
Excellent article 👍