Justin’s note: Elizabeth Warren could cost America trillions of dollars.
Warren is, of course, a Democratic senator from Massachusetts. She’s also running for president.
And like many fellow Democrats, she’s full of wacky ideas. Most recently, she made waves by saying she wants to forgive more than $1 trillion worth of student loans if she becomes president. She also wants to issue reparations to African Americans, which could also cost trillions.
These sorts of ideas used to be considered extreme. A candidate would get laughed out of the race for suggesting them. But those days are over.
A recent poll found that just 27% of Americans oppose Warren’s debt forgiveness plan. As for reparations? Well, fellow Democratic presidential candidates Bernie Sanders and Kamala Harris both support the idea.
Of course, not everyone’s a fan of these ideas. Doug Casey is one of those people. Below, Doug tells me why these ideas are not only ridiculous but destructive. He also tells me why he thinks Warren is part of a much bigger problem.
Justin: Doug, what do you make of Elizabeth Warren’s plan to forgive student loans? Surely, student loans are a major problem.
But I’m not sure this is the best solution. What do you think?
Doug: Well, it makes perverse sense that she’d suggest something like this. After all, a new Democratic presidential candidate enters the race every day now. I think we’re up to 22 candidates now. But who’s counting?
They seem to be competing with each other in an actual freak show. The Evil Party is trotting out its most bizarre nomenklatura, each trying to outdo the other in being socialist, black, queer, transgender friendly, or a professional female. By which I mean a female who parades as a female for a living. They’re vying over who has the most outlandish, rabid and nonsensical ideas about how they’re going to transform the very nature of what’s left of the United States.
Meanwhile, the Stupid Party, the right wing of the Demopublicans, populated by neocons, has-beens, and assorted non-entities, seems mainly interested in hyping the stock market with phony money, and looking for a major war somewhere in the world.
Alexandria Ocasio-Cortez (AOC) kind of set the tone for all this. It amazes me that a 29-year-old Puerto Rican bartender comes from out of nowhere, apparently as a result of an actual casting call, and now everybody in the country takes her ideas seriously.
Perhaps the most stupid of her ideas is Modern Monetary Theory (MMT). This basically amounts to unlimited printing of dollars.
All these other candidates have to call her bet, raise it, and wait for the next player to reraise. They all have some signature goofball idea at this point.
Justin: Or two goofy ideas in the case of Elizabeth Warren.
Doug: Right. Let’s start with the notion of forgiving student debt.
The idea of everybody going to college should be a non-starter. Instead it’s being sold as some kind of human right. In today’s world, it only extends adolescence, in a Petri dish where impressionable kids are indoctrinated by their Marxist-leaning profs. Students incubate in the fetid academic womb for four years. I understand – it can be fun. Drink, party, do drugs, get laid, sleep in, go to the gym. Repeat daily. Don’t worry about the cost, because it’s financed on the Never-Never plan. Sweet.
Some people hang around another eight or even ten years. They become perpetual students and generally don’t learn things that have actual value in the real world. Soft pseudo studies like sociology, political science, psych, gender studies, or English come to mind. I won’t even mention economics, where you not only learn nothing of value from Keynesians, but most likely the opposite of the truth. You don’t have to even think about your loans till you’re out. Then maybe get some kind of government employment to have them forgiven, or further deferred. Great way to waste your life at public expense. With the approval of both your parents and society.
Incidentally, if you’re interested in these subjects, you can learn far more by reading independently, quite frankly. But knowledge isn’t the object with this game. It’s a credential, and credentialism is a fraud. I can’t even find my diploma from Georgetown. I only wish I’d had good counsel in high school. I wouldn’t have misallocated four years of time and a lot of money that way. But today the mistake of college is far, far worse than it was in the ’60s.
There’s much more I can say about education. But there’s absolutely no reason why there should be $1.5 trillion worth of student loans outstanding. It’s not a sign of a well-educated country. It’s evidence of stupidity and corruption.
The fact is that if you’re worth anything, you educate yourself. Sitting in a classroom for six hours a day listening to professors drone on doesn’t constitute an education, especially today when almost all of the professors are cultural Marxists. College doesn’t just present zero value today. It offers negative value.
Having said that, I hasten to make an exception for science, technology, engineering, and math (STEM) degrees. For those subjects, it’s very helpful to learn in a formal structured environment, where labs are available.
The vast majority of people shouldn’t go to college. If I had to do it all over again, I wouldn’t have marched off to college. I would have used that money and time to do something much more productive, interesting, and fun than college.
But getting back to Elizabeth Warren. Forgiving student loans would be disastrous. First of all because it would encourage more kids to go to college.
Second, forgiving loans shields people from the idea that their actions have consequences. These people wanted to go to college to get a piece of vellum. They borrowed money for it. They’ve found it’s of very little value. Now, they want somebody else to pay the consequences. I say, Tough! It’s now time to pay the piper.
But they don’t want to, and are being encouraged not to. That sends an extremely bad moral signal. It’s a further sign of the moral collapse of the U.S., which is an even bigger deal than the coming financial collapse. In fact, you can plan your life around most of these loans being defaulted on during the next stage of The Greater Depression. Since the U.S. Government isn’t going to get the money anyway, it’s clever of Warren to get in front of the situation.
That’s the main issue. But there are other things that make loan forgiveness a disastrous idea. Colleges and universities shouldn’t be expensive in the first place. But they are, due to government intervention into that marketplace. By granting those loans, artificially creating demand.
Justin: I agree that the government sowed the seeds of the student loan crisis. It created the mess we find ourselves in.
So it’s wishful thinking to think the government can fix this problem. If anything, it’ll screw things up even more.
Unfortunately, most people don’t see it like that. They view the government as some sort of cure-all.
Doug: That’s absolutely right. But let’s look down the road a few years. It’s great luck for the current crop of fools to have $1.5 trillion wiped off their liabilities. But what happens to people who go to college in the future? How are they supposed to pay for college? What’s the point of a loan if it’s automatically forgiven?
What will happen is the government – or rather the taxpayers, or the Fed through money-printing – will wind up paying for everybody’s college education.
Then the State has a perfect right to control what’s taught, and how much, to whom. It will further homogenize the nature of the education because it’s considered important that everybody gets the same product. It will be pretty hard to deny someone a four-year vacation, pretty much the way it is for high school today. Increasingly a college degree will just be a sign of time served. Worth even less than it is today.
“Free” college will further politicize education. Politicizing, or “democratizing” in the current idiom, is always a disastrous idea from about a hundred different points of view. But Boobus americanus will go for it because they have this mistaken idea that there’s a direct cause and effect relationship between going to college and being successful in life. In fact, that relationship doesn’t exist.
In my experience, people who go to college and became successful would almost certainly have been successful anyway. It wasn’t college that made them successful. It’s the logical fallacy of post hoc ergo propter hoc – after something, therefore because of it – in action.
The whole system is already terminally corrupt. Free school only makes it worse. People don’t value anything that’s free. In fact, they tend to treat it, and anybody that passes it out to them, with a form of contempt. Why? There has to be some kind of voluntary exchange in any moral relationship. Or a master-slave, conman-mark, patron-client, politico-voter relationship is implied. And the result is resentment.
I don’t know if Warren has got a criminal mentality or whether she’s just criminally stupid, but this is an idea that is almost as bad as AOC’s MMT idea.
Justin: I actually think this idea goes hand in hand with MMT. How else is the government going to pay off everyone’s debts? The way I see it, it’ll have no choice but to fire up the printing press again.
Same goes for reparations, which would reportedly cost trillions of dollars. And that’s just the tip of the iceberg.
But why stop there? Why not forgive credit card debt while they’re at it? Same goes for the people who went deep into debt to buy a car they can’t afford. Those people surely need help, too.
So it’s hard to say where the line is drawn. Maybe there isn’t one.
Doug: You’re absolutely right. It’s a matter of moral principle. Once you cross the line it’s a slippery slope. And what about the people who can’t afford the mortgage on their house? Everybody needs a place to live, so surely the government should kiss that and make it better too.
Eventually, they’ll tie in a guaranteed monthly income. I guess nobody is going to have to work at that point. There’s absolutely no end to any of this. Everyone can just sit around Starbucks all day playing with their iPhones.
It will be fascinating to watch all this play out. I consider it free entertainment, aside from the fact that my taxes are going up as a result of this. But I hope to be at a safe distance when it blows up.
Justin: And what about Warren’s other bright idea: issuing reparations. Are living descendants of slaves or those who have suffered from the ills of racial discrimination entitled to some sort of compensation?
Doug: This is a lot like witnessing a hurricane that’s followed by a string of tornadoes, then a major war, and finally a plague. It’s hard to know which is worse.
In an environment of identity politics, which we now have in the U.S. and across the Western world, you’re no longer an individual human being. You’re a member of an identity group, first and foremost. Those groups are based on religion, gender, or more often than not race.
When you get into reparations based on what happened to somebody’s ancestors, there’s no limit to where you can take this. What’s happening in the Middle East between the Palestinians and the Israelis is a perfect example. Palestinians and Israelis still believe it goes back to who righteously smote who starting about 3,000 years ago.
Everybody’s ancestors stole land from other ancestors, who then stole it back, and who stole it back again and again. Then some outside tribe – the Huns, the Vikings, the Mongols, and a hundred others come along and steal it from both.
This sort of irrational emotion, masquerading as thought, winds up in a perpetual war of all against all. The Identity Politics/Reparation crowd is creating a Hatfields and McCoy environment between racial groups.
Everybody’s ancestors have been conquered by some other group.
The Irish should want reparations from the English. The French should want reparations from the Germans. That worked out really well after World War I, as we know. The Russians should want reparations from the Mongols. The Romans should want reparations from the Goths.
The question is how far back you take this ridiculous fantasy. But ridiculous isn’t even the right word. It’s evil and necessarily destructive.
It’s the idea that somebody else is responsible for any problems that I have. And that somebody else has got to be made to pay for it at gunpoint, because I think my great-grandfather got a raw deal.
This is entirely apart from the fact that the slaves who came over from Africa were actually the lucky ones.
Justin: How were they the lucky ones?
Doug: Slavery has been rampant throughout the entire world since the dawn of history. It’s not just something between Europeans and Africans. In fact, Western Civilization is what abolished slavery starting in about the 18thC. Africa was rife with slavery between Africans, and then with kind and gentle Islamic traders stealing slaves. It was an institution. And oddly the West is blamed for solving it.
The slaves who were shipped from Africa to the U.S. were the lucky ones. Now, slaves didn’t have good conditions anywhere, but an American black slave was far better off than if he had stayed in Africa. Actually, he was enslaved in Africa. He was just subsequently sold to North American buyers.
Anybody who’s been to Africa today realizes that American blacks are an order of magnitude better off than any of their brothers back in the dark continent, or maybe two orders of magnitude. Reparations are a completely ridiculous idea, indefensible historically, economically, and – most important – morally. It’s going to do nothing but foment more race hatred.
One more thing. People don’t realize it, but the United States is the only country in the world – with the exception of ever-disastrous Haiti – where it took a war to abolish slavery. Even though 90% of slaves went to Brazil or the Caribbean, where they were worse off than the English colonies. In Brazil, slavery was abolished peacefully in 1888, 25 years after the U.S. At a time when Brazil was based much more on slavery than the South.
Most people are also unaware of the fact that the last country in the world to officially abolish slavery was Mauritania. It did so in 1981, although in Mauritania, as in many countries in Africa, slavery still exists today. It’s traditional. It’s just not enforced by the law anymore. But it exists just as much as it did before. I spent a week there a couple of years ago.
Types like Warren – er, Pocahontas – who are looking for “reparations,” are ignorant rabble rousers and race hate mongers. Their intention isn’t to improve things, but make things worse in just about every way possible. I mean, yeah, I actually think that – just like AOC – Elizabeth Warren is clearly an evil person with bad intentions. I don’t even give her the benefit of the doubt, by saying that she’s well-intentioned but has made some mistakes. No, to come up with ideas like hers means that you’re purposefully trying to create a disaster; that’s the definition of an evil person.
But she’s just a symptom. The real problem is the degraded state of the U.S. itself.
Justin: Thanks for speaking with me today, Doug.
Doug: You’re welcome.