During his run for the presidency, Barack Obama seemed to have all the answers. He entered office with a mandate and with his party controlling both houses of Congress. In a rather manic fashion, he pushed through significant legislation including the $800 billion Stimulus Package. With great conviction, Obama promised that this Package would significantly increase economic activity and keep unemployment from exceeding 8%. He also promised that significant Stimulus funds would go to “shovel ready” projects, but later admitted that they were not ready. History shows his economic policies to have failed.
Three years into his presidency, Obama is attempting to change the narrative since he cannot run on his economic record. Earlier this week, the President made one of his campaign style speeches in Osawatomie, Kansas. It included Obama’s typical class warfare rhetoric and a call for raising taxes on wealthier Americans. While higher taxes is not only likely, but also necessary to pay down the debt, Obama has no intention of using the revenue for deficit reduction. Instead, he would do what politicians always do with increased taxes; spend more and increase the government’s control over its crony capitalism.
Earlier this week, former Congressman Dick Amery published an op-ed (posted below) that reviewed another flawed policy that Obama promoted in Osawatomie. Obama indicated the desire to use some of the new revenue for “investing” in higher education stating: “We shouldn’t be expecting less of our schools – we should be demanding more. We shouldn’t be making it harder to afford college – we should be a country where everyone has a chance to go and doesn’t rack up $100,000 of debt just because they went.”
Typical of progressives, Obama promotes spending more on higher education when in fact it was previous government interventions (spending) that damaged the system. The cost of a higher education has been one of the fastest-growing expenses in the United States over recent decades. The major cause for this increase has been the government’s support for student loan programs. Schools were able to charge so much more because students were willing to pay for it. Had government not made the student loans so accessible were inexpensive, the market would have forced colleges and universities to temper cost increases. In addition, moving the cost of higher education from the family to government supported loans lowered the pressure on students to be concerned with loan payback. As a result, many college graduates do not have the skills that the employers need.
Obama overemphasizes the importance of higher education and a successful economy. The middle-class of previous decades was mainly created by high-paying manufacturing jobs. As the bubble years developed, the manufacturing jobs was replaced by bankers, paper pushers of all types and government workers. With the popping of the bubble, the market is taking corrective actions and eliminating inefficient or unnecessary jobs. Increased education will not change this reality.
As Amery says in his op-ed; Many of our current devices today were created by men and women with little academic background. Bill Gates, founder of Microsoft, dropped out of Harvard University to start his own software company. The company successfully became one of the leading software providers and Gates ranks consistently among the world’s wealthiest people.” Another good example is the recently deceased Steve Jobs who also dropped that the college. Successful businesses are created by highly motivated and talented individuals. This trait is not taught in colleges and is not created by government spending.
Good Education Is Important, But Not as Vital as a Job
Dick Armey. December 9, 2011
President Barack Obama’s speech in Osawatomie, Kan., called for higher taxes on the rich and an increase of investment – not for businesses – but in national education.
“It starts by making education a national mission – a national mission. Government and businesses, parents and citizens. In this economy, a higher education is the surest route to the middle class. The unemployment rate for Americans with a college degree or more is about half the national average. And their incomes are twice as high as those who don’t have a high school diploma. Which means we shouldn’t be laying off good teachers right now – we should be hiring them.
“We shouldn’t be expecting less of our schools – we should be demanding more. We shouldn’t be making it harder to afford college – we should be a country where everyone has a chance to go and doesn’t rack up $100,000 of debt just because they went.”
This should be a concern for young people who feel obligated to achieve a higher education, but are not finding jobs available. President Obama’s solution for investing in a national education is not going to cut it – we need serious economic reform.
The fact of the matter is that youth unemployment is the highest in the nation of any major demographic – resting at 17.4 percent. It is now expected for young people to achieve a higher education in order to have a chance of gaining a job.
Jobs are not being created. The unemployment rate for the country is around 8.6 percent and the workforce is continuing to shrink. A main reason why young people are struggling to find jobs is because older, unemployed people with more experience are willing to take lesser-paid jobs – the jobs usually taken by the youth.
Thanks to this poor job market, Time magazine reports that 85 percent of last year’s college graduates had to move back in with their parents. Not only are they stuck at home, they’re stuck with no way to pay their massive student loans.
Younger people have been taken by the hand of big government and ushered into high education with government-provided loans at artificially low interest rates. This type of fiscally unsound economic policy is exactly what led to the housing bubble.
Accumulated student debt is over $1 trillion dollars and the average debt held by each student is $26,300. The future for young people is uncertain and rightfully so – to pay off these massive debts, young people need income. With no jobs and student loans left unpaid, young people will be indebted to big government.
President Obama is convinced: Investing in national education will create a well-educated workforce that will magically solve America’s economic woes on its own. This is faulty rhetoric and unprecedented logic – education does not create jobs singlehandedly. Education is important, but entrepreneurship, innovation, and sound free-market policies give businesses more freedom and outlets to create jobs.
For example, the 1920s serve as a decade of excellence that Washington should reflect on. Rather than investing solely in education, big government economic policies were replaced with market-friendly conditions that created jobs and lead to a booming economy.
I want to highlight a key fact about this decade – when free-market policies were implemented, America experienced an incredible inflection of patent grants. Innovators were in abundance and the amount of new product markets skyrocketed. New ideas flourished and jobs followed – the unemployment rate fell from 6.7 percent to 3.2 percent.
Our economy demands innovation, not just education. So President Obama is wrong – education alone certainly is not what makes an economy flourish. Freedom, innovation, and acting-upon ideas are what move the economy and cause it to grow. This is not happening under the current policies.
Many of our current devices today were created by men and women with little academic background. Bill Gates, founder of Microsoft, dropped out of Harvard University to start his own software company. The company successfully became one of the leading software providers and Gates ranks consistently among the world’s wealthiest people.
We face an economy where it is becoming increasingly difficult to be a successful innovator. Young people are being whipped-up in a whirl of confusion and uncertainty – they want answers and they are looking for a leader to provide them. President Obama’s rhetorical claims and failed economic policies are leading young people down an unsustainable road.
Education is a great thing, but right now the education being subsidized by the Obama administration is only leading to endless debt, not employment.