What Else Does Mike McFadden Know Nothing About? Student Debt.

Mike McFadden

Mike McFadden

Today on WCCO Chad Hartman asked Mike McFadden about student loan debt.  Good question from Hartman.  We don’t hear enough about this national problem and its effects on the economy.  A great question for a political candidate to tackle as well.  Unfortunately, McFadden wasn’t up to the task.  In a long, rambling non-answer, McFadden demonstrated that he has no meaningful solution.

What was McFadden’s solution?  Better jobs and a lower federal deficit, of course;  knee-jerk precursors to a familiar GOP talking points.  Reduce the federal deficit and free up job creators and the problem, regardless of what it is, will be solved.

Let’s start with the federal deficit.

Ignore for the moment the fact that a lower deficit isn’t necessarily a cure for our economy.  That concept is too complicated for the narrow right to grasp.  Right or wrong, the idea of reducing the deficit while reducing the burden of student debt sound like good ideas.  Right?  The problem here is how McFadden seems to frame the deficit-based solution.  He was asked about student debt and he said we have to reduce the deficit.  Therefore the two are tied together in McFadden’s solution.  Reduce the deficit and then we’ll talk student debt.

It is fair to draw that conclusion, right?  Or what does one have to do with the other?  He certainly would not say let’s reduce student debt so greater economic growth can help reduce our deficit, would he?  No, most certainly not (McFadden is a Republican), although that is a legitimate argument.

It is important to note that when measured in terms of GDP, the deficit today is less than half of what it was in 2008.  Nonetheless Republicans consistently block efforts to restructure student loan debt.  Therefore McFadden’s solution — if he is serious — is out of step with the established GOP, which would be refreshing if true.  It is hard to see even a moderate Republican tackling debt relief if we were to somehow reduce our deficit.

Student Loan Debt BubbleFirst off, what is “reduce”?  McFadden wouldn’t know.  And what cost — yes, cost — would be needed to “reduce” the deficit.  The cure might be worst than the disease.  And these quid pro quo solutions at best delay the solution.  Usually, if the promised solutions is delivered at all, it is compromised.  Decades of cuts have done little to alleviate the problems of the middle class.

In the end, student loan debt has nothing to do with the federal deficit.  Tying the two together as a “solution” is ridiculous.  However chances are good that McFadden doesn’t fully understand this.  Thus far he has given us no reason to think he is strong on policy.

Let’s move on to the other part of McFadden’s answer that evaded the student loan debt question.  That answer was better jobs.  Of course!  For Republican, there is no problem that cannot be fixed by jobs.

Students want better jobs, McFadden argues.  Ok, fine.  Who doesn’t?  He reminds us that wages are flat and, yes, this is true.  (It would be refreshing if a Republican took this seriously.)  One presumes, therefore, that McFadden thinks students leaving college should be finding more higher paying jobs.  Or maybe graduates should just get paid more.  It’s unclear.  And it is unclear how the jobs-loan nexus exists in McFadden’s mind.

Maybe he tackles the problem from the cost side.  College is more expensive and that leads to students taking out more loans.  Therefore the solution is higher paying jobs so they can pay off those loans.

student-loan-Finance-FoxMcFadden complains that the cost of education is increasing, but that sounded more like an attack on higher education than a statement of fact.  Nonetheless it is true that the costs of higher education continue to increase, but a good part of that cost is directly due to cuts to aid to higher education.  Higher education has never been cheap.  Until recently it has largely been a non-profit pursuit with high opportunity costs and risks.  The economics of public higher education were supported by substantial public support.  We invested in higher education because the benefits contributed to a stronger, more dynamic and innovated society and economy.  In recent decades, however, we have chosen to invest less and less.  That adds to student costs.

But if better jobs are the answer the rising costs of higher education, however that might happen, it begs the question:  How would Mike McFadden generate those better jobs?

McFadden says he knows how to create jobs.  Maybe he does at the corporate level.  I don’t know.  But the nation is not a corporation and the two have different priorities and finances.  If there is one strong argument against business credentials being sufficient for public office, that’s it.  Government is not business.

For example McFadden’s says students and parents need to know the value of education before getting started.   Specifically schools need to tell them what the education will cost and what kind of job market graduates will find when they finish school.  That’s fine, but what someone does when he or she is 25 often is world’s apart from what that person is doing when he or she is 50.  Careers develop long after a student leaves school.

In any case, all of these “answers” evade the direct question:  What would you do about student loan debt?  McFadden acknowledged that student loan debt tops $1.2 trillion in the United States now.  None of his “solutions” address this.  The problem is just one for current students, it is one for former students of all ages.  An increasing percentage of student loan debt is held by Americans in their retirement years.  It is a huge problem with enormous implications for our economy today and in the future.  It is a national burden as much as it is a personal one.  McFadden fails to address this problem directly and it is not clear how is so-called solution will correct it.

Republicans have had decades to address the problems of rising education costs and the loans that trended with those costs, but Republicans did nothing.  It is true, both Democrats and Republicans eased requirements for loans and increased loan limits.  In some situations Democrats joined Republicans is cutting public funding for higher education.  However in recent history, Republicans stand adamant about a dangerous mix of funding cuts and blocking loan forbearance and reform.

Mike McFadden gave us no reason to think he would be any different.  He had a chance to answer this question and he dodged it.


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