Michael Matteo: Modern economics – supply and ‘I demand’

Op-ed views and opinions expressed are solely those of the author.

Last week, Rep. Alexandria Ocasio-Cortez took to the floor of the U.S. House of Representatives to deliver a speech about the cancellation of debts for college students. She used herself as an example and stated that she owed $17,000. Fellow squad member, Rep. Rashida Tlaib stated that she still owes over $70,000 for loans she took out for a law degree.  Rep. Ayanna Pressley stated, “Student debt cancelation will ensure an equitable economic recovery from COVID-19, jumpstart our economy & close the racial wealth gap,” and went on to tweet “cancel rent, cancel mortgage, cancel student debt.”

Despite the fact that members of the House of Representatives earn $174,000 annually as a member of Congress (more than twice what the average American earns), these representatives believe that taxpayers should pay their debts.

The New York Post has reported that approximately 70 members of Congress are still paying off student loans for themselves or a dependent and their average debt is $37,000, with eight members accruing debts of over $100,000. According to the Federal Reserve, the average member of Congress had a median net worth of around $511,000 in 2020. Congressional members are roughly five times wealthier than the median net worth of an American household of $97,300. Yet, Tlaib and AOC believe taxpayers should pay their debts. Perhaps it’s time to call out and force those who have these kinds of debts to pay them back or prevent them from running for reelection because, if they can’t manage their own debt, how can they make legislation that involves the country’s debts.

AOC received her degree from Boston University (one of the most expensive schools in the country), ironically, in economics. Perhaps she should request a refund from Boston University because her knowledge of economic principles is an embarrassment. In a PBS interview, she made the claim that unemployment was low because everyone in America has 2 jobs, but the facts reveal that fewer than 1 in 20 employed Americans hold a second job.

She was directly responsible for costing Long Island City 25,000 jobs that would have been created by Amazon. While addressing the benefits of a four-day workweek, she mixed up the names of 2 famous economists: John Maynard Keynes and Milton Friedman, and referred to Milton Keynes. The list goes on and on, but the bottom line is that it is obvious that Rep. Ocasio-Cortez, was obviously absent many days from her economics classes.

In her speech last week, AOC stated that 17-year-olds should not be entering into contracts to go to college because they are not qualified to make this kind of decision. This is very odd coming from someone who comes from a party that supports preteens making decisions about gender reassignment or hormone therapy.  You can repay or default on a bad financial decision, but when you alter yourself biologically, there is no return.

Senator Elizabeth Warren has also proposed a student loan forgiveness program. Her plan involved forgiving up to $50,000 of student debt with household incomes less than $250,000. Progressives like AOC and Senator Warren create the idea that their plans would benefit low-income people, but studies have shown that this is not true. One study found that canceling all student loan debt would benefit the top 20% of income earners and these individuals would receive approximately six times more benefit than the bottom 20% of income earners and therefore, it is actually a regressive plan. This finding was supported by findings of the Urban Institute and the Brookings Institution. Perhaps those politicians who attempt to appeal to the emotions of people could do a better job of examining the actual data.

Many progressive politicians believe that college is a right, but these same progressive politicians ignore the basic economic reality that resources are limited. At this writing, the national debt of the United States is rapidly approaching 30 trillion dollars. Most people cannot conceive of what a trillion dollars mean.

According to Imagination Station: “One trillion dollars would stretch nearly from the earth to the sun. It would take a military jet flying at the speed of sound, reeling out a roll of dollar bills behind it, 14 years before it reeled out one trillion dollar bills.” This unconscionable amount of debt is a noose around the necks of present and future generations. The idea that more debt needs to be incurred to pay for what is essentially a choice is economic suicide for a country where many politicians believe that the solution to this issue is simply printing more money. It is this kind of economic philosophy that has led to the highest inflation rate in 40 years.

A factor that no one on the left mentions is the staggering increase of the cost of attending colleges, which are more likely to lean to the left in theory, but in practice are price gouging students with exorbitant tuitions and other fees which have rapidly outpaced the inflation rate over the last several decades. According to the Bureau of Labor Statistics, the price of college tuition in 1977 was approximately $20,000. In 2021, the cost of college tuition was a staggering $305,304.91. That is a 1426.52 percent increase!

It is ironic that the same institutions whose professors fill their students’ heads with dogma about socialism charge fees that far outpace inflation, and expect others to pay for their exorbitant costs.

Finally, there is the issue of taking responsibility for choices. The common ideology of the left is that bad choices are not a person’s fault; they are someone else’s fault and therefore, others should pay for your bad choices. That concept may prevent those with fragile egos from self-deprecation, but it’s a fantasy. If a person goes to a restaurant with limited funds and orders the most expensive item on the menu, but can’t pay for it when the check comes, whose fault is it, the restaurant, the people at the next table, or society in general because everyone has the right to lobster and filet mignon?

Should someone who opts not to attend college and takes a job as a construction worker, carpenter, or other blue-collar job be forced to pay higher taxes to pay for someone to major in gender studies for 6 years?

The data shows that the dropout rate for college students is approximately 33%.  And 57% of college students take more than 6 years to graduate, and 30% of freshmen dropped out of college in 2020. As colleges ignore merit in favor of diversity, which means that unqualified students will go to college, become frustrated because they can’t meet the requirements of colleges courses, and drop out, shouldn’t the students and the colleges bear any responsibility for this situation?

In a utopian world, everyone should have everything they want, but Utopia is a dream. There are realities and facts, and anyone who believes that someone should pay for their debts (especially those legislators who earn more than enough to pay what they owe) are living in an imaginary world, but that’s nothing new because most of what those on the left demand is delusion driven.

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Michael Matteo

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