With his proposed change in forgiveness rules on student loans, President Obama, revealing his pro-statist biases and anti-business prejudices, is calling for the establishment of clearly unequal treatment.
“Let’s tell another 1 million students that when they graduate,” said Obama in his recent State of the Union address, “they will be required to pay only 10 percent of their income on student loans, and all of their debt will be forgiven after 20 years, and forgiven after 10 years if they choose a career in public service.”
Why the bias against business majors, against entrepreneurial students who choose to go into the private sector and create jobs? “Jobs must be our No. 1 focus in 2010,” said Obama in the same speech, and “the true engine of job creation in this country will always be America’s businesses.”
So why is he calling for students who go into the job-creating private sector to pay back their loans for 20 years while students who end up on government payrolls get to shift the cost of their unpaid college loans onto the backs of the nation’s taxpayers after 10 years?
Given the exploding federal deficits, why encourage students to get a government job where they’ll be consuming more taxes than they pay? Why the corresponding disincentive for students to join the sector that’s “the true engine of job creation,” the sector that cuts the federal deficits by taking people off the tax-eating dependency rolls and turning them into taxpayers?
This proposed special payback break for government workers is surely not based on the notion that public sector workers are less secure in their employment, or work harder, or are paid less than their counterparts in the private sector.
“Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector,” reported Dennis Cauchon recently in USA Today. “The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA Today analysis of federal salary data. The growth in six-figure salaries has pushed the average federal worker’s pay to $71,206, compared with $40,331 in the private sector.”
The double standard in this proposed loan forgiveness policy reveals the same anti-business, pro-government prejudices that both Barack Obama and Michelle Obama openly displayed during the presidential campaign.
“We left corporate America, which is a lot of what we’re asking young people to do,” Mrs. Obama told a group of women in Zanesville, Ohio. “Don’t go into corporate America. You know, become teachers. Work for the community. Be social workers. Be a nurse. Those are the careers that we need, and we’re encouraging young people to do that. But if you make that choice, as we did, to move out of money-making industry into the helping industry, then your salaries respond.”
By “respond,” Mrs. Obama was complaining about lower pays in the public sector, contrary to the facts. Note, too, that she defined the heavily unionized government workforce as the opposite of “money-making,” while describing the private sector as not “helping.”
Who does she think is “helping” to get those good steaks to the White House? Government cowboys?
Barack Obama displayed the same anti-business prejudice in his commencement speech at Wesleyan University in May 2008, advocating public service and telling students that they should not “take your diploma, walk off this stage, and chase only after the big house and the nice suits and all the other things that our money culture says you should buy.”
Instead, these students should walk off the stage and go into the allegedly non-money culture of government where there’s actually more money in the paychecks and where they can nevertheless pretend to be selfless instead of selfish, public “servants,” ethically superior to all that materialism, individualism, and money grubbing in the private sector?
Best of all, the student can walk off the stage, live off our labor, feel exceptionally altruistic, and still end up with “the big house and the nice suits” while looking down his nose at those who actually produce the houses and suits.
The Obama vision? All government, with blinders to the facts.
Ralph R. Reiland is an associate professor of economics at Robert Morris University in Pittsburgh.