Tuesday, October 28, 2014

Obama buys votes, sticks taxpayers with tab

Obama buys votes, sticks taxpayers with tab:

The Obama administration’s social engineering mechanics are returning to their favorite playbook with a plan to use yet another well-intentioned but flawed program to buy votes.

This time, the ruse involves student debt. The scheme is a liberal’s dream plan to use taxpayer money or federal funds to underwrite and/or guarantee student loans, then forgive loan debts for people who go to work for government.

Democrats want to use the scheme as bait to recruit yet another special-interest group to their voting tent: college-educated voters with student-loan debt.

Obama campaigning in DetroitHere’s how the weapon works: Obama has expanded the Public Service Loan Forgiveness Program (PSLF) to allow the younger generation, and academics, to attend graduate school for free. The caper will absolve former students of paying their debts after a certain amount of time, if they accept government-approved jobs. The “free” gift will benefit a large number of borrowers, because Obama’s administration “estimates that a quarter of all jobs may qualify,” The Wall Street Journal reported.

Think about what that means. The authors of a September study, “PSLF: Big Benefits, Bad Incentives,” concluded that under this program “it could become common for the government to pay for a student’s entire graduate education via loan forgiveness,” if the students take jobs in government or at certain nonprofits. The study said the new rules “are unlikely to cause many graduate and professional students to fully repay their loans — even if they earn a competitive salary.” For example, “the federal government will finance the entire cost, without limit, including all living expenses” for students pursuing a law degree if they later join the Department of Justice or become ACORN-like community organizers.

Is there any serious question that these people will show their gratitude at the voting booth? Obama should be ethical and call it what it is: a vote-buying scheme that rewards personal financial irresponsibility and failure to honor commitments, paid for by taxpayers. Democrats acquire a big bloc of new voters, and taxpayers foot the bill each April 15. So far this year, future government student loan costs have increased by $20 billion.

Expanded student loans also prompt tuition increases at American universities, because they give professional and graduate students an incentive to borrow more, not less. Such students qualifying for the loan forgiveness program are less concerned about the price of a degree, which means colleges can charge higher tuitions. At the same time, the larger influx of college students increases demand. Any economist worth his salt knows that under the immutable law of supply and demand, more demand creates higher prices and tuition increases.

This destructive scheme discriminates against the private sector. Our government prefers to lend over $1 trillion to students and later forgive debts for those who become regulators, federal prosecutors, government bureaucrats and wealth redistributors. What a huge sea change for a country built on successful entrepreneurship and capitalism. Government is intervening in the functioning of a free society, which means a muck-up is coming. We should all know by now that intervention only gives rise to more interventions, especially when it’s higher education the feds are meddling with, by tossing out what works for some new experiment that tries to cure the mess government has already caused. To date, Obama’s bungled experiment has resulted in nearly $400 billion in defaults on student debt.

Obama’s income-based repayment plans give college students free education and impose higher costs on society following graduation. You can think of this wealth redistribution as a stimulus package for graduate students to come work for the government or for nonprofits anointed by the Obama administration. The left ends up with a growing army of “progressive,” college-educated former borrowers who are paid generous handouts in their new taxpayer-financed careers. Guess who they’ll campaign and vote for the rest of their lives?