Donald Trump gave a very nice speech — for him — last week.
He didn’t really attack anyone. His self-praise was not especially lavish. He focused on some positive numbers, like 2.4 million new jobs since he was elected.
“Over the last year, we have made incredible progress and achieved extraordinary success,” Trump said. Very nice. I would have clapped, if I had been invited. Now, that’s not to say those numbers were very insightful.
Only 1.8 million jobs were created in 2017, which includes most of a month where Trump was not the president. Trump likes to cite the number since he was elected, which adds two more months he clearly had nothing to do with. Either way, 2017 was the slowest year for job growth since 2010, and nowhere near the trajectory for the 25 million jobs he wants over 10 years.
He pointed to “$8 trillion in value” added to the stock market, a few days before the worst single trading day point decline for the Dow in history.
Trump also cited “rising wages” after years of stagnation — but didn’t offer any numbers, possibly because there’s not a lot of evidence for it. Average pay raises still aren’t keeping track with inflation, even in the very low-inflation environment the Federal Reserve has been maintaining for years as the economy recovered.
Meanwhile, he left out some important numbers. Not because they’re inconvenient, I’m sure, but just because he hasn’t shown himself to care about those subjects. Here’s the one most important to me…
That’s the total amount of outstanding student loan debt, owed by some 44 million Americans. Trump didn’t talk any about education in his speech, or about debt. He did talk about tax cuts, apparently convinced they’ll magically solve everybody’s financial problems. They won’t.
If Trump really wants to jump-start the economy, here’s a brand new idea from the Levy Economics Institute of Bard College: Wipe out student loans. Completely. But just once. The experts calculate it would…
- “Boost real GDP by an average of $86 billion to $108 billion per year. Over the 10-year forecast, the policy generates between $861 billion and $1,083 billion in real GDP (2016 dollars).”
- “Reduce the average unemployment rate by 0.22 to 0.36 percentage points over the 10-year forecast.”
- “Peak job creation in the first few years following the elimination of student loan debt adds roughly 1.2 million to 1.5 million new jobs per year.”
- “Research suggests many other positive spillover effects that are not accounted for in these simulations, including increases in small business formation, degree attainment, and household formation, as well as improved access to credit and reduced household vulnerability to business cycle downturns.”
These are effects Trump does care about. He isn’t hitting his own GDP goals, so this could make it happen. He bragged about historically low unemployment and has made job creation a top priority. He supports small business.
Yes, it would increase the deficit — although not nearly as much as many people think. “The impacts on the government’s budget position relative to current levels are an annual increase in the deficit ratio of between 0.29 and 0.37 percentage points,” the study concludes.
But everything Trump and Republicans are doing now is increasing the deficit anyway. It’s obviously not a going concern to them.
The average student loan payment is $203 a month, and 11 percent of Americans are delinquent on them. If Paul Ryan can brag about a public employee taking home an extra $1.50 a week thanks to tax cuts, $6 a month, he should be over the moon about $203. Republicans would suddenly be the party of education.
Trump wants $1.5 trillion for new infrastructure. (Me too.) It’s about what the new tax plan adds to the deficit. So why not for student loan debt? We need to fund the development of our workers at least as much as the development of our roads and bridges. And the only reason student loan debt is so high is because we’ve neglected to do so for just as long.
Article last modified on February 8, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: The Big Number Missing From the State of the Union - AMP.
Article last modified on February 8, 2018. Published by Debt.com, LLC .