American Jubilee
American Jubilee
by Larry Harris, Jr.
How many über-educated Americans does it take to solve a spending crisis? A new movement to cancel outstanding student loan debt for Americans earning under $150,000 annually hopes to answer that question. In January Robert Applebaum created the Facebook group “Cancel Student Loan Debt to Stimulate the Economy.” Unlike most Facebook groups, which struggle to amass members, Applebaum’s group now has over 150,000 members and is still growing. Applebaum’s hypothesis is that student loan payments are discouraging eager spenders from stimulating the economy. In this American Jubilee, young people would have their student loans forgiven and be asked to use the extra funds to do what everyone says we need to be out there doing– spending. If there is a snippet from the Bush Era that proves to hold true in any economy, it is that we need the nation to “go shopping.”
Opponents complain about the moral hazard created by implementing student loan debt cancellation as if it is a new or radical idea. However, debt forgiveness is an economic idea that is as old as the Bible. In the Old Testament, during Jubilee, lenders were encouraged to forgive the debt of the region’s poor. This happened, not once but, every fifty years and is the inspiration behind London’s Jubilee Debt Coalition- a movement to cancel the debt of the world’s poorest countries. While we investigate every viable idea to stimulate and save our economy, let us include one of the world’s oldest ideas.
Reuters reports that consumer spending “accounts for over two-thirds of U.S. domestic economic activity” and in 2008 spending “fell at a 4.3 percent annual rate in the fourth quarter, the biggest decline since 1980.” More recent consumer spending and confidence surveys indicate that Americans are gaining confidence in the overall economy. However, anecdotal evidence collected in Applebaum’s Facebook group suggests that young Americans are not fulfilling their spending potential because they are struggling to overcome student loan debt– which amounts to a staggering $544-$675 billion, according to Business Week.
Ultimately, our economy will not be fixed by simply sending the Millennial Generation on a shopping spree. I suggest that we include a “public service commitment” in exchange for debt cancellation. The idea is to activate a generation of citizen superheroes to become economic and social problem-solvers while engaging in “public service”- such as working at a nonprofit, for the federal government, or enlisting in the military. As President Obama launches his national call to service, addresses our various crises, and invests in our future, this American Jubilee would provide the human resources necessary to address our nation’s problems across the entire enterprise.
America needs this contribution from the Millennial Generation. Student loan debt cancellation has the potential to dramatically impact spending and will have a ripple effect across the economy. Business owners, employees and job seekers will see the impact of this program as cash flows to commercial enterprises. A wave of entrepreneurs may emerge from my generation and help build private sector solutions to everyday problems. Young people on the verge of making a home purchase will have the confidence to finalize their plans, helping to buoy our struggling housing market. Finally, the public sector has been clamoring for this type of influx of talent for years. As our government vastly expands the size of Americorps, let’s give them proper resources– the nation’s best-educated 21-40 year olds.
I keep hearing that in every crisis there is an opportunity. Let’s be smart about this opportunity. A one-time cancellation of student loan debt is not only a good economic idea but is also a chance to enlist our most prepared soldiers in an economic war. Our nation’s college graduates want to and can help solve our crises. As a kid I was told that luck is when opportunity meets preparation. We are prepared for this opportunity. Who knows? Maybe we’ll get lucky.
