The rich get richer, and when they get poorer...well, they get bailed out. That's how it seems lately. As Congress prepares to spend a trillion bucks (in addition to the $700 billion bailout from last fall), it makes one wonder when the working middle class will get some love. The pending American Recovery and Reinvestment Act (H.R.1) will no doubt help our economy in some form, but it's not nearly enough and it's not aimed at all demographics. If we can save the suits, why can't we save the common man, right?
Robert Applebaum, an attorney from New York, thinks so and has an idea on how to help many in his shoes -- and trust me, there are many -- while stimulating the economy at the same time. The 35 year old started up an online campaign this month to bail out those "hard-working, educated middle class" suffocating in college loan debt on Facebook. He formed the group "Cancel Student Loan Debt to Stimulate the Economy" because he believes forgiving student loan debt for those making under $150,000 annually would help boost the economy from "the bottom up."
"I struggle to pay my rent and bills and have never defaulted on my student loans," he said Feb. 4. But I also don't spend money on consumer goods anymore -- not only because I can't afford them, but because I'm afraid the situation will only get worse..."
He continued, "One-time tax rebates and meager tax cuts do nothing to stimulate the economy. A recession is as much a psychological phenomenon as anything else. Knowing I'd have an extra $500 per month in my pocket will get me spending again. Multiply that across the country and the economy will start to move again."
Applebaum has been fighting off his own loans since 1998, and owes more now than he did when he graduated. He said he decided to form a group on the social networking powerhouse because he's sick of watching people like him pay the price for choosing to go for higher education and advanced degrees.
"I was watching the news about not only the current economic stimulus package but the second bailout for the financial institutions that's coming down the pike (in addition to the $700 billion TARP bailout). News about lavish vacations, exorbitant bonuses and the redecorating of the Chairman of Merrill Lynch's office absolutely disgusted me," recalled Applebaum, who has seen his group surpass 3,000 in just a few days after he formed it.
"It occurred to me that these guys are responsible for the mess yet they have their hands out asking the taxpayers for billions of dollars [while] continuing to spend money like drunken poets on payday," he added.
Applebaum's not alone in his thought processes. Fellow Facebooker Kevin Bartoy, a 35-year-old archeologist from Old Hickory, TN started up a similar group a few weeks ago because he and his wife have been drowning in student loan debt as well. Applebaum contacted Bartoy, and the two have since banded together, running their respective groups as "sisters." The goal is to gain enough traction it'll grab President Obama's attention. The creation of this petition will surely help.
"This would truly allow the educated lower and middle classes to create a solid foundation for a new economy," Bartoy said. "It is frustrating to be a society in which you need the educational credentials to succeed, but to get them, you have to put yourself in so much debt that you lose your independence in the process."
Applebaum said it'll be hard for Washington to not take this proposal seriously if their movement continues to gain members and online "signatures." At the very least, he said, they have to consider it. "I'm sure there are plenty of Washington staffers in the same boat as me. I'm hoping this will catch the eye of some of them and pass the idea along to the powers that be," he said.
"If nothing else, it warrants a good, hard look and some analysis as to whether it could work... We have an entire class of highly educated poor people. The idea is no crazier than handing over billions if not trillions of additional dollars to the very institutions responsible for the crisis."
What do you think? Is this even possible? Please weigh in.
Follow Jon Chattman on Twitter: www.twitter.com/thecheappop
THANK YOU FOR BRINGING THIS LOOMING CRISIS TO THE PUBLIC ATTENTION.
SOMETHING MUST BE DONE ABOUT BAILING OUT THE ORDINARY, WELL INTENTIONED AMERICN CITIZEN, WHO HAS BECOME A SLAVE TO THESE OVER-INFLATED AND COSTLY EDUCATION LOANS!
We are saddling Americas youth with debt the size of a mortgage before they have an opportunity to get the income they need to pay back the loans.
Want to truly stimulate the economy, forgive all if not a portion of student loans.
Many Americans are very much in debt, yes. Our situation is the result of poor planning and somewhat careless lending (and borrowing!). To get to the root of our problem and guard against a continuous cycle, we need to carefully look at why we are in debt. Sadly, debt has become a standard for living.
I propose re-educating America on this standard.
I can never hope to own a home (to get bailed out of) until I get the monkey of student loans off my back. And my ability to keep a roof over my head is just as impacted - as my monthly paycheck is eaten up in payments and/or garnishments - as those home owners - though I'm stuck with renting.
I have close to - zero - "disposable" income, no hope that the situation will change in the foreseeable future - and a lousy $13 a month or so in a "stimulus" is going to make absolutely no difference.
Debt is debt - and when you are up to your eyeballs in it - whatever the source - you're going "glub glub glub" right down the drain with the home owners. Only no one is throwing you a life preserver.
At least teachers, and some medical personnel, have sometimes got the "option" to pay back student loans through AmeriCorps or similar programs in rural or inner city areas.
Unless education or medicine become the only "acceptable" majors in the US, then I'd suggest that some kind of "work it off" or barter program be extended to the rest of us through the stimulus package.
The President wants us to 'volunteer". How can I afford to? It would be better for me if his plan to rebuild roads and bridges provided me with training to be a paver or steel worker (and damn the MBA) while simultaneously "forgiving" my student loan debt at an hourly rate suitable to a paver or steel worker, which I gather is far superior to that of an MBA in today's world.
I would gladly go pave roads or rivet in the evenings or weekends since my MBA apparently won't even get me a moonlight job at Crate & Barrel or Barnes & Noble to supplement my income and help pay those student loans off. Yes - I've tried. Seems I'm "overqualified" for those jobs. So I'm waiting for the Administration to put its backhoe where its mouth is.
ANYTHING to clean up the student loan mess would be WONDERFUL. ANYTHING to reduce debt would be wonderful.
BTW - I only accidentally got into default while I was transitioning between schools and I have NO other debts of any kind.
I took a risk in going into debt for school, and now I have this never ending burden since there is not a job available to repay the debt.
I also want to make it clear why the debt afflicting this country came about after the country operated with essentially no debt or deficit problems for the first 200 years of its existence.
If you don't want to read the full explanation, heres the short version-- Regressive taxation policies employed in the 1980s in conjunction with a "Wage-Productivity Gap" left the vast majority of Americans with less buying power than they ever had before. Because production capability was beginning to outpace the wage-earner's ability to consume, new debt had to be created. The new debt, created to bridge the wage-productivity gap was a temporary solution to new tax policies and a refusal to adequately compensate wage workers, who until the 1980s, saw their own salaries grow at sustainable levels in proportion to national economic growth.
First, tt was the Regan-Greenspan tax cuts in in the early 80s which greatly reduced the burden on the top 1% of income earners, and and large corporations; necessitating an increase in taxes on small business and the middle/lower class because revenues would fall short otherwise. These ends were administered through increases in the payroll tax and social security tax which are regressive in nature because the less you earn, the larger the percentage of your income is that will be consumed by these taxes.
Second it was the economic and societal impact of these tax cuts, simple economics indicates that when you reduce after-tax income of people who spend every dollar they get on basic daily consumption and living expenses, they will have less money to put into the economy. To counter this reality, the tax-cuts were passed under the assumption that "supply-side economics" would result in a "trickle-down" of the money to the average American, and that the tax-cuts would lead to a great influx of research and development which would lead to productivity gains and innovation that would increase productivity and benefit everyone.
I would love to get behind this cause, but I find it selfish. I think if anyone needs help, it's all of the people who are out of work and owe debt without deferment and forbearance plans. It's all of the people who are way underwater in their mortgages and losing their homes. As for me, I don't mind writing out the check each month to pay for my education, which i know will one day pay off.