Have you noticed how quiet the streets are? Protests, the time-honored way to demand change, have vanished. Strange, since working people and their families are in the economic crosshairs of money-hungry capitalists. Remember the Biden administration patting itself on the back via its cheerleaders in the media for the 5.6% wages have risen in the past year? Unfortunately, that’s only half the story. The half they didn’t broadcast is the rise of the Consumer Price index, a measure of domestic inflation, to 7.9% in February and a stomach-churning 8.5% in March— the fastest annual rate since the Reagan administration, forty years ago. With gas up 38% in 2022 and double digit increases on rent, food, vehicles, furniture and household equipment, U.S. families are paying an extra $300 every month just to cover living expenses. Sure wages grew, a pathetic 5.6, leaving many workers in the richest most powerful country in the world bombarding food pantries and living in their cars or under bridges.
How patriotic do you feel when President Biden announces that American taxpayers are footing a $13.6 billion aid package much of which goes to U.S weapons makers to produce a vast array of killing machines to keep the war in Ukraine humming. The stock of Raytheon, a huge weapons maker, has increased 10% since the war began. Stocks of Lockheed Martin, another weapons biggy, rose 5% in one day. On the same day, Northrop Grumman’s shares increased 7%. Not to be left out of the gold rush, the stock price of Huntington Ingalls Industries, the largest military shipbuilder in the U.S., has seen a steady increase now up over 7%. Don’t for a minute think the weapons makers are the only beneficiaries. As usual their partner in crime, the Pentagon, is in for its share of the goodies. Life in the U.S. is beginning to resemble that of any other garden variety banana republic. Inflation close to double digits. Bare store shelves. American families unable to afford the usual summer vacations, even a night out at the movies. Want to treat the family to a steak dinner? That will cost twenty percent more than it did last year.
Money woes may be keeping you awake, but the hoi polloi in the Pentagon, weapons industry tycoons and wealthy crooks from all facets of American industry and technology are living high on the hog. The government has bent over backwards to shower them with goodies —$8 trillion to the geniuses behind the nine wars the U.S. has started and lost since 9/11 [Cost of War Project at Brown University]. And $12 trillion to the crooks who engineered the financial meltdown in 2007.
The eerie silence on the streets belies the depth of outrage all Americans should feel at this plunder of the public purse. Where are the massive protests that tried to stop the Iraq War in 2003? The government has done its best to keep the American public focused anywhere but on their crummy living conditions. They’ve closed down the economy during the pandemic, broken campaign promises to pass EFCA (Employee Free Choice Act) which would put workers in the driver’s seat in union organizing, instituted mask and vaccine mandates for boarding a bus, train or airplane or entering a grocery store or restaurant. Political leaders have a plethora of excuses for their actions — preserving “our” democracy, keeping us safe, protecting national security (from all the people who want to kill us from the nine wars we’ve started). The same techniques authoritarian governments all over the world use to control the masses.
Granted these barriers to protesting governmental overreach or bad behavior are outrageous but beyond belief are the burden the U.S. places on forty-five million young Americans, students in debt peonage for the crime of pursuing higher education. They owe $1.7 trillion, an average individual debt load of $40,000, almost the price of a mortgage for a starter home. Instead of a future bright with hope and promise, they have to pay $400 per month to keep the bill collector at bay. For an average of twenty years, the blood and sweat of millions of young Americans will be the ticket to untold riches for everyone involved in the student loan heist—banks, private investors, even the federal government. Could it be that the government has found a sure method of stifling dissent? “When you trap people in a system of debt, they can’t afford the time to think.” [Noam Chomsky]
America being America, profit is always part of the package. Let’s take a quick look at how the feds and the corporate bagmen (and women) use student loans to line their pockets. The U.S. government which holds the lion’s share of loans (92%) takes $70.3 billion off the top from their student loan portfolio. With government interest rates at 3.7%, $22.4 billion of that total is interest (profit). It’s bound to get worse. In January, 2023, that interest rate will be reset. As the Federal Reserve raises short term interest rates (they have announced a total of seven rate hikes this year), new student loans may be accompanied by interest rates as high as 7%. Worse still is the betting that after five moratoriums on student loan payments including interest starting in March, 2020, the feds will force borrowers to make good on over two years of suspended loan payments, possibly as early as this September.
Government larceny, hurtful as it is to young people starting their journey to adulthood, doesn’t even come close to matching the greed in the private sector. Like mortgages, student loans get pooled and repackaged into new financial products called student loan asset-back securities (aka SLABS). The lenders then sell the securities to investors. Investors receive the reward of monthly loan payments, plus interest. What makes it even more profitable is that most non-governmental student loans are backed by taxpayers. In the case of defaults guess whose money make these corporate criminals whole? Yours.
In another tip of the hat to the 1%, the government’s loan rates are deliberately kept higher than bank rates. A cynical ploy to encourage students to consolidate their loans into private bank loans, thereby handing banks a windfall of billions of dollars.
The U.S. is a country of loan sharks when it comes to the young. Underlying the whole master plan are two elements: profit and control. The government has a huge stake in both. Since most protests originate among the young, keeping the young in debt slavery keeps them out of the business of protesting governmental misdeeds namely student debt but also environmental degradation and its kissing cousin war. Economic woes equal quiet streets. Student loans have accomplished both goals: curbed dissent and given the gang on Wall Street a huge profit center. Student debt is the worst kind of debt for student debtors and the best kind for government, banks and debt collectors.
It boils down to a single fact of life. A nation of debt slaves and those who profit from it is not the way we like to think of ourselves. But when craven politicians like Obama try to proclaim that it’s not “who we are,” don’t believe it. With the U.S. government eager to hide its dirty secrets from public gaze and the private sector determined to keep the cash registers humming, it’s a safe bet that nothing will ever change.
