Dan Calabrese

A friend of mine – someone you would definitely peg to the left end of the spectrum – was lamenting the other day that college loan defaults look like the next big financial meltdown. Outstanding student loans now exceed $805 billion, and a disturbingly large percentage of graduates default on the loans, while many others struggle to pay them off, with payment schedules that stretch into their 30s.

So my friend looks at the difficulty college grads have repaying the loans and worries that because of this, they won’t buy homes, won’t buy cars, won’t buy lots of other stuff and won’t have enough money to pay into Social Security. And this, he fears, will hurt the economy because it really needs people to buy stuff.

That got me thinking, and something hit me. Conservatives are always lamenting the size, cost and scope of big government. Liberals rail against big business. But they’re both sort of right. It’s the bigness all around that leads to problems and puts way too much pressure on consumers to spend.

Big government not only supports a massive bureaucracy, but it also pays the medical bills of the poor and the elderly. It needs lots of money. Big business is asked to pay wages, pay taxes and pay the health insurance of all its employees, and that’s before it pays for operational costs like facilities, machinery, raw materials, marketing, etc. It needs lots of money too.

People who get sick need to patronize big health care, and that’s not just the hospitals and the physician groups. It also includes big health insurance, which doesn’t actually take care of anyone, but collects a lot of money from people and then turns around and writes checks on behalf of the some of those people, when it isn’t litigating with the help of big law firms, which need lots of money and depend on big jury settlements, which are paid for by big insurance companies.

Where does the money come from to pay for all this? It comes from you, the consumer. You need to buy the houses, the cars, the electronics all the other stuff so that big construction, big auto, big technology and big retail can pay their big bills.

And in order to be able to afford all this stuff everyone wants you to buy, you have to go get a degree from a big college, which pays big salaries and benefits to tenured professors, in addition to erecting lots of big buildings and big dormitories. The big college needs big money, too!

So you borrow big money from big banks to go to a big college. Once you get your degree, you can get a good job that pays good money. And while you may hear the occasional politician lamenting that we don’t save enough in this country, understand that he doesn’t really mean that. He wants you to spend! That’s the only way all the big institutions with all their big overhead can stay big.

So all these college graduates, who have to make these massive loan payments, are really in a pickle. The reason they went to college in the first place was that everyone needs them to earn lots of money, and spend all of it, so that Big Everything will have enough money. But they went into so much debt to get their degree, that even if they do have a good job, they still don’t have any money.

So here’s the problem: We have a lot of stuff in this country that has gotten really big – some might say too big to fail – and this system desperately relies on consumer spending to stay afloat. That’s why the government pursues policies that make credit super-cheap, even though that only perpetuates the rise of more debt. Because if people don’t have cash to spend, damn it, lend it to them.

Theoretically, you’re being responsible if you live within your means and don’t blow your cash, or run up your credit cards, on stuff you don’t really need. But in practice, Big Everything is desperate for you to live as extravagant a life as you possibly can. Otherwise it can’t afford its overhead.

So just understand: Your job as a patriotic American is to spend (or borrow) big money to get a college degree so you can get a job with a big company, so you can spend (or charge) big money on houses, cars and stuff (oh, and don’t forget insurance premiums and taxes!), so Big Everything can stay that way.

Of course, you could just live a simple life with a few necessities, paying cash for goods and services and saving your money. You know what we call people like that, don’t you? Communists.

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