As millions of Americans struggle under the massive burden of student debt, they desperately reach out to the government for help. Candidates who run on ending income inequality often do well in elections as of late. One of their greatest promises is indeed to end student debt and offer forgiveness to everyone.
Once elected, they seem to take a more cautious approach. Student debt forgiveness just doesn’t seem to happen for anyone, regardless of what side of the aisle they suit up for. They claim they don’t have the money. Then, when something big comes along these politicians really want, they somehow have the money to splurge.
Cue the “Amazon Effect”.
As soon as mega-retail superstar Amazon announced they are expanding, suddenly money freed itself up. Over 250 cities found themselves begging the world’s richest man to make their town a priority. Landmarks were lit up in Amazon colors. Even Andrew Cuomo, governor of New York City, made an interesting offer.
Billions in tax subsidies, along with changing his name to Amazon, if that’s what it took, to bring Amazon home. It’s quite interesting to see this progressive, income-equality seeking mayors acting this desperate. There’s no doubt bringing Amazon to their town would increase the price of rent and everything else in their town.
“This was a company that was going to grow and almost certainly going to expand to these regions,” Stacy Mitchell, co-director of the Institute for Local Self-Reliance, an economic think-tank. “They don’t need a subsidy at all. And it’s ridiculous and shocking that Bill de Blasio, who ran on a platform of fixing economic inequality, worked so hard to bring in a project that’s going to cause a lot of hardship for working-class New Yorkers.”
Helping Those with Student Debt
The prostrating is over, as Amazon chose its two locations. Ron Kim, a New York State Assembly Member, had a great idea. He said he’d be introducing legislation that would take the money offered to Bezos and instead cancel $80 billion in student debt for their citizens.
“Giving Jeff Bezos hundreds of millions of dollars is an immoral waste of taxpayers’ money when it’s more than clear that the money would create more jobs and more economic growth when it is used to relieve student debt,” Kim said in an emailed press release.
“Giving Amazon this type of corporate welfare is no different, if not worse, than Donald Trump giving trillions in corporate tax breaks at the federal level. There’s no correlation between healthy, sustainable job creation and corporate giveaways. If we used this money to cancel distressed student debt instead, there would be immediate positive GDP growth, job creation, and impactful social-economic returns.”
It wasn’t that long ago Amazon found itself in the middle of a controversy. Workers protest they need a living wage. Even Vermont Senator Bernie Sanders was on their case, regularly attacking Bezos for not paying his employees well. It led to a bump in pay, but not by much.
Kim noted that canceling out people’s student debt could add $108 billion PER YEAR to the GDP. Having extra money on their hands, students would reinvest the money into the economy. Studies reveal that people with student debt delay major life decisions simply because they can’t afford it.
A Better Idea
Having millions of young people graduate college with tons of student debt helps no one. It’s forcing people to delay major life decisions. They’re not buying homes, taking out a car loan, or even marrying. They put off having children. This hits the economy hard. They’re making student debt payments and living at home with parents instead.
“I think the case is fairly strong here,” said Mitchell. “Not quite as strong in the case of the mortgage crisis, but it’s pretty close. We have the data to show that when we have lots of young folk entering the workforce underwater, they tend to delay house-buying and family formation and starting their own business and seeking employment that will be more remunerative in the long run because they’re just trying to stay afloat.”
The point remains. If these cities and states can find it in their heart to offer billions to a billionaire, they can help their constituents pay off their student debt. If they do, the job boom and economic progress they’ll make would far surpass the benefits Amazon could bring.