Pub. 17 2020 Issue 3

Issue 3 • 2020 11 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S — H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S Several factors distinguish the American economy in the 21st century: massive income and wealth inequal- ity, colossal debt and lack of savings, wage stagnation and lack of worker protections. These were enormous problems before the pandemic and have only been exacerbated in the past 6-8 months. However, Americans were being fed a steady stream of propa- ganda that the economy was incredi- bly vital and only becoming stronger. The reason for this is quite simple. Media narratives, in the mainstream, are crafted by massive corporations who are benefiting from our current economic system, so there is absolutely no incentive on their end to report on any of the structural problems in our economy. Many Americans then take the view of, “Well, I might be strug- gling, but things will get better. Just look at how great the economy is.” Un- wittingly, due to misinformation, many Americans are unable to identify some of the structural problems inherent in our economic system and thus chalk up certain economic struggles solely to per- sonal failings instead of deeper systemic issues. Obviously, we all have a degree of culpability in our own struggles, but there can also be systemic issues at play that should be acknowledged. The most frustrating aspect of America’s current economic plight is that, with our vast wealth and resourc- es, we are capable of putting together a forward-thinking, vibrant economy that could be the gold standard. But we currently lack the will both in Congress and within the general population to fight for changes that are necessary and wildly overdue. An issue that is unique to America in both its scope and depth is student loan debt, which keeps many younger citizens from participating in the economy. According to a CNBC article, less than 11% of federal stu- dent loan debt borrowers are repaying their loans during the pandemic. A temporary coronavirus forbearance on student loans has allowed many debt-holders to experience a temporary respite from the burden. According to the article, “Student loans have long outpaced credit card and auto debt as a burden to Americans and each year 70% of college graduates start their lives in the red. The average balance is around $30,000, up from $10,000 in the early 1990s, but many borrowers Mark Anderson, Legal and Legislative Assistant, NewMexico Bankers Association owe $100,000 or more. The typical monthly payment is $400.” In recent years, student debt has bal- looned and wages have remained stag- nant, furthering its holders’ burden. Many young Americans have report- ed feeling far more positive without having the responsibility of continually paying off debt. The larger point is that having millions of young Americans burdened with tens of thousands of dollars in debt isn’t good for anyone in an already unstable economy. Having young people, who should be enter- ing and participating in the economy, completely unable to participate in the economy degrades a country not only economically but socially. When young people have less of an econom- ic stake in their country, there is less incentive to have positive community interactions. Depression, suicide rates and crime go up, public health and the sense of community drops significant - ly. There isn’t anything positive that arises with saddling millions of people with burdensome debt. Aside from the obvious negative effects it has on the individuals who carry it, it has wildly negative effects on society. What has become increasingly clear, particularly when viewing an issue as acutely destructive as student loan debt, is that the American people need a break. They need policies that will give them relief, both from an economic and psychological standpoint. For far too long, the boot of corporations and billionaires have been on the neck of the American people, piping out propagan- da and convincing millions that positive change isn’t possible. While this pan- demic has been brutal in many ways, it has also revealed what works and what doesn’t. In viewing how effective the initial stimulus payments were in keeping people out of poverty, it shows how potentially useful a Universal Basic Income (UBI) could be. A Universal Ba- sic Income could essentially be labeled Social Security for All, a periodic pay- ment delivered to all citizens without a means test or work requirement. Proponents of UBI argue that it would provide a safety net for citi- zens, thus reducing homelessness, crime and providing some debt relief. The argument against a UBI is that it disincentivizes citizens to work and costs too much. This notion that a UBI disincentivizes people to work as- sumes that $1,000 a month is enough to get by on and that people are inher- ently lazy, both viewpoints I vehe- mently disagree with. Americans have proven they want to work, but why would anyone want to work a full-time job without making enough money to get by? The potential benefits of what a UBI could provide far outweigh its potential downfalls. As far as the potential cost, no one brings up cost when discussing tax cuts for billion- aires, bloated military budgets, or trillions of dollars to prop up the stock market. We have the money, so why is it that cost only becomes a concern to our politicians when it’s a policy that would help regular people? It’s funny how that works. Any discussion of how obscenely out-of-whack the American economy is no longer hypothetical. Without any significant policy intervention, what is going to happen to the mil- lions of Americans entering poverty? Many people have been destroyed economically during the pandemic through no fault of their own, so if the government isn’t there to help those people, what is it there for? Why is there a federal government if it absolutely refuses to help the people? The policy solutions are out there, but we must create the will and collec- tive movement to implement them. These policies include a Universal Basic Income, Medicare for All, and a student debt jubilee or partial relief. These policies, which have been called radical in the past, can now be labeled “common sense.” We are entering economic conditions that can easily be mistaken for a depression, so what was once thought to be radical may be the only thing that can fix our current predicament. If you’re counting on the wealthy and powerful to bail out or help the American people, you will be waiting for a very long time. n