Remember President Donald Trump’s State of the Union addresses last February and in particular in January 2018 amid a wave of teachers’ strikes? Can you recall the talking points he elaborated on the need to support public education?
Well, that’s because since taking office he’s uttered barely a word about our at-risk public education system or the sharply waning fiscal support for public higher education which has led to skyrocketing tuitions as well as exacerbated a student debt crisis that is deleterious to the economy overall.
The sounds of Trump’s silence on public education are audible to the point of being deafening. Indeed, when in 2018 teachers from West Virginia, Arizona, Kentucky, Oklahoma, and Colorado effectively engaged in mass strikes the likes of which our nation has not witnessed since the 1930s, Trump said not a word to acknowledge or in any way address both the lagging teacher salaries in those states or the woefully low levels of funding for public education which was also a major impetus behind the teachers’ mass actions. This year has witnessed massive teachers’ strikes, already, in Denver, Los Angeles, and Oakland for similar reasons.
Trump’s recent proposed budget for 2020, however, loudly announces his administration’s objective to undermine public education, especially public higher education, calling for a deep and brutal cut of 7.1 billion dollars.
The budget, of course, will not pass, but that is not my point here. The budget nonetheless reveals Trump’s priorities and his overall thinking about what constitutes effective and responsible fiscal behavior, in terms of what we spend and don’t, what we view as investment, and how best to grow the economy.
While there are many avenues of analysis to pursue and conclusions to draw from Trump’s proposed gruesome slashing of the education budget, a salient point worth noting and elaborating is what the budget discloses about Trump’s real goals when it comes to economic development and how Trump thinks about the relationship between educational and economic policy.
In short, what we learn from this budget is that Trump cares little about educating Americans and, perhaps most striking for a President who sells himself as expert on the economy and business, he cares very little about stimulating and growing the economy to improve the lives and opportunities of Americans.
This fact becomes clear when we think about his proposed education cuts in relation to the now infamous Trump tax cuts. In both areas, the effect of his policies is not to stimulate economic growth but to transfer even more wealth to wealthiest among us.
Take the student debt crisis. College debt levels have topped $1.4 trillion and, according to many economists, constitute a major drag on our economy. Think about it: college graduates saddled with debt are reluctant, and frankly unable, to purchase a home, start a family, or create a small business, constraining key sectors that drive economic growth and vitality under capitalism such as the housing market and entrepreneurial development.
According to a study from the Levy Institute, canceling the $1.4 trillion in student debt would spur economic activity to the tune of creating between 1.2 and 1.5 million new jobs in the first few years, creating tax-paying citizens who buy houses, start families, create businesses, and so forth.
Canceling the debt is a matter of reversing the transference of wealth economic policies such as the Trump tax cuts have been orchestrating, beginning most intensely in the Reagan years. As economist Marshall Steinbaum of the Roosevelt Institute has noted, “We shifted the cost of education to individuals and simultaneously required anyone who wanted a job to get a degree and to finance that degree with student debt . . . [All] we’ve managed to do is shift the cost of job training from employers to workers while wages stagnated.”
Yet the cuts to education Trump has proposed only intensify this shift, making it even harder to afford college and repay loans. Here are only a few of the proposed cuts that exemplify this policy:
*The cuts would eliminate Public Service Loan Forgiveness and subsidized student loans, and streamline income-driven repayment programs for student borrowers.
*It would cut the funding of the Federal Work-Study program for students by 55%.
*It would reduce spending on student loans by $207 billion over 10 years as a result of higher loan payments and the elimination of subsidized loans and Public Student Loan Forgiveness. The budget proposal also called for freezing the maximum Pell Grant award and eliminating the Supplemental Education Opportunity Grant, another need-based aid program.
A consequence of such cuts, given that we know college graduates earn substantially more over a lifetime, is that the government would be lose out on the tax revenue it would gain from higher-earning taxpayers.
So much for stimulus. These budget choices depress the economy—and people too.
But we saw the same with his tax cut. Reducing the corporate tax rate from 35 to 21 percent and saving corporations some $13 billion in taxes, supposedly this windfall was to spur economic growth, create more jobs, and induce companies to raise wages. While Treasury Secretary Steve Mnuchin trumpeted that 90 percent of working adults would experience an increase in pay tied directly to the tax cuts, in fact only 4.3 percent of workers in Fortune 500 companies have received either a one-time bonus or an increase in wages. Businesses have reaped nine times more in tax cuts than what they have passed on to workers.
And GM still announced massive layoffs last December. Giving corporations free money does not trickle down or curtail capitalist behavior, as Trump promised his tax cuts would.
So, for our President CEO, we can see that “it’s not the economy, stupid.” For Trump, it’s just mean stupidity.
If he cared about the economy, he would fund—indeed, invest in—education. And Americans would gain a healthy return on that investment.