Home » 2016 » July

Monthly Archives: July 2016

Solving Youth Unemployment and High Student Debt in America

by John Brian Shannon | July 29, 2016

THREE WAYS to PERMANENTLY solve high youth unemployment, low wages for young workers and interns, and high student debt loads faced by youth in the United States.

1) Institute a student military draft.

It’s not like we’re going to war, or that we’re likely to start a new war, anytime soon.

Each young person should be required to serve one year (their gap year) either as a cadet (between junior high school and senior high school) or at a slightly older age (between senior high and college) or even older (between college and first year university) and be free to choose when they serve their compulsory military service — as long as they complete their service by age 25.

Maybe the U.S. Army Corps of Engineers could partner-up with Habitat for Humanity to get some hands-on experience and see realworld problems and solutions, firsthand.

With significant numbers of students fulfilling their ‘gap year’ responsibilities to the military, it leaves that many fewer students to compete for the same jobs or internships.

Which will obviously drive up demand among their typical employers, and thereby drive up their wages — thereby making demand for their employment comparable to the demand experienced by their parent’s generation.

Not only would these kids learn valuable skills, they would form lifelong friendships and have the opportunity to meet other kids from all parts of the country and from all walks of life.

And a real shot at a quality job with decent pay once they complete their schooling.

Problem #1 solved.

2) Serve one year compulsory military service in good order and gain one free college degree!

We’ve seen that kids with lower levels of education tend to remain their entire lives with that same low level of education. (They will always work at a blue collar job) And never have a real opportunity to move into a higher economic quintile.

But we’ve also seen hundreds of thousands of kids with college degrees working at menial jobs — and happy to have ANY job.

I ‘solved’ the problem of too much competition in the student and post-student job market in my point #1 above, so what is left but to ensure that each student has the opportunity to gain a one-college-degree-education, to have a real shot at moving up by (at least) one economic quintile.

How to pay for that?

When a young person serves in the military for their one-compulsory-year military service, that should entitle them to one, no-cost college degree.

It’s so simple!

Serve one year compulsory military service in good order and gain a free college degree!

And once you’ve completed that; Once you enter the job market, not only will you have more marketable skills and experience, you’ll notice a wide-open job market as other students will be away serving *their* compulsory yearlong military service.

3) For today’s students and post-graduate students overburdened by student debt, they should likewise be invited to serve one year in the military to ‘work off’ some portion of their existing student debt via their one-year-compulsory military service. Let’s say to a maximum of $36,000.

For some students, this may only represent half of their total student loan debt, but for as long as they remain unemployed that debt isn’t getting paid anyway. If they want to drop their total student loan debt by $36,000. all they would need to do is apply under the student draft provision.

Of course, the military may not need all those people. But there is crumbling infrastructure all over America that needs low-cost labour to bring it back up to standard. And there is plenty of planned infrastructure that needs building and low cost labour, just waiting to be built.

What could be cheaper than hiring the Army Corps of Engineers — partially staffed with student labour?

To solve housing shortages for the bottom quintile in America, what is better than thousands, or tens of thousands of young, bright, energetic students seconded from the US military to build those housing units?

Not that the students will earn a wage while working in the military, but they won’t have to pay rent for one year — as the military will house them. Nor will they have to pay for food or clothing — as the military pays for all of that. Nor will they have to pay for medical or dental or injury issues — as the military routinely pays for all of that and more. In short, the student cadets will have zero expenses and will be fed, housed, clothed, and have their medical needs taken care of.

How to pay for all of this?

Well, it’s cheaper than you could imagine.

There wouldn’t be any labour costs for student labour. And corporations and various levels of governments could help to defray some of the costs via sponsorship of some infrastructure programmes.

However, the military may require a minor increase of 5% in their annual budget.

It would be worth double or triple that, in order to solve many of the social problems of the student cohort and post-student cohort.

During their military service, the military would be 100% financially responsible for these people, but via all of the cost savings from national and state infrastructure spending (no labour cost for student workers!) and other projects where the military can direct student workers, the students will more-than pay their way.

Not only that, but some corporations may want to sponsor work-teams to beautify certain parts of their city or at their corporate headquarters via tree-planting programmes, or whatever.

Free labour for federal, state, and city infrastructure projects, lower youth unemployment levels, student and post-graduate debt-lowering or debt elimination, and higher wages for newly in-demand interns and students. What’s not to like?

A few countries already have partial versions of this sort of programme so it’s not like it couldn’t be done.

Read: It Couldn’t be Done by Albert A. Guest

Related Article:

It Couldn’t Be Done

by Edgar Albert Guest

Somebody said that it couldn’t be done
But he with a chuckle replied
That “maybe it couldn’t,” but he would be one
Who wouldn’t say so till he’d tried.
So he buckled right in with the trace of a grin
On his face. If he worried he hid it.
He started to sing as he tackled the thing
That couldn’t be done, and he did it!

Somebody scoffed: “Oh, you’ll never do that;
At least no one ever has done it;”
But he took off his coat and he took off his hat
And the first thing we knew he’d begun it.
With a lift of his chin and a bit of a grin,
Without any doubting or quiddit,
He started to sing as he tackled the thing
That couldn’t be done, and he did it.

There are thousands to tell you it cannot be done,
There are thousands to prophesy failure,
There are thousands to point out to you one by one,
The dangers that wait to assail you.
But just buckle in with a bit of a grin,
Just take off your coat and go to it;
Just start in to sing as you tackle the thing
That “cannot be done,” and you’ll do it.

President Dwight D. (Ike) Eisenhower

Ike Eisenhower was the last Republican president to balance the federal budget. He paid down the national debt. He spent money to create jobs. Eisenhower’s Interstate Highway system (begun and completed on-time and on-budget during his first term) returned more than $6 in economic activity for each $1 it cost. He did not lower taxes, cut spending, kill jobs, or increase the national debt. President Ike Eisenhower was America’s last fiscal conservative!

The Case for a New US Economic Deal

by John Brian Shannon | July 23, 2016

A New Economic Deal for the United States

It is high time for a new branch of economics to emerge, one that focuses on and works for the largest number of end-users in the economy. (Other words for end-user are; citizen, voter, consumer, worker, contributor, mentor)

Q: How to make a country strong?

A: Empower every contributor to that nation’s success.

That’s how to get the economy firing on all cylinders.

How do I know this? Look back through America’s history, and note the times of positive growth (not only economic, but knowledge and social growth) and see how well it worked then…

The stock market crash of 1929 was merely an aberration due to simple regulatory deficiencies and since then it has loomed too large in the minds of economists, politicians, and the public.

There was nothing wrong with the socio-economic model then that a bit of regulatory adjustment couldn’t have prevented.

In the FDR years, the socio-economic model was improved because President Franklin Delano Roosevelt fixed only the parts that were broken on an almost perfect socio-economic wheel.

FDR gave us ‘the New Deal’ which in essence repaired the social contract between the government on the one hand, and contributors to the economy on the other hand.

In our time, we need ‘a deal that puts citizen economics first’ which I would characterize as ‘Humanist Econometrics’ or the ‘Fair Deal’.

Globalization for globalization’s sake, and the ‘trickle-up’ economy are presently working to strip wealth from the bottom 4 quintiles and move it to the top quintile which will result in a completely broken economy.

At present rates of ‘progress’ by 2030 some 75% of the world’s wealth will be concentrated in the hands of the 1%. (You call that progress?)

Which is why we need Humanist Econometrics to take over and make adjustments to the economic model. Running the world economy for the benefit of the 1% who play in the derivatives market and (rentiers) in the Chinese real estate bubble market, will result in a socio-economic collapse of unprecedented proportions.

In reality 2030 is only 10 fiscal years away. This year is already done, next year is already spoken for. By the time legislation gets written and passed we’ll be at fiscal year 2018 and those changes will hit the street in 2019.

Hey! Is anybody listening? We need to act now!

We need to change the tax structure so that those reporting less than $25,000 per year on their income tax forms don’t pay any tax, consequently we will save billions on social services expenditures including SNAP, welfare payments to millions of part time minimum wage workers, and other costs.

We need to focus on increasing money velocity among the bottom 3 economic quintiles.

“The function of credit in a simple society is, in fact, remarkably egalitarian. It allows the man with energy and no money to participate in the economy more or less on a par with the man who has capital of his own. And the more casual the conditions under which credit is granted and hence the more impecunious those accommodated, the more egalitarian credit is.” — Money: Whence it came where it went — by John Kenneth Galbraith

We need to ensure FDIC is operating perfectly AND we need to lower the threshold at which banks can lend out money to zero. Yes, banks should be allowed to lend out 100% of their funds without holding statutory reserves.

See Per Kurowski’s excellent blogs and videos on this and related topics.

Doing so would correct the present regulatory imbalance in every bank’s loan portfolio, redirecting them to more lending and more diversified lending, and each bank would be able to determine their best mix of loans on a monthly basis.

However, those who purchase on the stock market should be required via SCC regulation to own a minimum of 25% of their purchase (cash, or letter of credit) to reduce the chances of another stock market crash similar to 1929, due to over-leveraging.

(Yes, there would be a lot of complaining for a month then it would be over. On balance, we would never risk another 1929-style crash)

And we must (obviously) work on the tax structure, repealing the President Ronald Reagan and President George W. Bush tax cuts which created the 1% in the first place — but which were the right policies at the time.

But continuing to make the 1% richer and richer by sucking all of the wealth in America upwards, will result in one inescapable conclusion — irrevocably ruining the economy for all, the 1% included.

The time for talk is over. We need to act now. Remember, 2030, the year that 75% of the world’s wealth will be owned by only 1% of the population, is only 10 fiscal years away.

And we see how slowly the system changes…

President Dwight D. (Ike) Eisenhower

Ike Eisenhower was the last Republican president to balance the federal budget. He paid down the national debt. He spent money to create jobs. Eisenhower’s Interstate Highway system (begun and completed on-time and on-budget during his first term) returned more than $6 in economic activity for each $1 it cost. He did not lower taxes, cut spending, kill jobs, or increase the national debt. President Ike Eisenhower was America’s last fiscal conservative!