As Congress argued and the President kept on redrawing his line across the sand, it was obvious that a cut in the U.S. budget was inevitable, held hostage by the credit ceiling issue, that had nothing to do with future spending. I feared that Federal support for higher education, particularly the Pell grant, would be part of the sacrifice this strategy would extract from the American people.
When the dust settled and the enabling legislation was passed to avert a national default, we learned that the Pell Grant Program will receive $17 billion over two years, allowing the maximum award to remain at $5,500 for next year. I exhaled and began to breath normally.
Currently, about two thirds of the cost of College is borrowed and another 5 percent is covered by grants coming from Pell program funds. Even a small decline in the maximum allowed to be borrowed will take thousands of potential students out of the realm of potentiality and toss them into the grip of unemployment
In the last hours before the August 2 deadline an old economic argument made its way toward the media pundit circle and I heard the familiar two-sides of a classic debate in macroeconomics. Some students of the Great Depression argue that Roosevelt’s budget cuts in 1938 were responsible for a second “dip” of employment and income, which prolonged the Depression. Democratic pundits brought up the argument to caution about the budget cuts and Tea Party Republican pundits argued the opposite, that the government deficit in those days was not large enough to make a difference. I think I first heard those two sides when I was in school.
Tea Party Republican pundits argued further that had it not been for the Second World War, our unemployment would never have returned to normal, in spite of all the efforts of the New Deal. This means, according to them, that wars and not government spending brings about employment. I remember my old mentor pointing out that this is true only if you view the Second World War as a war and not a government spending program, which is all it is when considering its effect on the American economy of the 1940’s.
I was going to suggest that, if Tea Party Republicans prefer, we can end this long lasting recession by having a new war. Have the Pentagon do as it did in 1940, hire one million soldiers, build them a million uniforms and other gear, transport them around the world a million times, and order a million other things to equip them and make it look real. We keep that up for four years and guess what, our economy recovers as it did in 1942.
Instead of attacking anyone, this military force can be sent to study in schools and colleges around the world. Maybe those who are vocationally inclined can be taught the trades and used to restore our infrastructure to world-class levels. Some can be detailed to populate empty classrooms and unstaffed social programs and such other activities. We can still salute them and have parades and flags to rally the morale, it is just that they wouldn’t shoot anyone.