Sen. Elizabeth Warren on Monday proposed eliminating the student loan debts of tens of millions of Americans and making all public colleges tuition-free, staking out an ambitious stance on one of the central policy debates of the 2020 Democratic primary.
Student debt and college affordability have become a key dividing line in the Democratic race, between more progressive candidates who favor sweeping new tuition and student-loan benefits and others who support more incremental adjustments to the way Americans pay for education.
Warren’s new plan would forgive $50,000 in student loans for Americans in households earning less than $100,000 a year. According to analysis provided by her campaign, that would provide immediate relief to more than 95% of the 45 million Americans with student debt. The Massachusetts Democrat and 2020 contender is also calling for a drastic increase in federal spending on higher education that would make tuition and fees free for all students at two- and four-year public colleges and expand grants for lower-income and minority students to cover costs like housing, food, books and child care.
The campaign estimates that the plan would cost $1.25 trillion over 10 years.
But how can “we” possibly afford this???
The revenue from Warren’s wealth tax proposal — a 2% tax on wealth above $50 million and a 3% tax on wealth above $1 billion — would pay for her newest proposal, her campaign said. According to details shared by her campaign, the massive debt cancellation and free college plan additionally asks states to chip in to cover the cost of tuition and fees. Warren has also said her universal child care proposal would be paid for by her wealth tax.
Asked about connecting the viability of her new proposal to another, Warren insisted that there is broad support for the idea of taxing the ultra-rich.
“For two cents on the dollar, we could pay for universal child care, universal pre-K, universal college and knock back the student loan debt burden for about 43 million Americans and still have nearly, just short, of $1 trillion leftover,” Warren said in an interview with CNN. “It tells you how badly out of whack our economy is right now.”
A couple of notes:
(1) Warren’s various proposals would, if enacted, would merely transform the United States into a typical developed nation in regard to these issues, as opposed to maintaining what is, comparatively speaking, an extraordinarily reactionary status quo.
These proposals are not magic bullets: they’re merely necessary, but far from sufficient, first steps for dealing with radical levels of economic and social inequality. That they’re considered radical simply underlines how reactionary the political status quo in America has become.
(2) This is a more general point, but our cultural consciousness in regard to how much wealth is generated by contemporary developed economies lags far behind historical reality. U.S. per capita GDP tripled between 1840 and 1900, tripled again between 1900 and 1960, and tripled yet again since 1960.
This mind-boggling increase in wealth over an eye-blink of human history (John Tyler became president in 1841, and he has living grandchildren!) still hasn’t been assimilated into our collective social and political psychology. As Warren’s proposal reveals, “luxuries” such as universal child care, universal pre-K, universal college access without the specter of crushing debt, require what at this point have become practically trivial realignments of wealth in a $20 trillion annual economy.
In other words, poverty and radical inequality are now purely problems of wealth distribution, not wealth production.
Elizabeth Warren’s willingness to recognize this in even the most preliminary and modest way makes her a “radical.” Of course the real radicals are the people who think late 19th-century America represents a desirable model for 21st century America.