there's $1.00 trillion dollars in outstanding debt today in america that is up from $363000000000.00 in just 2005 joining us to discuss this dr michael hudson professor steve kean and randy roll or professor steve kean of course you talk a lot about debt and in fact increase the rate of increase of debt what do you think of that number $363000000000.00 in outstanding student loans in 20051.6 trillion today which doubling every 2 years which is a huge right of growth that simply can't be sustained indefinitely and that's whether by the students themselves coming on board well by the windows it's a huge increase in the private debt load on the economy and it's falling on the people who earn the least money and it's setting them up for being able to participate in the rest of the economy lifestyle which is also driven by did so i think is one form of it is going to basically 8 the student debt is going to make

it impossible to keep posting household that so the financial sector is eating itself i'm so old i remember the 2008 financial crisis and if you recall the sub prime debt bubble up and we have this global meltdown the student debt is already bigger than the subprime debt bubble. that was about an on trillion dollars when you look at it went from $6.00 to $9.00 on trillion between about $22000.00 and fog so we're not talking the same sky loving christian debt we're talking they did go on turning in income and then when they graduate they're graduating move off what about $100000.00 u.s. dollars is a level of debt the average is $30000.00 and in fact it's non dischargeable prior to the what happened with the subprime crisis was people could do the jingle mail and walk away students can never walk away from this almost all of it is essentially owed to the government so the government owns you anyway and you can't escape it you can't just jingle mail away from the u.s. government 30000 is this thought. level and i did graduate. something of that scope

a year so this starting with the debt to income ratio 100 percent before they even paid the rent a little on consider paying a mortgage max and i graduated before 1900 $91.00 you all graduated around that sort of time the rate of increase since the 1980 s. and a lot happened in the 1980 s. we could talk about the rate of tuition increase has gone up 8 times faster than income when i went to u.c.l.a. i was able to afford the tuition and my own apartment by working part time in stationery shop you can't do that today dr michael hudson when you have to so houses just like the house is worth whatever a bank is going to lend against it and those banks lend more and more for housing the housing prices went up and education is worth whatever a bank is going to lend a start and the government banks drop the student loans you pointed out an

interesting thing a key point recently the subprime debt was owed to banks but the student debt is no owed to the government so that means that the government could wipe out all the student debt and it wouldn't hurt any creditor at all it could be wiped out without any disruption of the economy and in fact unless it's wiped out the economy will be distorted because as steve cain just said if you have to pay a lot of money and student debt you can't afford to get a bank mortgage to buy a house of your own then they're going to end up living with your parents you know awol dr michael hudson here according to moody's erasing student debt would be a small stimulus but would it create moral hazard all of them are or has it but i wouldn't know what is the morrow if he had worked the moral hazard is if the rich families that can afford to send their kids to school without an education would no longer be able to lord it over the. families that are driven into poverty by

student death the moral hazard is that there wouldn't be a polarizing economy between an oligarchy at the top and a democracy at the bottom that's the moral hazard according to the l. ike archaean according to the neo liberals and the bringing it back to the subprime crisis moody's unless very much responsible for that now randi you of course. have been involved with your bernie delegate back in 2016 tell us what bernie thinks of student out what his plan is and how that relates to the his he's very popular with the generation z. and the money obviously is very popular because this is one of the single biggest issues holding the generation down and his plan is simply to wipe out all the student debt and then come back later and lower the interest rate to below 2 percent i think 1.8 percent right now the rates are between 4 and 7 and i don't really know i didn't have student at either c.c.

i don't really know what happens when you default but i do know anecdotally that when you're paying your taxes and you think you're going to get your stimulus as a refund the i.r.s. collects feel student debt. so i know that his plan and these are policy stacy when my parents met at u.c. berkeley in 1960 it was free to go to berkeley and you paid for incidentals now it's 13000 dollars if you're in state and $40000.00 out of state these are actual policies made by people in government that decide as robbers time what who's going to go what when i was 3 universities well they would just before i started but they were trivial relative to the costs today because the bureaucracy in universities was trivial the head of to pop and my predecessor effectively would have a meeting with the vice chancellor and talk about the budget that was needed and if you have a luncheon that was the end of the discussion now listen and tog bureaucracy involved in doing that so a huge part of the increase in cost of universities has not been my. going to the

academics or the city's facilities for students is this enormous bureaucracy which is part of this whole student it the whole overload then what is that that's neoliberalism get it instead of believing you should managers make things work better you need managers to like it it makes what can do but also these universities are acting like gatekeepers there are small number of jobs where you can make the elite type of mega millions and folks are willing to pay i went to n.y.u. back in the seventy's and eighty's i was shocked to find out that tuitions out over $50000.00 a year so you really can't afford that much and even you've got celebrities in hollywood folks adding another 2 or 300000 in bribes to get into a university is going to cost $2.00 or $300000.00 to begin with because they want to get the job at the top of the banking system that the bank of the ponzi scheme the financialization straightest enormous bodies game if you want access to be at the top of the pond you've got to go through the ivy league you've got to go deep into debt you've got to pay another huge bribe and that just disenfranchise is so

many millions of people that won't have any access and also the whole point of universities not education anymore they are acting as gatekeepers to the elite oligarch attentional ism i mean i have had students tell me that only university to get a job originally my father was a universe to get an education and if you make good old credentialism you end up devaluing the quality of the education itself so in that with a list genuinely educated workforce and the caliber of the teaching to join in this whole period of increasing costs the student to stop ratio has been fooling this list off teaching there's more mocking a load everything is being will make a knowledge of the personal contact is declined so rather than this increase in cost reflecting increase in important quality it's actually a degradation of that and just a huge bureaucratic wire over the top well the result of what the talking about is there's been a whole trains in the shape of the how much education. as to your earning power it

used to be the more education you got to the ph d. the more you would earn but no that's been reversed certainly in my field economics once you have a ph d. in economics you're so brainwashed with the vision that the only thing you can do is teach but the universities in order to pay all this money to the administration overhead that steve pointed to they want to hire part timers to teach you can only get an edge on professorship for maybe $3000.00 a court so the higher your education the less qualified you are to actually work in the real world especially in economics one anecdotal point is i have some close friends that were really happy that their daughter got into a very prestigious school in boston and i asked how they're going to pay for it it was $70000.00 and they had saved and they had money and she was going to get loans and i asked him point blank based on what she wanted to study i said why don't you just buy her a house in las vegas where you live for 280000 dollars and give her the house and

centers of community college she'll have an asset with no debt she'll live there and get a skill it's a good question meant when you're spending 70000 a year and she would emerge she may not have debt but others could come out of there with $1150000.00 a day and that's how the 5 guys burger chain got started the dad said i can send you to college so i can start some business together they started 5 guys burgers now they're all going to florida by university getting back to what max the saying about the gatekeepers the problem doesn't just begin with college it begins in kindergarten here in new york city it costs more to go to kindergarten and grade school this does go to college and in fact you remember in the stock market crisis when the citi bank was having a fraudulent stock broker the deal with the stock broker is we will get your daughter into kindergarten if you give a good stock market report here and that. the weeding out process begins already.

in grade school to go to a school of can get you in to the prestige coed so it really is a right of terri aristocracy that's emerging we're talking about i knew you were going to say this because that's why i wore my kindergarten outfit. because i thought this was going to come up in fact we've had this scandal as well not only do we have the celebrities and the powerful people apparently paying bribes to get their children into these schools which shows you that even though they have this huge wealth that the importance of getting that degree from a particular university regardless of what you actually learn at university is so important now in our economy and we have the hereditary issue is something like 40 percent like a huge percentage especially white americans at harvard are you know certain select universities are actually children of families that are powerful or when they're this is the definition of like an aristocracy or all the darky that is being entrenched in this economy right didn't the universities were and libraries are

built by the rich to give back now the pendulum has swung the other way they're using them to ossify calcify their place as the elites saying these job ridges that once you get over the bridge they pull it up and everyone else is left adrift right so if there are no public institutions then there is no public domain and there is no common good and we have not escaped the monarchies of europe and we brought back a central bank what's the difference now between you know where we were 200 years ago before we even bother with the declaration of independence of ellen association i mean that's that's the point is should we actually be charging for education because this is we charge for things is because it's a benefit to the person who's buying it and that's the audi goals you took over education about 30 or 40 years ago but the perspective of education was originally that education is a benefit for saudi in general i would. i want to live in

a society without doctors or engineers all saw just happen without a qualm it's. saying it of being a profit benefit ignoring the public means that way ignoring that the skill by says we need for a sophisticated society and putting the burden of that skill ice is on the individuals and what we turned it into is just now the china institution public higher education become a form a version of a real estate scam that is not the basis for a functional society ready we're going to be back after the break so you can go to school on us right after this.

so. 6. 6. ft tall. and very well can see you watching us and. is now gone for it do 50 mojtaba musical number 2 number one when you have no kids are getting a good looking woman follow him and don't going to. see him all the good that you did down the percentage of all who sign up for the only exit has a. call since he was in the uk of the guy on the team all day long.

but it is with us that i will call upon you all that he would rise up this morning at the outlet is a. message the multitude of it to you all to the person your son some of it to. go some. locals to the world put him in a business school commission a little musical with the most who. is the new. plan to pull funding for the secretary will mean our girls. welcome back to front running 2020 with max kaiser and stacy before the break we were talking about $1.00 trillion dollars in student debt and we left off on this idea of competitive stacy yes germany has free education america

has expensive education and yet it seems that germany is out competing us steve basically risen because you're not relying upon the students for fees so they get into university but to get a good mark you've got to be an intelligent person to get and not a lot of will she want to want somebody who's borrowed money consequently you can afford as an academic to file the students if they don't do addition job whereas if you try to file students with the think of borat and they deserve to get what they paid for which is a degree and that is that subverts the whole purpose of education of experiences over a 30 or 40 year period in academia and i've seen the quality of the capacity to file bad students simply collapse so what is happening universe is graduating people with credentials but not in education but the fact is we do have a problem with household formation it is at a record low and a lot of this many economists say is because of the student debt so when people

argue against for giving this debt and remember elizabeth warren and bernie sanders definitely want to forgive this debt but the argument against it is like it will create the moral hazard and all these other people paid and they worked hard to pay and why should we forgive these debts which is better for the economy however that those debts get made whole and that they pay they're paid off or household formation how important is household formation to an economy you have to put it in the context of how competitive the economy is in terms of how many jobs it has in the 1st place no take the case of germany where steve mentioned if you don't. can go to school and don't have to pay tuition that means that you can afford if you're a doctor to provide medical services or an engineer to provide engineering services or you can afford to work for a income that does not require you to add on a payment of student debt in america if you graduate with a for

a deficit of $300000.00 of student debt from and or use a dental school you're not going to be able to afford to take most jobs that don't pay enough to pay the student debt so you're going to default now so the real question about moral hazard is it worth polarizing the economy and impoverishing the whole class just for the principle that all debts can be repaid when a steven i say we know the debts can't be paid me and then the way to follow this false dream that somehow the economy can afford to pay its debts and somehow the rich people deserve to impoverish the 99 percent of the economy this further and further and that the real moral issue is should the 99 percent be indebted for student debt mortgage stepped. all the other forms of debt to the one percent that that's the moral issue and should america give up its hope for competitive economy

just to make students pay for a loan so that you can afford to have the rich families monopolize education and lock out families that cannot afford the $40000.00 that it takes to get into kindergarten in the american. way you also have as we've mentioned earlier that tuition's have gone up there is that the tuition prices for their private university public universe a public university is a pyre and these are wages wages of state but the wages if you do the wages of professors they've gone down and down and down because they can only get part time jobs as professors so the professors jobs are going downhill all the university because their. our time is right the universe the costs are going up because their office a big bureaucracy is what i think of as the neo liberalism and neo liberalism seems to have really come in after we went off the gold standard you can create all sorts of money could create all sorts of day credit and the boomers were 1st then

we're not saying they're horrible people they were lucky they got to be the 1st one on this near mint scheme and now there is a battle there is a reconciliation to be made that the millennial are stuck with these huge debts and how is this going to resolve itself it's going to resolve itself through revolution as bernie says our revolution or it's going to resolve itself at the ballot box and i think that as more people get fed up and they get interested in casting their ballot on these issues that are basic issues and i'm indebted to the one percent and i'm basically working a dead end job i've done radio shows where people call in and said i did the bear can dream i got 2 degrees you know i went to school and i'm up to my eyeballs in debt and i get paid less than $40000.00 dollars 'd a year in wake county north carolina i'll never be out of debt and yet they did what they were told to do this will be resolved at the ballot box and that's exactly why bernie is incredibly popular with millennialism jonesy it's

a contrast to pro-choice or sanders wants to make college for a while elizabeth warren has proposed a billionaire's tax that she said would pay to eliminate up to $50000.00 an education loans are either of those viable are there is there any difference between those 2 how would you characterize the if you went that we said before nobody has to suffer the government doesn't need the money the government either can print the money or it can raise the taxes a large part of the problem arise from people saying we have to pay for things like education using taxes and that's a benefit but on the state let's impose a burden on the individuals who are benefiting from education instead the. the opening thesis is wrong it is the government has to tax in the order to be able to be spent to spend and part of what is called modern monetary theory which is a major factor in this to this if you like simply for the 1st time ever. the progressive economic theory is part of the political divide makes the point that

governments actually spin before they tax governments by spending part of the money that enables the private sector to function now if the government tries to tax more than it spins that means it's actually taking more money out of private bank accounts and it's putting into them. which means you're reducing the amount of money that actually makes the economy operate in fact the government is the only institution to saudi which can manage to spend more than it get this back in income because it owns its own bank now that means it should actually be spending more than it gets back at sexiest sensible thing within reason for it to do i have a history america's government has spent 2.4 percent of g.d.p. in more than a 2nd in tax every year on average for the last 120 years i would rather have a do that by funding education than funding it bureaucrats in education funding bombing other countries so in terms of a wide government actually creating the money creating it by financing education is a much better way to do it than virtually any office and that's why it should be

funded by the by bernie's scheme of the government simply paying for education and the tech social scheme this is very important because it clears up a widespread misinterpretation that vice president biden. contributed more than anyone else to he said unlike all other forms of debt student debt cannot be forgiven cannot be wiped out by bankruptcy because it's owed to the government and we don't want the taxpayers to loose a penny but modern monetary theory that steve and i both believe in the fact is wait a minute taxpayers won't lose a penny if you wipe out all the student debt because the government will fund at the same way it funds the bail out the some way it funds many of the military industrial process that will simply. print the money it doesn't need the money so all biden did was put in a very nasty thing we're going to make students that are not born rich are going to really suffer because when they can't pay they cannot use bankruptcy that all the

rest of the population can use it's this one of the most perverts arguments made in american politics just to clarify it was vice president biden as a senator who introduced the bankruptcy reform. ormus which actually made it very difficult this is discharge many debts but impossible almost impossible to discharge student debt. read 19 eighty-four and he know what doublethink. financial gerrymandering. politically parsing they decide in ways for political gain you know and the thing is about this occasion market and again referring back to n.y.u. it's really a property development firm disguised as a university the property development is enormously profitable all because the way students are crammed and professors are underpaid and the people who run new york university are property developers like a trump who are fabulous the wealthy disguised as an institution of education

that's clearly not what's going on yes you're exactly right max this is what's going on with charter schools and even in higher education what they do is they own the real state and they lease it back and sometimes it's 2 separate organizations but it's controlled by the same group just just how mcdonald's made a lot of money owning the real estate you have a franchisee there doing the same scheme with some of these real with some of the real estate in higher education or public schools faced with k. through 12 and ultimately what it's doing is creating more debt it's creating a lot of wealth for the one percent as rob was talking about but it's not producing an educated workforce it's devalued education dramatically over my career as a professor the whole idea that you should be able to bondage is a fallacy you should be posturing in education you should achieve a standard which means you've got got the skill set you want to stand the technology you understand the philosophy whatever is involved you know discipline that's what should be the arbiter and instead that's completely gone away with this

increase in student debt is going to degradation of the call that you have education and we should get rid of it and go back to the dyes was provided by the state but it was difficult to get in you need to get good marks and be intelligent to get into the pit you get a little bit of education you need to study hard. bringing it back to germany germany has apprenticeship same programs we don't have that part of it is this neoliberal economy got to be like a celebrity kind of a doing nothing mckinsey ask sort of think tank or so is that it was how do we even bring back vocational schools though if we don't even have an industrial capitalism here anymore michael hudson well you know when you may have mentioned china also where you have the confucian system where you have to take tests in order to get into the university and the people who get in are the people who do the best in tests so again we're having a whole international divide we're having that part of the world where people get an education on the basis of merit and intelligence and here where people get

education in proportion to that well how much wealth they've inherited from their family and which of their ancestors have gone to the most prestigious schools so that they get a legacy they were having a bifurcated economy or that is the exact opposite of what the more successful economies are doing and these successful economies have much lower costs of exit they can afford to compete because they don't have this overhead of a sort of idle. aristocracy night so student debt cancellation is that a winning vote getter yes or no dice rather than absolutely yes because if a student can pay the debt it's a bad loan you know it's in a winning day idea and it'll make the economy and the saudi better for it bernie bowler yes i agree it is and it's actually going to turn out a huge amount of vote for bernie sanders well that's going to do it for this edition up front running 2020 with a mass kaiser and stays there but by the way i giving it all straight a's are a lot of my grade inflation until next time by.

time after time called parishioners repeat the same mantra sustainability it's very important it's accelerate the transition to sustainable price board sustainability stay in her manner the more equitable and sustainable well. they claim their production is complete the hamas follow dissolute. lead kakadu to congress number articles and not it builds on the companies want us to feel good about buying their products while the damage is being done far away and this is something all of this must be going down even and i mean look. this is the move and you listen to me do me man and i'm stymied seemed to be based on that understood look to what is going to.

join me every thursday on the alex salmond show and i'll be speaking to guest of the world of politics sports business i'm show business i'll see that. the.

turkey releases it for employees of russia as it's put nick news agency of the journalists had been detained on saturday and questioned by police. greek police clash with migrants out the turkish border after ancora gives the green light to asylum seekers hoping to reach the e.u. in an apparent bid to pressure nato into backing its offensive in syria is italy and has been a long week for joining us and his supporters of within the 1st phase of his u.s. extradition case now complete during the hearings that we could expounder was kept in a glass cage and denied the opportunity to interact with lawyers so he says we hear from one of them. couldn't take part in the court process this is in.