Folbre is one of the the better economists, but this is a trail of slime without redeeming intellectual value in service of a con job. And obviously botched.
What does this miss?
- The boomers are charging people for education thrice: once through taxes to pay for intergenerational transfer, once through loans – both direct and for housing – and once by licensing everything, including culture. Charge three times early.
- This has a second cost, since the young can't invest, they are facing the miracle of compound interest in reverse. Every 1000 dollars of additional debt means an additional 10000 of cost at retirement, given historical 2% real returns. That's real, not nominal 10 fold cost.
- They cannot discharge any of the debts from (1) by bankruptcy. That is, these are serfdom loans that follow a person to the grave. The boomers, in an era where returns are hard to come by, are locking in well above market returns from licensing, education rents, and housing rents that are being artificially propped up.
- She of course dishonestly does not mention that the cost of college education has been going up faster than inflation for over 20 years. This patently dishonest, inexcusably so, this compounds the shift from grants to loans.
- We haven't gotten to the externalization of carbon - charge the boom a relatively standardly quoted figure of $35/dollars a ton for carbon, and they are so far in the hole that they will never dig out.
- Other externalization of costs, including consuming biological value of anti-biotics, are also left unpointed out. Then let's get to the gift of Iraq, which is going to keep on giving.
- Unaccounted for is the absolute versus relative value of education. How much increases the real benefit, and how much is defensive to avoid being penalized. Realize that lower educational attainments are either dropping in value, or their increase is going down.
- We of course note that as with many historical surveys, by including the double boom of 1983-1999, her numbers assume that the Reagan-Clinton bubble is going to start tomorrow. Not going to happen, it was a one time robbing of energy, not to be repeated.
In short, her piece is a dishonest aplogia for economic rent. It boils down to "we were here first, so whatever we decide to charge you for the grace of educating you, is what you are going to pay." Arguments in favor of setting economic rents at arbitrary values are the heart and soul of conservative economics. The only difference between Folbre and Santorum is where, precisely, they draw the line – there is no difference in essential ideology, only in which old people are in the magic circle.
This is why there is very little point in writing at this point: the past is dominated by corrosive conservatism, even among the so called liberals. One might as well ask who the liberals were in the first two Estates of the Estats-General of 1789. Sure, there were a few. A few. But in general, even the most radical members of the privileged could only be described as reform minded aristocrats. That Folbre is so patently dishonest in her suppositions means that there's no discourse possible.
"Those who make peaceful revolution impossible, make violent revolution inevitable."