Economics 101 for Protesters

          As the Occupy protests continue we are beginning to see lists of demands.  While the demands differ depending upon the inclination and location of the group there is some commonality.   They want the government to pay for the things they want.  Many of these protestors claim to be college students, but clearly they have not been taught that there is no such thing as a free lunch.  Taxpayers provide the money that government uses to fund “free” public services.  Here are three common demands of the Occupy protesters that defy economic sense. 

1. Forgiving of all student loans
          There is over $1 trillion in student loan debt that the protesters want forgiven.  Congress would have to find a way to finance such a program since the majority of student loans are owed to the federal government.  I cannot image Congress in a post-Occupy Wall Street world cutting government programs so that would mean a minimum $1 trillion dollar tax hike. 

          Some of the groups are demanding the forgiveness of all debt.  While I would love to have my home mortgage disappear, such a radical move would crush all the banks and credit unions in the country and destroy the credit of the nation.  Considering the number of pension funds that are invested in bank stocks and bonds, such a radical move would free the students of debt while sending their grandparents into poverty. 

          Forgiving just credit card debt would cost almost a trillion at $866 billion.  There is currently about $13 trillion in mortgage debt so eliminating just those loans would nearly double the current national debt.           

2. A government mandated living wage
          After four or more years of free college education, the protesters want the government to guarantee that they have a good paying job.  Some in the movement have suggested that this living wage should be pegged at about $20.00/hour.  If the labor of an employee brings in less that the government-required minimum wage, the business will lay off that employee.  To state it another way, as wages go up, prices go up and, because labor is expensive, employment goes down.  I’m old enough to remember when gas stations had attendants who pumped your gas and checked the oil.  When the cost of such jobs exceeded the money earned, those jobs disappeared.  Gas stations became self-service.  Government mandated wage laws are job killers, not job creators.

3. Free college education
          As I said at the top of this blogpost, there is no such thing as a free lunch.  However, if this nation ever does provide a “free” college education for everyone, I say make Austrian School economics a required subject.  If we did so, in a couple of generations we would have citizens who knew that someone pays for anything “free.”  Who will pay the college professors and administrators and maintain the huge grant buildings on the campus?  The answer is anyone who pays taxes.         

          I’m a public school teacher and a union member.  Clearly, I’m not one of the wealthy one percent.  The Occupy protesters claim to represent 99% of the country, but they do not represent me.  In the novel Atlas Shrugged by Ayn Rand, the character Francisco d’Anconia asks Hank Rearden the following question.   

"Did you want to see (your success) used by whining rotters who never rouse themselves to any effort, who do not possess the ability of a filing clerk, but demand the income of a company president, who drift from failure to failure and expect you to pay their bills, who hold their wishing as an equivalent of your work and their need as a higher claim to reward than your effort…that yours is to produce, but theirs to consume, that you are not to be paid, neither in matter nor in spirit, neither by wealth nor by recognition nor by respect nor by gratitude—so that they would ride on your (success) and sneer at you and curse you…?”

          To me the Occupy protesters sound like the rotters of the novel.  To fulfill their wants they claim the profit of my work.  When the wants of one person become a claim on the work of another, the spirit of this nation is in jeopardy.  I would rather throw my support to those who work, strive, produce and succeed than join in the rabble who demand the sweat of another man’s brow.