It is an old point to make… But boomers did get a pretty good deal out of their free education and plentiful unionised vacation jobs. Then they got into power and cut taxes on their own incomes, thus going a long way to denying the same privileges to subsequent generations. And yet some of them continue to complain about feeling disrespected, and unloved.

Recriminations aside, student debt has become something of a millstone around the necks of anyone not blessed with parents wealthy enough to help pay their way through university. Thanks Mum and Dad! Now Covid’s over, I’m off on my OE to Europe, with Grant and Charlotte!

Meanwhile for nearly everyone else… It's not as if student debt was avoidable. The Debt Generations have faced a workplace reality where credentials are necessary to even get in the door for a job interview. Amid rising course costs, regular subsequent workplace restructurings and re-training, unreal house prices and rents etc etc. the long shadow of Student Debt has - for many - helped turn the mythical progress to a home and family into a hard struggle, if not an impossible dream.

In the US, at least the Biden administration is trying to do something about it. The gist of its plan is to cancel a sizeable chunk of student debt: some $US10,000 of debt for people currently earning below $US125,000 and $US20,000 of debt for people (many of them black or brown) whose low incomes had seen their study costs being subsidised by federal government Pell grants.

The Biden proposal still has to get through Congress, where – naturally - the Republicans oppose it. Tax cuts for the rich are fine but student debt relief for low and middle income earners? That sounds like socialism.

There are plenty of panic stories about how this plan could blow out in cost, and induce people to take the “wrong” courses (ie in arts and classics) in the knowledge that Uncle Sam might bail them out, given that minimum wage jobs are supposedly all that arts degrees are good for in today’s economy. Why, so the critics say, if student debt relief for arts courses is made possible, China will win because Chinese kids will be busy studying science and maths! This New York Times article is a recent example of this kind of immoral panic. As usual, the costs begin by assuming the worst conceivable outcomes. Oh and yes, forgiving student debt would be inflationary. But isn’t everything?

The question for any New Zealander being… Why is a student debt relief plan unlikely to be a burning issue at next year’s election? IMO, it is a mistake to regard student debt purely as the outcome of individual choice. Isn’t it also a product of society’s structural failure to provide equitable access to tertiary education?

Are we so wedded to the neoliberal laws of the jungle – only losers would want state help with paying back their student loans – that we can’t even imagine the social and economic benefits of helping generations of current and former students to get out from under this boulder of the boomers' own making? Personally, I’d rather give debt relief to former students, than shower mega tax cuts on wealthy people who don’t need the extra money.

An interesting aspect of the Biden plan is that the Democrats – at this point - seem willing to risk the potential blowback from voters who gritted their teeth and paid back the loans in full, already. In an encouraging show of faith in voter altruism, the Biden administration seems willing to act as if such voters would be compassionate, and would support this belated attempt to ensure that the full cost burden of getting an education doesn’t fall quite as heavily in future on anyone else. For that faith alone – provided he stands firm – Biden deserves praise.

Driving Miss Crazy: the Truss U-turn

For some fairly obvious reasons, New Zealand journalists have been comparing the Liz Truss plan to cut taxes and social services in Britain, with National’s own… Er…. Rather similar plans to cut taxes and social entitlements in this country. Yet when questioned, National’s deputy leader Nicola Willis has responded as if she’s being harassed by wilfully surly year eleven students. She has done her level best to E-X-P-L-A-I-N the differences, otherwise not visible to the naked eye. For instance, the Truss tax cuts are bigger. [Editor’s note: Britain is a bigger country. It has more taxpayers.]

Moreover, Willis added to RNZ, in the UK they’re doing this stuff all at once- tax cuts, social service cuts, borrowing etc - regardless of the existing fiscal/monetary conditions. Whereas National plans on doing the same stuff regardless of the fiscal/monetary conditions – but with more rigour – over the course of its first term in office. Big difference, right?

For argument’s sake, let's assume Willis is right. Personally, I think the UK situation is different in some respects. For example: now that Truss has done a U-turn and dropped her plans to scrap the top tax rate, the UK package is mainly about imposing a further £18 billion of cuts to social services, while – on the side - also temporarily helping Britons to pay their winter energy bills.

On the other hand, National is forging ahead with its plans to scrap the top tax rate and deliver the biggest tax breaks to the wealthiest of New Zealanders. Also, since it is ever so fiscally responsible, National will help to pay for this handout by scrapping the likes of the Winter Energy payments that ensured Kiwi pensioners could heat their homes during our coldest months. Not even Truss is doing that. Do our pensioners know what chilly news National has for them? Not yet, and probably not until they’re shivering their way through winter 2024.

Hmm. Maybe – just like our business executives - pensioners here have grown soft on government coddling and wasteful handouts. Anyone can see how there’s a big difference between here and the UK. Oh, those journalists!

Spending, Shpending

As this column showed on Monday with empirical data, Willis’ insistence that New Zealand needs to cut the top tax rate to attract and retain skilled talent is completely bogus. Kiwis are heading off to Australia (and elsewhere) where headline income tax rates are higher. So – by a wide margin - are the wages. To any sane person, this suggests that the real problem with New Zealand is low wages, not high taxes. (The predatory prices in New Zealand for food, rent and internal travel don’t help to attract and retain top talent, either. )

Low wages are a big part of the reason why in Auckland, some secondary school kids are currently dropping out of school to help the family pay the rent. On that score, it is worth noting that Willis and her party opposed paying their parents a higher minimum wage to help make ends meet. If elected, National would also reduce the ability of workers to organise collectively and negotiate effectively for higher wages.

Finally, the point is not whether - with strenuous effort - it could be made fiscally affordable to give an extra $18,000 a year handout to top earners, and only $850 a year to the squeezed middle class over whom National weeps copious crocodile tears. It is whether in the social conditions that prevail in New Zealand, tax cuts that mainly benefit the rich are morally acceptable.

Footnote One: The other fakery b/s that Willis keeps peddling is that Labour has indulged in buckets of wasteful spending. Newsflash: it hasn’t… This table shows that government spending as a ratio of GDP is actually on track to steadily decline every year from its Covid-related highs to only 36.4% in 2027.

Is that high? No. As almost everywhere else in the world, Covid caused a bump in government spending. But compare Labour’s performance on the exact same measure to how the UK fared. This table shows that the Tory government also indulged in Covid-related spending, but at a rate considerably higher than the Ardern government. In 2020 Labour government spending was at 41.68 % of GDP.. That same year in the UK, those austerity-smitten Tories were spending at a rate of 48.92% of GDP. Come 2021, Labour here was spending at a rate of 42.58% of GDP; in that same year, the Tories were spending at a rate of 44.87%. Even by 2027, government spending by a Conservative government in Britain is being predicted (at 37.54%) to be sitting well above the 36.4% level that Labour is being forecast to meet.

Sure, some isolated examples of “waste” can always be claimed under any government, anywhere. In April however, Christopher Luxon was unable to answer Jack Tame’s repeated invitations to cite examples of wasteful spending that had been significant enough to have moved the dial on the inflation rate. As the above figures indicate to the contrary, there is empirical proof that Labour has not been a spendthrift government. Besides: as others have noted, the market reaction to Truss wasn’t caused by the prospect of irresponsible spending; it was caused by the prospect of irresponsible tax cuts.

Footnote Two. There is another, more striking way of refuting the ongoing Willis fakery about “wasteful spending.” At the current Conservative Party conference, one backbench Tory critic of Truss made this illuminating remark to the Guardian:

.“[Truss] loves the Thatcher comparison, but Thatcher was ultimately a pragmatist,” says one MP. “Far from rolling back the state, she never let public spending drop much below 40% of GDP.”

You read that right. Under this allegedly wasteful Labour government Finance Minister Grant Robertson has reined in government spending to the same 35-40% of GDP range that Margaret Thatcher promoted during her hey-day. If anyone has got a valid complaint about government spending, it is the beneficiaries to whom Labour has fed pittances, in line with their dedication to fiscal orthodoxy. Centre left voters who wanted Labour to do more about social inequality also have a genuine beef with this government.

The Beths’ Expert Pop Taxidermy

As their recent national tour – and new album – have shown, the Beths have developed a whipsmart command of the components of the popular song. So much so that while their gigs offer buckets of good clean fun, there’s also nary a whiff of existential risk in the songcraft and musical aplomb evident on stage. This can be a bit surprising given that songs like say “ Future Me Hates Me” seem – on paper at least – like they’re offering a very soulful twist on the old self-destructive “ I’m a fool for love” template.

Arguably, this slightly airless quality comes with the territory. It can also be a feature of the Canadian bands that IMO, most resemble the Beths – like the New Pornographers, and Alvvays, who have a new album out, too. Molly Rankin, the singer/writer for Alvvays can seem at times like a spiritual twin of Elizabeth Stokes of the Beths.

Here's “ Future Me Hates Me”…nice Wes Anderson-ish aspects to the video, in case we missed the archly ironic distancing in play here. If there was ever was angst involved in the song’s creation, it's been safely and expertly buried:

And here’s the brand new single by Alvvays:

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