TAXPAYERS SHOULDN'T BE EXPECTED TO BAIL OUT THOSE WHO WILLINGLY ASSUMED STUDENT LOAN DEBT!

 Weekly Opinion Editorial

ACTIONS HAVE CONSEQUENCES!

by Steve Fair

       Student loans in America amount to more than $1.7 trillion, according to the Federal Reserve.  That is the second largest amount of debt for U.S. households, behind mortgages.  46 million people have student loan debt (13% of the total population). 8 million are in default on their student loan.  The average student loan debt is $32,731.  40% of people with student loans didn’t finish college. 61% of those in default owe less than $10,000. 

     President Biden has said he favors forgiving $10,000 of student debt, but Congress hasn’t warmed to the idea and he has been relucent to do it by Executive Order (EO).  Senator Elizabeth Warren, (D-Massachusetts) said Sunday on Face the Nation, she is pushing Biden to forgive $50,000 of student debt.  She claims Biden has the authority to do it by EO and he needs to do it before the midterms.    

     In the late 1990s, then U.S. Senator Joe Biden played a role in helping establish and expand the current student loan system, which makes taxpayers co-signers on every student loan.  Biden was one of the architects of bankruptcy reforms making it hard for those with student loan debt to discharge their student loan debt by declaring bankruptcy.  President Biden likely regrets that.  Three observations:   

     First, the government and higher education created the student loan debt crisis.  The default crisis is a direct result of the fed’s reckless student lending policy.  There is certainly a role for government in fixing it, since they created it, but that role is not to cancel loan debt.  Colleges and institutions of higher learning ‘sold classes’ to students who had no business going to college.  Colleges were more interested in increasing revenue than educating students. 

     Second, forgiveness of student loan debt will increase inflation.  The Committee for a Responsible Federal Budget(economists) estimate cancelation of 10k of student loan debt per person will increase inflation by .5 percentage rates over the next year.  Senator Warren (not an economist) disagrees.  “As President Biden himself says, the way we deal with inflation is not by making people poorer.  The way we deal with inflation is we attach high prices head on, such as price gouging.  We straighten out the supply chain, so goods can come in to people.  Canceling student loan debt is something that would be good for people all across this country and more importantly, good for our economy overall.”  Warren said.   The government has neither the manpower or the brainpower to police price gouging, let alone fix the supply chain?  Government bail outs and giveaways are why we have inflation. 

     Third, borrowers should be responsible for their student loans.  While the government’s irresponsible lending practices and college’s zeal to sell classes to people played a role, the borrower made the decision to incur the debt.  It is not the taxpayer’s responsibility to ‘bail them out.’   Government should reduce administrative fees and seizures on borrowers who are in default.  Those fees often result in more than the principal.  They need to make sure low-income borrowers never face a situation where they can’t make the monthly payment.  They should guarantee those who owe less than $20,000 who are making payments on time never go backward because of fees.  The feds should penalize colleges where class selling is a practice and limit their ability to be eligible for student loans.  Ultimately, the person who signed the note, and not the taxpayers, should be responsible for the debt.  Actions have consequences.

     President Biden has extended a repayment moratorium on repayment, interest and collections for federal student loans to August 31^st. This is the fourth extension since Biden took office.  Expect some sort of student loan debt forgiveness before the midterms.  With $4 gasoline and record food prices, Democrats must do something to excite their base.  If Biden cancels student loan debt, it will reinforce the idea Americans should rely on the government to fix their problems when they willingly assumed the risk. 

VOTERS SHOULD LEARN TO VET CANDIDATES & NOT GET CAUGHT IN THE VORTEX!

 Weekly Opinion Editorial

A POLITICAL TORNADO!

by Steve Fair

     Last week, a host of candidates filed for office in Oklahoma.  The Sooner state is one of only two that have both U.S. Senate races on the ballot (California is the other) in 2022.  A total of 26 candidates filed for the two seats.  13 Republicans filed for the seat currently held by U.S. Senator Inhofe.  U.S. Senator James Lankford, up for re-election, faces 2 opponents in the GOP primary.  The 2^nd Congressional district seat, currently held by Congressman Mark Wayne Mullin, who is running for the Inhofe senate seat, has 14 Republicans vying to replace him. 

     Governor Kevin Stitt faces 3 primary opponents.  Lt. Governor Matt Pinnell has no Republican opponent.  State Auditor Cindy Byrd faces a Republican primary opponent and State Labor Commissioner Leslie Osburn has 2 GOP opponents.  3 statewide ‘open’ seats (no incumbent) drew multiple Republican candidates.  There are 3 GOP candidates for State Treasurer, 3 for State Superintendent of Public Instruction, and 4 for Corporation Commissioner.  The Attorney General race has 2 Republicans facing off in the primary.  The current AG was appointed by Governor Stitt, so technically it is an ‘open’ seat as well.  Only 1 statewide elected official did not draw an opponent, Insurance Commissioner Glen Mulready. 

     In the judicial and District Attorney races, 116 of the 148 non-partisan judges were unopposed.  22 of the state’s 27 DAs didn’t draw opponents.  9 of the 24 state senators up for election were unopposed.  32 of the 101 state representatives didn’t draw opponents.   A candidate’s hope is to file unopposed, thereby avoiding a campaign. Three observations:

     First, Oklahoma Republicans will need to buy bigger mailboxes and stop watching TV.  GOP voter’s mailboxes are about to be full.  With the Republican primary just 70 days away (Tuesday June 28^th), candidates will be bombarding voters with multiple mail pieces.  Slick, well produced television ads will dominate the airways.  Facebook, Twitter and other social media platforms will be flooded with political content. 

     Candidates will tout their superior qualifications, intelligence, judgment and their opponent’s shortcomings and deficiencies.  The truth in labeling Act doesn’t apply to politics, so not everything that will be mailed will be truthful.  Campaigns bank on ‘low information’ voters(people who only pay attention every two years).  That avoid the hard issues and instead appeal to voters on an emotional level, because it is a proven tactic. 

     Second, voters need to learn to properly vet candidates.  Don’t begin questioning a candidate with an editorial statement of your position on the issue.  You are not the candidate.  The goal is to find out what the candidate’s stance is on the issue. They are the one casting the vote.  Listen carefully to the candidate’s respond and insist the question is answered clearly and concisely.  When viewing campaign ads and material, recognize candidates always paint themselves in a positive light and their opponent in a negative light.  Ask people who are more engaged than you in the political process about candidates.  Pray and ask God to give you insight and discernment about who to cast your vote for.  Don’t base your voting decision on a yard sign, a mail piece, a TV ad, or an eloquent speech.  Your vote is a sacred right- cast it wisely.  All candidates/politicians are not alike.  Be an informed voter.

     Third, respect all who run for office.  It takes courage and resolve to file for office.  In a self-governed system of government, having good people put themselves up for scrutiny by running for elective office is no small thing.  You can disagree with their ideas without being disrespectful, insulting, or mean-spirited. 

     In 70 days, most of the statewide races will be decided.  Democrats have a slim chance of winning a statewide race in Oklahoma, so whoever wins the GOP primary will likely cruise to victory in November.  Get ready for a political tornado the next 2 months.  Don’t get caught in the vortex!

U.S. PUTTING THEIR FOOD INTO THEIR FUEL TANKS!

Weekly Opinion Editorial 

DON’T EAT THE SEED!

by Steve Fair

     Wheat is typically milled/ground into flour that is then used to make bread, pasta, crackers, and many other products.  Wheat is one of the oldest and most important of the cereal crops.  It is the second largest grain planted worldwide, based on acreage and production volume.   China, India, and Russia are the countries who produce the most wheat.  Combined those three nations produce 41% of the world’s total wheat.  America and Canada round out the top five, Ukraine is #6.  Ukraine is the 5^th largest exporter of wheat in the world, but have halted exports of wheat to insure a domestic food supply for their own people. The United States produces 2.2 billion bushels of wheat per year and consumes a little over half that amount. 

   Wheat got started in the U.S. when a Ukrainian Mennonite named Bernard Warkentin came to the United States in 1872 at the age of 25 to study the U.S. agriculture, economic and political climate.  He married a girl from Illinois and they settled in Halstead, Kansas, where he built a grist mill for grinding wheat.  Warkentin encouraged his fellow Ukrainian Mennonites to bring Turkey Red hard winter wheat seed with them to Kansas.  By 1874, the Kansas countryside was sown with Turkey Red and soon after Kansas, Nebraska, Wyoming, Montana, Oklahoma, West Texas and the Dakotas were growing the hardy, high yield Turkey Red.  Warkentin owned mills and elevators in Kansas and Blackwell, Oklahoma.  So how is that relative to politics?  Three observations:

     First, Americans are paying more for food than they were last year.  It’s not just products made with wheat.  According to the Consumer Price Index, published by the USDA, food prices (at home & restaurant) are up +7.9% vs. last year.  Grocery store food purchases are up +8.6%.   There are four basic reasons for the increases: (1) decrease in food processing production due to supply chain, labor, and transportation issues.  Food processors are struggling to keep up with demand and struggling even more to keep up with increases to produce.  If they are not able to ‘pass through’ increases, they don’t survive. (2) transportation issues for imported foods, like seafood(65% of seafood is imported), (3) eating more at home.  Overall food consumption is up and many households are stockpiling food, (4) bad weather which has affected crops.

     Second, America is putting too much of their food supply in their fuel tanks.  From corn in Ethanol to soybean oil in diesel, the use of vegetable oils in fuel impact food prices.  Last week, the Edible Oils coalition met with representatives of the White House Office of Management and Budget(OMB), the Small Business Administration (SBA), the Environment Protection Agency(EPA), and the USDA to raise concerns about soybean oil pricing.  The price has tripled in the past year.  Soybean oil is used to make a cornucopia of food products, including mayonnaise and pourable dressings.  The coalition pointed out the biodiesel mandate threatens the supply and dramatically impacts the price of soybean oil- and other edible oils.  They asked the administration to relax the biofuel mandate to stabilize pricing and insure supply of edible oils. 

     Third, even with higher food prices, Americans still have it better than the rest of the world. The average household in the U.S. spends $7,500 annually on food(restaurants, grocery stores).  Food constitutes 10% of the average U.S. household monthly budget.  In Uganda, two thirds of household income is spent on food.  60% of the population in Russia spend 40% of their income on food.  

     A very real threat to the food supply in America is the potential loss of food processors.  Most processors are family owned, small to middle sized businesses, who produce the bulk of U.S. food. They can’t survive without passing through increases to the consumer.  They can’t stay in business losing money. When a processor disappears, prices increase due to loss of production capacity. 

     At the Mennonite Heritage and Agricultural Museum is a ‘seed chest.’  It is the one Warkentin carried the precious Turkey Red seed in from the Ukraine to Kansas 151 years ago.   Warkentin guarded the chest because he valued food, but he didn’t eat the seed on the journey over.  America’s biofuel mandates are America eating the seed.

Biden proposes a $2.5 trillon dollar tax increase that consumers will ultimately pay!

 Weekly Opinion Editorial

ECON 101

By Steve Fair

 

     Economics is defined as the social science that studies the production, distribution, and consumption of goods and services.  There are two basic schools of thought in economics.  Free market/laissez-faire economics and Keynesian economics.  Adam Smith (1723-1790), a Scottish economist and philosopher, is often called the ‘father of modern economics.’  Smith introduced the concept of the ‘invisible hand,’ in regard to economics.  It was part of a laissez-faire/hands off governmental approach that holds an economy will find equilibrium without government or other interventions forcing it into unnatural patterns.  In other words, supply and demand rule the economy.  Smith believed it was the height of impertinence and presumption for government to tell people to restrain their spending when they(government) were spendthrifts. Smith argued a free-market economic system along with free trade would product true national wealth, benefiting all social classes, not just a privileged few. 

     Keynesian economics was named after British economist John Maynard Keynes(1883-1946).  Keynes is known as the father of modern macroeconomics.  Keynes believed government intervention by monetary policy was necessary to help stabilize a country’s economy.  Elected officials in both Parties embrace Keynes’ philosophy in varying degrees.

     Both economic schools of thought agree under ideal conditions, a country's economy should have the household sector as net savers and the corporate sector as net borrowers, with the government budget nearly balanced and net exports near zero.  When these relationships become imbalanced, recession can develop within the country.  

     Some governments highly control their economy.  In the most extreme, they are command economies where the government controls all the means of production, pricing of goods and services and worker’s wages.  Major industries are nationalized.  China, North Korea and Russia are all examples of command economies. In a free market economy, the law of supply and demand, rather than a central planner, regulates production and labor.  Companies sell goods and services at the highest price customers are willing to pay while workers earn the highest wage an employer is willing to pay for their services. The United States, Switzerland, and Great Britain are examples of free market economies. In reality, all economies blend some combination of market and command economies. 

     Inflation occurs when prices rise due to increases in production costs, such as raw materials and wages. A surge in demand for products and services can also cause inflation as consumers are willing to pay more for a product.  Inflation is an indirect tax on people.  Some inflation is acceptable, but when it climbs above 2% per year, it can disrupt an economy and potentially move it into a recession.  A recession is when there is a general decline in economic activity.  People stop spending and producers stop producing until stability returns to the market.  Prolonged inflation can and often does trigger a recession

     The inflation rate in the U.S. is +7.9%- the highest in forty years.  According to Reuters, U.S. consumer debt is growing at the largest amount in fourteen years.  The average household has $155,622 in debt(includes mortgages)- up +6.2% from a year ago.  Government spending is at all time highs.  That is the trifecta of conditions for a recession, likely in 2023.

     President Biden’s solution to attack inflation?  More taxes.  Last week, he proposed a $2.5 trillion dollar tax increase on the wealthy and corporations.  The problem is corporations don’t pay taxes- people do.  Corporations pass through tax increases to the consumer.  Reduction of government spending, allowing hard working Americans to keep more of their money and reducing government’s footprint will get inflation under control.  President Biden’s increasing taxes on Americans won’t work.