With the student protests in Québec now approaching their fourth month, it seems that there have been very few reasonable proposals from either side as to how to address this issue in a way that would satisfy the economic concerns of the administration and the social concerns of the protesters (although, this isn’t to say that there aren’t any at all, here is one I quite like). I think I have come up with a solution that does just that, in a way that’s economically sound and socially just.
Much of the debate has been people yelling past each other – with students and prominent social activists talking about social justice and equity issues and the supporters of the government heavily focused on economic issues. From the pundits, there is plenty of rhetoric with some foolishly refusing to denounce violence (translation here) countered by poorly written Horatian satire (Kay is a better writer than this column shows) and morally and intellectually bankrupt diatribes from self-important pseudo-intellectuals. For those of us on the sidelines, it’s frustrating to watch.
So, I think I’ve got a solution that should satisfy both sides of this debate – it’s not an extra burden to the tax payer, yet it also allows for a strong commitment to the education of the next generation. This solution is remarkably simple and straightforward, very easy to implement and should be very uncontroversial to a point that it might even seem mundane. I’m surprised that nobody else has even mentioned this, honestly.
Here it is, the modest proposal in one sentence:
The government should cease funding all non-life saving, elective surgery for anyone born before 1975, and use the savings to fund tuition.
This means that surgeries like hip and knee replacements, cataract surgery, tendon repair, vasectomies and tubal ligations would be 100% covered by the patient and 0% covered by health care for anyone born before 1975. Not only would this save the province a fairly substantial amount of money, it would also very likely lower the waiting lists for people who are willing to pay for this surgery out of pocket.
This should address the two key points that both sides are using to talk past each other:
1. Does this make economic sense?
Since we’re being told that we cannot afford to subsidize the tuition of students, then before we cut this spending, it would be irresponsible of us to not look at other areas where we can reduce spending first. Why cut spending somewhere that actually gives a good return on investment while continue to spend in an area that doesn’t? It should be patently obvious which gives the better ROI when comparing investing in education vs geriatric surgery. There is plenty of evidence showing strong correlation between higher education and higher GDP. Higher educated societies also have a higher quality of life – education levels are considered a key metric for measuring quality of life. I think this shows quite conclusively that, when looking purely at the issue economically, funding education is a far better investment than non life-saving surgery.
Most students today incur significant amount of personal debt under the friendly euphemism ‘Student Loan’, as if this is some sort of gentle loan that is less serious than a mortgage or other loan. In fact, it’s the exact opposite. Student loans are not absolvable for at least 7 years after they have left school. The idea that students also get some sort of preferred rate is also not true, my student loans were at least 2 points above prime, despite the fact that I had excellent credit. When I complained to the branch manager about it, she was indignant and stated that student loans were high risk. In reality, they’re federally guaranteed, and have been since 1964 with a brief period between 1995 and 2000 where there was a ‘shared risk’ between the banks and the federal government. So, why is this a bad thing? Shouldn’t students ‘pay’ for the benefit of getting a good education? Definitely, and they will – as university graduates, they become the some of the highest paid people in the province on average – since we have a progressive tax system here, they also become some of the biggest tax payers, shouldering more than their share of taxes.
While this might be a compelling reason on social justice reasons for greater investment in education, it’s not a compelling economic one. What is a compelling argument is the damage that massive debt does to innovation and entrepreneurship. Young graduates are some of the best people to start new small businesses – the best job creators and tax paying segment in our society. They have fresh ideas, are on the bleeding edge of technology use and aren’t yet discouraged by the corporate world they will soon have to face full on. However, when students are burdened with debt, they are financially crippled and it becomes virtually impossible for them to raise capital necessary to get their ideas to market without handing over control (both financial and creative) to vulture capitalists. This kills innovation, new ideas and job creation before it even has a chance to take off.
2. Is this ‘fair’ or socially just?
I can already hear the complaints from the old people in the back who are complaining that this is unjust.
“I’ve paid my taxes for X number of years! I deserve to have this covered as a contributing member of society.”
So, let’s investigate this claim that they have paid into the system, and we’ll clearly see that this is false. People born before 1975 have elected the worst deficit spending governments in Canadian history. They lived well off of huge government debt that will have to be repaid by the students about to graduate today (they also did this while having their own tuition heavily subsidized).
Please don’t use the excuse that “I never voted for these governments! I voted NDP, Green or Rhino Party!” as if that would somehow exempt you from this. We have a clear legal precedent in Canada in which everyone who benefited from the collective good should also be liable for the costs. All of you pre-75ers reaped the benefits of deficit spending, it’s only fair that you share the consequences of it.
Some might notice that 1975 also includes people who voted in the 1993 federal election (Jean Chretien’s first term as prime minister), which was a sound defeat for the fiscally irresponsible Tories before them. Now, while this Liberal government actually reduced government spending substantially, (eventually balancing the books by their second term) during this term they also robbed unemployment insurance surpluses to eventually achieve a balanced budget. So, sorry this term doesn’t count. Also, with the way the current government is spending, it’s possible that we could bump this to anyone eligible to vote in 2011, making that year up to anyone born before 1993.
There are also many costs that are yet to be calculated. Such the huge environmental clean-ups like the water in the Great Lakes or the environmental (and long term economic) disaster in the Alberta Tar sands. Or the yet unknown consequences of climate change, when we have now known for decades that we could and should do something about it, but failed to actually live up to our responsibility (climate change deniers, don’t even bother commenting).
Young people going to school today face a difficult future ahead of them. They’re likely going to be the first generation of Canadians who are not going to be better off than their parents. They will be burdened with our horrible credit rating, massive federal and provincial debts, the near-bankrupt pension fund supporting the baby-boomers (which will likely not survive long enough to support them when they retire), massive environmental clean-ups and huge costs to repair long neglected and poorly maintained infrastructure.
If they do managed to get a university degree, they will earn, on average $52,000 a year — the top 22% of income earners in the province — which puts them in the demographic that pays 74% of the income taxes in Quebec. So, they will definitely pay ‘their fair share’ once they graduate, low or free tuition is definitely not a free ride or a handout. In short, telling students that while they earn the education necessary to pay for our decades of deficit spending, they also have to incur massive amounts of private debt is not only unfair, but it is unethical. Funding their education is the very least we can do.
NOTE: Before I get accused of being one of those ‘freeloaders’ who just wants their lunch paid for: I was born in 1971, and it took me 10 years to pay off my student loans — and my tuition was less than 1/2 of what the tuition will be after this next increase. So, you’re right, just like everyone else born before 1975, I am a freeloader. However, I don’t want a free lunch, I think it’s time that we pay the bill instead of passing it down to the next generation.