Sound familiar? It's exactly the sort of backwards thinking that, to coin a phrase, "got us into this mess." Politicians (most, but not all, Democrats) noticed that homeownership was associated with a number of social goods -- steady employment, social engagement, high test scores for children -- and decided that the homes were causing the other benefits. Make home ownership more broadly available by making mortgages easier to get, ran the logic, and everyone would benefit.
We know how that turned out. But the Democrats learned all the wrong lessons from that debacle -- fairy tales that they may actually believe about greedy Wall Street and rich Republicans. So now we are busy repeating our folly, inflating what Glenn Harlan Reynolds calls the "higher education bubble." "College is getting more expensive, a lot more expensive," Reynolds said. "At an annual growth rate of 7.4 percent a year, tuition has vastly outstripped the consumer price index of 3.8 percent. It's skyrocketed past spiraling health care increases of 5.8 percent. Even the housing bubble at its runaway peak pales in comparison."
Colleges are happy to pocket the windfall while students are being sabotaged. Half of all college graduates cannot find jobs. While homeowners could walk away from an underwater mortgage, there is no escape from student loan debt. Student loans, now in excess of $1 trillion, outstrip car loans and credit card debt, and, unlike those obligations, which are declining, continue to increase because the government is offering what seems to the unwary like a gift.
Just as the housing bubble collapse wound up increasing, rather than reducing inequality, the foolish expansion of student loan debt may hobble an entire generation with a crippling burden. Perhaps the new debtors can console themselves, as they postpone marriage and move in with their parents, that Mr. Obama "cared about the problems of people like me."
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