Dr. Hudson on Parasitic Plunder Within the Outlaw US Empire

Dr. Michael Hudson's recent interview (transcript, video and podcast available at the link) with Ben Norton of Multipolarista covers a very large array of topics, but I want to focus on one that's specific to the Neoliberal Parasitic financial political-economy unique to the Outlaw US Empire: Student Debt, which is now at $1.75 Trillion, and is the fastest growing debt sector within the US economy. The privatization of higher education and the massive fees imposed is a reversal of historic education within the nation as the Founders all agreed that the most productive and politically aware/active human capital— citizenry—is educated, which is a moral position held by the vast majority of nations. The question at issue is the $300 Billion in Student Debt being written off. Norton puts it thusly:

“It’s not like you’re spending money; it’s just debt they’re writing off. But clearly, this is actually a tiny fraction of the amount of debt in student debt in United States.

“So what do you think about this decision by Biden to forgive a little student debt?”

IMO, it's vital to listen to Hudson's complete response as it informs us about more than just the dollars and cents of the issue, but the political- and moral-economy lying behind it:

MICHAEL HUDSON: Of all the politicians in Congress, Biden has always been the most pro-bank and pro-financial sector, largely because he comes from Delaware, which is the corporate headquarters for most companies in the United States, including the credit card companies.

Also, Biden has been the most hostile toward students. He recently characterized students who are going to college, saying, who needs a college degree? A lot of them just get in the humanities, and we really don’t need them.

So he has a kind of a visceral contempt for students. And it was Biden who made sure that in the bankruptcy law that was reformed, I think, over a decade ago, that student debt could not be wiped out from bankruptcy.

So of all the politicians, Biden has been the most hostile, personally hostile, as well as just serving the banking interests in opposing the interests of students.

And this is what really sets American social policy and economic policy more against other countries than any other policy.

Basically for hundreds of years, and still in many, many countries, Germany to China, education is free, because you want the population to be educated.

And in the United States, the whole structure of the United States politically was to divide it into school districts, because they all realized the importance of of education.

Basically, if education should be free, students shouldn’t have to run into debt to get it. And in fact, I think in Germany, not only is education free, but if you’re going to college, you’re given a stipend for living costs, so that you don’t have to take a separate job at Starbucks or some other menial job to pay your tuition.

So if education should be free, you shouldn’t run into a debt; and if you shouldn’t have run into debt in the first place, the debt should be forgiven.

That I think should be, that is, the basic moral ethic of most people. And it’s not in the United States.

And you’re right, the amount that is so-called forgiven is only a small fraction. And Biden did not even forgive the penalty fees, the late fees that have doubled and tripled the amount of student debt for many people.

So Biden is still leaving, even for the low-income people, debts that are two or three times what it costs to get education in the first place, just for the banks to get these extra fees.

So this is a slap in the face – so typical of his position, and of the Democratic Party’s position – for students.

Biden is not alone in this. The Democrats were backing him, saying, we want to make it clear to our base, the campaign donors, the donor class, that we’re going to forgive the wealthy financial sector, their carried interest charge, and make that free of the income tax, but we’re not going to favor the working class.

Because the class war is back in business.

Norton asks another question about overall household debt, but Hudson wants to add to his answer to set up context for the discussion about mortgage interest:

Well, I’m going to make one point: In Biden’s twisted mind, there’s a silver lining for keeping the student debt on the books and not canceling it.

By not canceling it, the students and the young people won’t have enough money to qualify for a mortgage. They’ll have to continue to live at home with the parents. So that actually alleviates the mortgage debt, by keeping graduate students too poor to afford to take out a mortgage, because they’ve already committed their income to the student debt.

And that $1.7 trillion you mention has now soared ahead – just in the last two years, student debt has surged ahead of credit card debt and ahead of automobile debt.

So it’s really become the fastest growing largest debt, and it’s the fastest growing debt because of all the penalties for late payments. And of course, with the Covid crisis and limited employment, you’re going to have this debt growing even more.

And also the amount of paperwork that the administration imposes on students trying to get debt relief is so great that a lot of students are simply not going to be able to get through the maze and pierce the bureaucratic shell that protects the banks and the debt. So I just want to point that out.

IMO, it's extremely important for the international audience to know about this form of Plunder that's ongoing within the Outlaw US Empire because it helps to explain the degree of Plunder being attempted outside its domain—its Super Imperialism method of global hegemony so many nations want to escape. In other words, the USA as it's presently being run isn't a model for any nation.

To reiterate, this is being done to what the future source of prosperity of the USA is supposed to rely upon. And the debt becomes an overhead cost for the entire economy as professionals—doctors, nurses, dentists, to name just those in the medical field—must earn 6 figure salaries just to pay off their student loans. Currently, the entire healthcare industry's overhead cost to GDP is 15% and rising. What that means is GDP as announced by the federal government is 30% less that stated because the healthcare industry's revenues are treated as income, not as an expense/cost as they should; so, they must be subtracted from GDP not once but twice to show their negative affect. And that's just one sector of Parasitical Neoliberalized Financialized ecomonies that's an overhead cost to Real GDP. So, when the US Government proclaims GDP to be $25 Trillion, to arrive at REAL GDP, $3.75 Trillion must first be subtracted then that $3.75 Trillion must be subtracted again for a total of $7.5 Trillion to arrive at $17.5 Trillion if REAL GDP that's only been adjusted for the Healthcare Overhead Cost. Add in the other overhead costs, and REAL GDP is closer to $12 Trillion or half of what was declared. That's the reality of what happens to a nation when their productive industry is closed down. The resulting Service Economy was touted as a great advancement for US citizens. But the reality is what occurred was the biggest con job of all time.

That reality is what Dr. Hudson's been trying to warn people about for over thirty years; and the overall system for fifty. Only now that he's entered his 80s are people finally becoming aware. Yes, informally I'm one of his students having bought the first edition of Super Imperialism back in 1974, and I've been trying to inform people for years, intensifying my efforts as the wickedness and destructive power of Neoliberalism and its Globalist twin— not to be confused with Globalization—has escalated since the USSR's demise.

As I mentioned up top, many more topics are covered in this interview; I only chose to focus on one to illustrate several points. Please share my article and the Multipolarista link widely as people globally need to be informed about what's occurring within the Outlaw US Empire because it wants to Plunder all nations in a similar manner. Pepe Escobar's latest column on what's being done to Germany is an excellent example of what the world's people must be made aware of so they can be prepared to deter similar attempts at financial aggression by the Outlaw US Empire.

And all must remember that the SMO in Ukraine is NOT the main battle as it's only one front amongst several. The Primary Struggle is to displace Outlaw US Empire global hegemony and replace it with a Multipolar World Order that's morally and lawfully based as codified by the UN Charter and its many related Treaties—all of which the vast majority of the world's nations agrees with and wants to uphold.