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American College Students: In Debt, Distracted, And Doomed

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College Classroom Distracted With Macs

Being a teacher and instructor in college is more challenging than ever. Nervous eyes take glances at iPhones, quickly minimize Facebook apps, and craft rapid text messages. Students are unbridled in their distraction. They look uncomfortable sitting still.

As a college instructor for about 4 years, I’ve become increasingly aware of fellow educators expressing frustration over “lazy” students that multitask. Some educators ban smartphones and iPads during classes. Others call out students that text in class, and ridicule them in front of peers — aiming towards social conformity.

Unfortunately, technology is serving as a scapegoat for something worse. Teachers want to limit these technological forms of distraction to heighten learning for everyone, but this classroom management strategy misses a fundamental problem. Today’s students aredistracted, but their attention problem results from atmospheric student loan debt and poverty.

The American Dream and business of higher education

Built in to our ailing economy and concrete erections is a fundamental dream: hope for a better life. It’s why many emigrate here.

While achieving that success is attained through various methods, college still serves as the number one predictor of middle class life. High school graduates make a median salary of $651. By attaining a bachelor’s degree or higher, individuals make a median salary of $1,108.

BLS Educational Attainment Statistics

For decades, the message has universally been towards greater higher educational attainment. Generations of students, employees, employers have followed this rule — requiring college educations and encouraging people to get at least a bachelor’s degree. Now, about 32% of Americans have college degrees.

Guidance counselors ask high school and college-aged students to envision anything they want to accomplish. Fundamentally, they ask, “What do you desire?” and “What would you like to do if money were no object?”

But money is an object, and we are controlled by its properties — through empowerment or restriction. These questions of freedom tease students with a reality that doesn’t exist.

Student loans restrict, constrict, and destroy choice

Many will graduate with nauseating student loan debt. Heck, there’s $1.2 trillion right now! For class of 2013 college graduates, the average student loan debt was nearly $30,000. With that amount of debt and interest rates that vary from 3.86% to 7.21%, today’s graduates don’t have the freedom that’s espoused and propagated by higher education and mainstream media.

The problem gets compounded as “student tuition now outweighs state funding at public colleges.” Now, state taxes and revenue sources are contributing to even less of the total cost for students. This all flies in the face of socialistic policies in many European countries that have highly progressive, free (tax-supported) higher education.

Americans place the burden on students as young as 17 to make educated decisions that could affect the rest of their lives. Faltering in payments and failing to swiftly pay off the debt can lead to forbearance, default, skyrocketing interest rates on credit cards, and more. Credit scores and future livelihood are at risk.

Educating the desperate, sleep-deprived, and in debt

The interest is already ticking for many before graduation. Students can feel eager to get a job, get paid, and pay off debt. But even before they graduate, they must ask themselves some serious questions:

  • Should I work during college?
  • Should I take more than a normal credit load each semester to finish faster?
  • Should I skip study abroad opportunities that cost more and may extend my time?

Previous generations had the incredible luxury of minuscule tuition rates. Between 1978 and 2013, college tuition and fees grew by an overwhelming 1,225%. Simply put, college cannot be paid for with summer jobs and temporary work.

To the financially disenfranchised, student loans fill the gap for access. But there are still students that work during college. I had two jobs while also a full-time student, and there are many like me.

Then, there are students with disabilities, children, and veterans of foreign wars (to name a few). They are challenged to keep paying utilities, attain an education, and somehow keep a roof over their children’s heads. Again, student loans often serve as a mediator to accessing education — a temporary source of funding to attain a better income and vocational future. But real dreams can subtly disappear from view as financial aid bills take precedent.

Student loans magically appear, as do depressed dreams

Like many of my readers, I’ve worked hard to turn around my financial future. When I was in debt, I felt horrible. I spent money without concern and bought things I couldn’t afford. My debt was the illusion of success.

When I finally stopped to breathe in May 2013, I realized I had dug a hole nearly $40,000 deep. I was embarrassed with what I had done, and who I’d become. I wondered what I could do to reverse this dangerous course. Trust me when I say this is a common problem for many students.

Financial aid usually was deposited into negative balances at universities and then extra amounts were distributed to the individual student’s bank account. Suddenly, bank accounts were flush with thousands of dollars — budgets seemed irrelevant.

Everyone from the in debt to the creditors to general public confuses these loan instruments for real cash. Yes, you can spend student loans however you see fit, but the consequences are punishing. Every dollar is taxed by the current loan interest rate, and is a dollar in the wrong direction: towards poverty.

The problem of poverty in college-age students

Unlike the clarion calls that suggest America is number one, we seem to have created a master plan for educational failure. Research suggests that “poverty, itself, hurts our ability to make decisions about school, finances, and life, imposing a mental burden similar to losing 13 IQ points.”

By saddling our future graduates with nearly $30,000 in average student loan debt and a future of near poverty for many, we are hurting their ability to learn in the process. Lower-income and impoverished populations constantly report lower amounts of sleep, vocational uncertainty, higher stress, and show evidence of hindered decision-making capabilities.

These are the students of today. They are trying to succeed in a cultural landscape that begged them to get educated, punished them for getting that college degree with years of debt payments, and then limited their employment options.

As the dreams fade due to financial concerns, anxiety and distractedness likely increase. The dream of “What’s your purpose?” can quickly be replaced with “Who will hire me?”

We want bright, capable graduates, but we “victim blame” them instead

America is eager to have the best workforce in the world. We are a nation that aims to be a beacon of hope and role model to developing states. And yet, we are breeding and cultivating some of the most in debt, distracted, and impoverished students.

It’s not in the interest of this country, the world, and future progeny to continue this wicked cycle of educational attainment and poverty. It’s not in the interest of creating a bright, educated populace to have them cowering in poverty for doing so. It’s not in the interest of America to impair decision making in finances and education in the process.

As teachers express frustration for their distracted students, they need to fundamentally understand the complex, systemic interplay of student loan debt. This financial instrument is inherently complex and can psychologically impair the most capable students. They might not be able to pay attention because they’re burdened by a future of poverty, student loan debt, and restricted opportunities.

Something needs to change. This system isn’t sustainable. Fortunately, a small light of hope might be on the horizon.

Post by The White House.

President Barack Obama recently announced a massive initiative to empower those from diverse financial backgrounds to receive a “free” education. His plan includes funding community college educations for those working part-time and maintaining certain educational requirements. Over the coming months this will be hotly contested and debated. But this is the first step, in what needs to be many, for those in need of an education that’s truly accessible and affordable.

Students cannot continue to shoulder most of the burden. There are powerful inequalities in income and wealth — educational opportunities shouldn’t be one of them. If we can muster the courage and wherewithal to increase taxes towards education, we may see what America is truly made of.

These Bootstraps Are Broken

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American Flag
Beautiful Red, White, and Blue! Photo: Mike Mozart/Flickr

The American, individualistic dream

America has a work hard, play hard, get rewarded mentality. People grow up to become productive members of society, and contribute to our capitalistic creation — creating and spending. Those who hustle harder are said to “make it” and achieve great financial success. For a fortunate few, that’s the path to success; for the rest of us, we’re stuck slugging it out with minimal success.

We live in a deeply individualistic society that prides independent triumphs. Popular media tends to highlight and personify movements by their individual leaders. For instance, there’s an archetype of the perfect politician. The picture is someone that came from nothing, had a janitor for a father, and still made it to become a representative, senator, and/or president. That vision stretches beyond polemics and parties. Both Elizabeth Warren (D-MS) and John Boehner (R-OH) ran and won on these models of poverty to individual achievement.

The counterculture is a collectivistic society, which are common in Colombia, Taiwan, and Venezuela. These groups support shared and “other-focused” goals. Essentially, my success is less important than the success of all of us. There are few popular archetypes for collectivistic success, but the Occupy and recent #BlackLivesMatter campaigns and protests are two terrific examples. There is not a singular representative for news media to turn to; instead, they interview the loudest voices of the collective.

What failure looks like in America

Individualism and personal triumphs directly influence how we treat those who have not achieved great financial gains. These are some words that quickly come to mind: “failure,” “lazy,” “unmotivated,” “unproductive,” and “weak.” Independent people believe that an individual’s lack of success is their fault. The message is powerful enough to become an internal message for many in America. Suddenly, it’s not just others who think negatively about financial disappointments, you may begin to believe the societal script.

When someone believes this social script, and sees a homeless person, they may be more inclined to use those powerful words of denigration. It’s their fault for being homeless, alcoholics, and/or penniless. Meanwhile, collectivistic cultures seem to see a failure in their social systems and themselves; if one falters, we all fail.

Financial independence is often inversely related with interdependence. When we become personally more affluent, the financial gains enable independence. Simply, we don’t need other people as much when wealthy. Money has a powerful distancing effect on our ability to empathize with others and see the needs of the greater collective.

“I wish I had done so much more.”

American society has a deeply ingrained version of capitalistic success: make more money, and you’re more of an achievement. Money equals worthiness in society, and this mentality means that with greater wealth you should command more attention. In a post-Citizen’s United (3) world, that’s exactly what we have. Those with greater funds can lobby, campaign, and advertise for their desired candidates more than an average citizen. Thus, their voices are louder than any one person should be. In our individualistic culture, we prop up this “freedom.”

This has deep consequences for the people that cannot and will never be given an equal chance at success. I have an acquaintance that uses an electronic wheelchair because he has a severe disability that prevents him from having much of motor control. His speech is slow and difficult, and you can see the strain on his face as he tries to share his thoughts. Conversations with him are slower, and less “productive” because he literally cannot produce speech at the same rate as most people.

It was his birthday, and I asked him what his plans were. He said he’d be going to Buffalo Wild Wings. I complimented his decision, and asked how old he’d be turning. While much of his speech is slow and challenging for him, I could tell he hesitated a bit more in telling me his age. I got sarcastic, and said, “What’s that hesitation for? You’re not going to tell me?!” He gently smiled, and then his face saddened. “I’m 63,” he responded. I said, “Happy birthday! Wow, 63! Well done.” His face stayed saddened, and I asked him what he was thinking. His words cut through me, as he said, “I wish I had done so much more. I expected I’d do so much more. I feel like I didn’t do as much as I should have.”

I held back tears (as I do writing this) for about 10 minutes, and then after he left I started crying. Here’s a man who had no choice but to be in a wheelchair because of his disability, and yet he still feels and owns society’s expectations for independent, individualistic norms. Here’s a man that feels like his lack of productivity is a failure and less than he should have made for himself.

Unshackle us from capitalistic ideals

America is entrenched in this concept of success. I’m not optimistic it’ll change very soon, if at all. But as the ideals live on, we are harming those who cannot achieve in the same ways or in the same amounts. Frankly, I’m saddened we haven’t done more to move beyond financial success being the greatest measure of achievement.

Societally, we are hurting people and could desperately benefit from more collective goals. When we tell people to pull up and tighten their bootstraps, work harder, and hustle more, we are promoting a society that punishes those less fortunate — they’re the victims of our blame.

We are socially and economically stratified more than ever. The ability for people to move social classes has been reduced into a terrible caste system of poverty. Incomes are unequal, with upper management sucking up tremendous percentages of wealth. These bootstraps are broken — there’s nothing to pick up anymore. We need to repair our society, values, and believe in some collective good and goals. Until then, most will struggle and suffer under the weight of our capitalistic system.

Outsourcing Corporate Responsibility And Taxation

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Henry Ford Corporate Responsibility
Mr and Mrs Henry Ford ride in the first Ford automobile

America and business: peanut butter and jelly

America has an illustrious, grand entrepreneurial spirit. Many generations of families started from humble beginnings to succeed. The United States was an incubator for business acumen. After the industrial revolution, we became the world leader. Amidst a growing infrastructure, companies and their entrepreneurs found success in the States.

Henry Ford was one of those genius businessman. He was responsible for designing the first moving assembly line, which greatly increased manufacturing and production time. Additionally, Ford instituted a $5-per-day income for his workers. The reasoning: He wanted his employees to be able to purchase the vehicles, decrease employee turnover, and increase the company’s bottom line, in turn.

Everybody won. He sold more cars, his employees saved and purchased more, and there was a pride in creation. This was an American company — fulfilling the American dream.

During World War II, production was reinstituted for a desperate military. An enemy stood to destroy entire races, religions, and peoples. The Allies came together to extinguish this enemy, but the pains were felt at home. Families rationed necessary foods for soldiers. People bought government bonds and women went to work. The U.S. needed its people, and they stepped up to defeat the Axis of evil. We were patriots.

Businesses were essential to a powerful rise in the middle class during the 50s and 60s. Taxation among executives and companies was high. This period is famous for 90 percent marginal tax rates in the highest income brackets. Despite the most social mobility and income equality ever, the system began to crumble.

Special interest groups, political power, and declines in average America

It all starts with special interest groups. Free market principles exalted an invisible hand that led to massive outsourcing. Much of the manufacturing industry disappeared as a consequence. We’ve lost nearly all customer service and basic technological leadership to Asian countries. It’s a rarity to find anything “Made in America.” Instead of stopping and correcting this course, America and its people have held steady — buying, consuming, and destroying as much as they can. Patriotism and pride in country be damned.

These economic principles, which largely took America by storm in the 80s, were lauded by the Reagan administration. Swift cuts to taxes were made for everyone, but they mostly benefited the richest of our population. Almost immediately, an increase in income inequality, social stratification, imprisonment, and use of tax havens increased.

Each time we’ve lost another layer of pride and power in America, corporate executives have argued that they are creating jobs, cutting inefficiencies, and raising shareholder value. We can’t fall for these tired logical fallacies. Jobs have been created elsewhere and people are paid less than ever. Wages are stagnating for most, as executives get rich. We’re stuck in the twilight zone of corporate disrespect, political power, lobbying groups, and massive outsourcing of everything. It’s dystopian in the powerlessness of average people. The last thing to go: corporate headquarters and revenue.

How to avoid taxation and book record profits

In the past, tax havens were simply “offshore,” Caribbean or Mediterranean islands. Rich doctors, businessmen, and criminals used these countries to store untraced funds. The money would be protected from extradition, taxation, and/or criminal prosecution. But as businesses grew with the new, global economy, tax practices changed in step.

Yet again, the start was in the 80s. Apple — yes, the iPhone and iPad maker — pioneered a strategy to avoid federal taxes “legally.” This gets complicated quickly. Essentially, Apple setup subsidiary corporations in other countries and booked intellectual property sales from those international locations. Income then sidestepped the higher-tax policies in America for lower-tax zones. This magical strategy is called, the “double Irish arrangement.”

Named for its home location, Apple set up a location in Ireland, where corporate taxes are 0%. Then, these new funds avoided billions of dollars in taxation and could still be reported as revenue and profit. This opened the floodgates for copycat companies to do the same (e.g., Facebook, General Electric, and Google).

By harnessing the power of this tax-dodging trick, some companies whittled down their tax liability to nothing. We’re talking about multibillion dollar profits — untaxed. More importantly, all of those loopholes lead to severe federal tax revenue shortages, despite record-breaking profits. Our people, infrastructure, and future are in the balance.

The regular American, a patriot

Warren Buffett is famous for saying that if you’re born as an American, you’ve already lucked out. This is still the land of opportunity. And frankly, I couldn’t agree more. The U.S. is still an incredible place. I have a lot of pride and feel humble for my opportunities. I couldn’t have done it without this place.

Over the last couple years, I’ve built a solid side income as a writer and entered a doctoral program. This is the life I want. I’ve carved out my niche. I feel fortunate for the privilege to be given room to explore and succeed. The financial successes also increased my tax burden.

My company, Frugaling, is based in America. I don’t have an LLC or formal corporation, but it’s my business. At the end of every year, I have to account for this revenue through a Schedule C form and self-employment taxes. Last week, I explained that I had begun to prepare for this accounting challenge, as self-employment taxes are about 30% of revenue. This is because medicare, medicaid, and social security aren’t withheld. But I’m happy to contribute and do my part.

I owe it to the place where I found success. I want others to have the opportunity to excel, as well. America is empty without a cyclical, contributing populace. What goes around comes around. I pay my taxes. Why don’t companies?

Warning! We’ve crossed the tipping point

Today, the largest corporation yet, Medtronic, filed to leave America. We’re talking about a pure formality that will make more tax revenue leave America. The medical device manufacturer just purchased another company — Covidien — that is incorporated in Ireland. Medtronic will switch to that legal address. BusinessWeek reported that this is becoming increasingly popular:

Minneapolis-based Medtronic joins some 44 American companies that have reincorporated abroad or struck plans to do so, including 14 in a recent wave of moves that began in 2012. Earlier this year, Pfizer Inc., the largest U.S. drugmaker, briefly proposed taking a U.K. address, a move that might have cut its tax bills by as much as $1 billion a year…Without a change in law, a congressional panel estimated last month, future deals will cost the U.S. $19.5 billion in tax revenue over the next 10 years.

For shareholders, this is wonderful news. Those tax savings can be directed to share buybacks, increased dividends, greater research pipelines, and better compensation for employees. But meanwhile, Americans will suffer. See, we are stakeholders in a way. We have a stake in what a company does or doesn’t do. Now that companies are fleeing the states in search for individual gain, at the cost of the whole, we must realize that the last pillar of corporate responsibility and patriotism is about to fall. As this disintegrates, and taxation revenue crumbles, so will our country.

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