To the Class of 2015 – You Chumps!

Dull, Embarrassing, Earnest and Trivial

A long, long time ago
On graduation day
You handed me your book
I signed this way

“Roses are red, my love
Violets are blue
Sugar is sweet, my love
And boy are we screwed”

– With apologies to Bobby Vinton

Image credit: Merlon Drâs

Last year at about this time, we waited for the phone to ring. Not calling were thousands of universities in need of someone to give the annual commencement speech.

Every year, we prepare an appropriate graduation speech. And every year, with the unanimous accord of America’s institutions of higher learning, we do not give it.

With six children who have gone to college, we have heard more than our share of these speeches. They are almost always dull, embarrassing, earnest and trivial.

The University of Virginia had a TV newscaster. St. John’s College had socialist philosopher Cornel West.

When socialist philosopher Cornel West is in a good mood, he actually looks vaguely threatening …

Photo credit: Evan Agostini / AP

We can’t remember the others – most likely because they had nothing memorable to say either.

Class of 2015: The Most Indebted in History

It is unlikely that we would ever be called upon to give a speech to graduating students. But if we were, we would say the following: Congratulations, Class of 2015: You chumps! The Wall Street Journal reports that you are the most indebted generation in history.

The average graduate with student debt has a little more than $35,000 of it. The whole bill for student debt this year is expected to reach $68 billion – a tenfold increase over the last 20 years.

Average graduate debt over time – 2015 produced yet another record.

That may seem like a lot of money. And big numbers get reported in the headlines along with the celebrity news. But student debt is like the foul smell of gangrene: It testifies to a deeper, inner corruption.

We are now 25 centuries after Pericles and Socrates. But today, the typical university has no more interest in learning than a rat terrier or a congressman. Our government is a disgrace to honest democracy, if there were such a thing; it is a scam and a deceit.

Rich, powerful special interests wager billions of dollars on hollow puppet candidates, knowing their investment will pay off hugely if they are successful. Our money system is an elaborate fraud, too. It steals from laborers, merchants and artisans and rewards speculators, insiders and layabouts. The entire system is sick and dysfunctional.

But you probably have no idea what we’re talking about, because you’ve just spent the last four years of your life – and paid a fortune – so you could avoid learning about it.

Total student debt per graduation year – yes, record after record …

Victims of the System

If you’ve studied the sciences or engineering (especially petroleum engineering, according to a study done by Georgetown University) maybe you’ll be able to earn enough to pay back your student debt.

But most of you have wasted your money with degrees in subjects that won’t help you understand the real world we live in or earn an extra dime in it. Many of you have spent the best years of your lives … and borrowed a fortune … to learn things that aren’t true.

History, economics, government, politics – for every useful and truthful insight you may have learned, there are probably 100 more that were buried under claptrap. There’s a big difference between the real world and the world of a college student. The real world is grittier, harder to understand, more cynical than you can imagine. And it’s big.

Not only did you learn a lot of stuff that just ain’t so – the gritty world is also not quite as eager to shower you with job offers as it once used to be. Still, a higher education does make it more likely that one will find employment. The question is only what kind of employment.

The world of academia is much smaller. There are the well-defined limits of the school… the limits of the work… limits on student conduct. There are also tests – and they are limited too. Generally, you know when the tests are coming… what they will cover… and what you have to do to succeed at them.

In real life, if there are any limits, you don’t know where they are. You never know when you’ll be tested. Often, you can be in the middle of a major test and not know it. You don’t know what you need to do to pass either.

And you surely don’t know this: You are being tested right now. You are now confronted with a problem you probably have never thought about. But it’s one that could ruin … or at least greatly impair … your entire lives.

The difference between academia and business in the computer sciences

Cartoon by Randall Munroe

You are victims of a system set up before you were born. The benefits of that system, such as they are, go to your parents and grandparents. But you have to pay for it. You’ll find it hard to keep up with the payments. As a result, it is unlikely you will be able to enjoy the material wealth and freedom of action that we, your parents, took for granted.

A Lifetime of Debts

You may know this already… but as economist Laurence Kotlikoff told the Senate Budget Committee in February, when properly accounted for, Washington has racked up more than $210 trillion of debt that you will have to pay … and pay … and pay for all your lives.

A look at various estimates of US federal unfunded liabilities. To the left the government estimate, which should be dismissed out of hand as a bald-faced lie (governments lie all the time). To the far right, the “Kotlikoff Pillar”, which has by 2012 had actually grown to $222 trillion. This kind of assumes implicitly they will actually pay. They won’t.

That is the money that will go to fund programs that were voted on before you were born. It will also pay for retirees and sick people … people who your government sent to Vietnam, Iraq and Afghanistan to get their legs blown off … people who got sweet union contracts from their city and state governments … and people who have learned to game the system.

None of these bills are for things that you had any say in. Many of them were a waste of money from the get-go. Some were a curse. But – good or bad – you’re supposed to pay for them. And that’s just the first toke …

Now, at least you are getting free of the education industry. Now, you can go out beyond the campus and take a deep breath in the real world. But watch out, you may choke on the foul air…

Cartoon by Chris Madden

Charts by: Wall Street Journal (WSJ), George Mason University

The above article originally appeared at the Diary of a Rogue Economist, written for Bonner & Partners. Bill Bonner founded Agora, Inc in 1978. It has since grown into one of the largest independent newsletter publishing companies in the world. He has also written three New York Times bestselling books, Financial Reckoning Day, Empire of Debt and Mobs, Messiahs and Markets.