Bill Gross weighs in on the college debate

[MichaelTurner]

Originally Posted by jared

Gross presents a good argument, however, it is too late. You see, the US already has a $15T deficit among 150M tax paying families. This comes to $100,000 per family. This is only possible with an average interest rate of 2%. For the USG to hire millions more would add trillions more to the debt and raise interest rates. Unless default is in the cards, the new CCC won't happen.

It won't happen, but only because it's politically intractable. Fiscally, it would be a wise investment. Adding e.g. 2 million jobs "shovel ready" jobs at $50,000 a piece, would cost (wait for it) $0.1T/year. A drop in the bucket compared to what we're spending elsewhere.

This is before we take into account the cost of food stamps, unemployment, welfare, etc. and deadweight loss on the economy from having double-digit unemployment. It would spark demand and improve our crumbling infrastructure.