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On the Declaration of Independence

A few thoughts on the Declaration of Independence on this Fourth of July after having read much about the Revolutionary War period in recent years.

In addition to Thomas Jefferson, Benjamin Franklin, and John Adams, two other members were on the Committee of Five tasked to draft the document – Roger Sherman and Robert Livingston. It is not know what, if any, contributions Sherman and Livingston made to the document as the group met infrequently from June 10th to July 5th and kept no minutes.

Though there is some debate on this subject, Thomas Jefferson wrote the first draft of the Declaration of Independence, but only because John Adams asked him to. The other four members of the committee wanted Adams to write it. At the time, authoring the document was seen as being a relatively menial task and high profile members of the Continental Congress such as Adams much preferred oration before their peers to a writing assignment such as this. As it turned out, writing the Declaration of Independence was, by far, the most important development in Thomas Jefferson’s political career.

Jefferson borrowed liberally from others, notably the Virginia Declaration of Rights that was adopted by the Virginia Convention in June and opens with the following:

That all men are by nature equally free and independent and have certain inherent rights, of which, when they enter into a state of society, they cannot, by any compact, deprive or divest their posterity; namely, the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.

This is surprisingly similar to the Declaration of Independence:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

The most famous edit came from Benjamin Franklin who suggested changing “sacred and undeniable” to “self-evident” in the passage directly above.

Lastly, that John Adams and Thomas Jefferson both died on July 4th, 1826 – exactly 50 years after the Declaration of Independence was adopted – is pretty amazing. The two had been ill for some time and, as a testament to how important the date July 4th had become and the power of mind over the body, both held on until that day, expiring as others celebrated.

Piketty on Colbert

I’m still working my way back from the combination of a Hawaii vacation and what appears to be a common cold and, as a result of the latter, have been watching a lot of TV in recent days that included the following appearance by Capital in the Twenty First Century author Thomas Piketty on the Colbert Report the other day that was quite entertaining.

Also, skip to about the 15 minute mark in this RT News video to hear University of Oregon Economics Professor Mark Thoma discuss the controversy surrounding the alleged deficiencies (or, as some say, cherry-picking) in Pikkety’s data.

Pew Research has compiled a pretty intriguing report on what burgeoning student loan debt is doing to the finances of those young Americans who pursue higher education. There are lots of good charts packed with, sadly, unsurprising data about what a burden this debt is for those just starting out in their careers.

Student debt burdens are weighing on the economic fortunes of younger Americans, as households headed by young adults owing student debt lag far behind their peers in terms of wealth accumulation, according to a new Pew Research Center analysis of government data. About four-in-ten U.S. households (37%) headed by an adult younger than 40 currently have some student debt—the highest share on record, with the median outstanding student debt load standing at about $13,ooo.

An analysis of the recent Survey of Consumer Finances finds that households headed by a college-educated adult without any student debt obligations have about seven times the typical net worth ($64,700) of households headed by a young, college-educated adult with student debt ($8,700). And the wealth gap is also large for households headed by young adults without a bachelor’s degree: Those with no student debt have accumulated roughly nine times as much wealth as debtor households ($10,900 vs. $1,200). This is true despite the fact that debtors and non-debtors have nearly identical household incomes in each group.

I have no idea whether my college loan experience was typical at the time, but back in the early 1980s I had racked up about $7,500 in student loans when I picked up my diploma and began my first job as an engineer making $30,000 a year.

My guess is that most college graduates today who enter the workforce with college loans to service would be quite happy with a 4-to-1 ratio of annual income to debt, which makes paying this off quite manageable. That ratio is probably a lot closer to 1-to-1 today.

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Here’s the data on student loans and home ownership that’s been getting a lot of attention in the last day or so in chart form from its original source at the New York Federal Reserve.

Just in case it isn’t already obvious, many of those youngsters aged 27  to 30 who should be most able to buy property because they went to college and are making more money than they would otherwise are not doing so, in part at least, due to their student loan debt.

What’s really surprising about this is that, over the last few years, the implied home ownership rate of those with student loans has actually fallen below those who have no student loans, a group that, presumably, includes lots of college graduates who got through college with little or no debt along with those who never felt the need for higher education.

Of course, the bigger picture here is that overall home ownership amongst the younger set has fallen precipitously since the financial crisis, dropping by nearly a third, from over 30 percent to just over 20 percent.

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