Though we deal mostly in data, it is always prudent to remain connected and aware of anecdotes. It may even be more so in these kinds of times, where something like conditioning can desensitize analysis. Context is always important for any data, whether market or macro.

My colleague Joe Calhoun pointed out recently a program in Maryland that has been running for several months now. Maryland SmartBuy was launched late last year with a $10 million grant to allow state residents with student debt to eliminate it in the purchase of a Maryland home. Lt. Governor Boyd Rutherford described the rationale in November 2016:

Traditionally, people in their 20s and 30s would account for a substantial share of Maryland’s first-time homebuyers, but we’ve seen a little difference in that demographic over the years, and it’s believed that student loan debt is a part of the challenge.

The idea of Maryland SmartBuy is for any citizens with student debt who can put up 5% of the purchase price as a down payment to receive up to 15% of the purchase price in government assistance extinguishing their student debt. On the surface, it sounds like something out of 2003.

There are other criteria, including that the home purchaser must remain in the house for at least five years. From the government’s perspective, it is more than altruistic aid to struggling recent grads.

“In concept, this is similar to a municipality or state providing a company with tax breaks for relocating to an opportunity zone,” said Mark Kantrowitz, publisher of Cappex.com, a college and scholarship search site. “The government knows that companies bring jobs that yield income tax revenue and newly relocated employees buy homes, appliances and housewares that yield sales tax revenue. Giving loan forgiveness is effectively rebating all or part of the recent college graduate’s income tax.”

That last part is what I think is most important here. The $10 million for Maryland SmartBuy isn’t really all that much, expected to help only around 50 of the state’s current or perhaps future residents. The question is why that state and several others like it are starting to innovate, perhaps prudently at first, for people in this situation. After all, college graduation was supposed to be something of a lifetime boost to earnings right from the get-go.

Thus, the question really answers itself. The unemployment rate nationally is 4.3%, but is it really that low in fact?

While there are many economic factors impeding homeownership for millennials — including stagnant wages, rising home prices and conservative lending — the burden of student debt is a significant hurdle.

Take way the economic deficiencies of especially “stagnant wages” and all that truly incorporates (including the participation problem where students who might normally graduate and start working instead stay in school racking up more debt because there aren’t nearly enough reasonable labor opportunities), and the burden of student debt isn’t this much of a political problem. These are the kinds of things that show up when economic deficiencies are both serious and more so prolonged.

Joe is perhaps more cynical (he might argue realistic) than I am about this program, where he wonders if it isn’t a scheme of sorts to get the state off the hook for student loans by passing them off to a hopefully sustained home equity boom. Sadly, it’s difficult to argue against that position, as governments have been known to think in just those terms.

There is a chance, however, that this is a relatively positive sign. For years, the political mainstream has denied at every chance that there is an economic problem (though this one includes two parts, one macro-economic and the other the economics of the American University). Aided by orthodox economists, it was believed without question that “stimulus” would work and that the Great “Recession” was a deep and serious but nonetheless recession.

But as time has passed and those economists have been left clinging to the unemployment rate as publicly befuddled bystanders to dangerous and growing upheaval (Why can’t the UK make up its mind about Brexit? Because the global economic problem isn’t clearly understood.). The more the so-called establishment of whatever political persuasion is made to face up to reality rather than the fantasy of the unemployment rate, the more such doubts about misguided foundational philosophies will be nurtured and supported with a view to discarding the current textbook and starting over with a correct one. It’s not a direct line or process, of course, but it has to start somewhere. The more somewheres the more likely it catches on.

Government aid is, however, a possible distraction. The trick will be for the US as Europe or anywhere else to avoid becoming Japan. If dissatisfaction leads only to greater government involvement salving symptoms, then in that direction lies only Japan; the increasing rigidity of the economic system by nature of handouts rather than economic progress. In other words, it could be positive that Maryland and other states recognize the situation for what it might be, but it can’t be left as some great unsolvable mystery “inequality” that redistribution eventually removes from the political agenda. It must be just a first step in stating the otherwise obvious.

I wrote in January 2009 that the US would never become Japan, but then we did. That isn’t a permanent condition, however, and must not become one particularly as it is a matter of choice. Political angst is good as a start. If politicians are forced to deal with part of the overall predicament, even a small one, then at the very least they can’t anymore completely deny it’s there no matter how many “signs” of wage acceleration are claimed. Step One of any recovery program is admitting you have a problem.