Cancelling student debt is essentially printing money
mleverything.substack.com
mleverything.substack.com
I am all in for a more streamlined and lean State, but until that time, I think that Raytheon stock holders and Wall Street can share a bit of the current pie with the People
maybe. If it becomes normalized, it would alter the cost-benefit dynamic in degrees even more and not place as much pressure on pursuing a more valuable degrees. Hopefully this is a one-and-done and we can be more creative going forward, like providing more grants for deeper, more fundamental degrees like chemistry, math, computer engineering, manufacturing, etc.
> same can be said about financial sector bailouts, agricultural subsides
agree. we need to let companies properly decompose. It unintuitively creates more growth, and new companies are created from the ashes. Injecting old companies with formaldehyde creates sclerotic monoliths.
I hate to stomp on your hope, but this is a late-stage step on the road to 'free' public K-16 in the US. Graduate degrees are already needed to provide the signal you could generate 40 years ago with undergrad. As to actual learning apart from the signal of a degree, the bulk of undergraduate educations, now that there is such a bulk, will provide progressively less value compared to top institutions where students are ready to learn, just as most public schools fall behind the well-known magnet schools that we all wish were more than exceptions to the rule.
Honest question, are they? At least as someone hiring for software engineering BS in CS is generally something I look for in a junior level candidate (I rarely pay attention to the education of a candidate with a few years under their belt), but no matter the experience level a masters has never added much, barring some really interesting projects.
Other fields might be different, but I don't think I'm the exception for software engineering.
> like chemistry, math, computer engineering, manufacturing, etc.
Good.
Some of us would prefer that the point of college is a better educated populace, not a better educated avarice. Let's keep the greed at bay.
> Let's keep the greed at bay.
Tell that to the university endowments.
The two have nothing to do with each other.
I am against the financial sector bailouts as well, but it's important to note that the 2008 $700 billion bailouts were paid back
>> Early estimates for the bailout's risk cost were as much as $700 billion; however, TARP recovered $441.7 billion from $426.4 billion invested, earning a $15.3 billion profit or an annualized rate of return of 0.6%, and perhaps a loss when adjusted for inflation.[3]
> I am all in for a more streamlined and lean State, but until that time, I think that Raytheon stock holders and Wall Street can share a bit of the current pie with the People
The people that will pay is taxpayers and consumers through higher prices. I'm fairly sure Wall Street will be fine
https://en.wikipedia.org/wiki/Emergency_Economic_Stabilizati...
I’m far from an expert, but isn’t the assumption that the cost of cancelling these loans will also be paid back indirectly now that loan holders have less of a financial burden?
It feels to me like giving people lower levels of debt, access to affordable education, and a social safety net to allow risk taking would improve our economy overall. Of course this isn’t what the government has provided at the moment.
> It feels to me like giving people lower levels of debt, access to affordable education, and a social safety net to allow risk taking would improve our economy overall. Of course this isn’t what the government has provided at the moment.
Right. Student loan forgiveness does nothing about lowering cost of education. If anything it doubles down as people will be more willing to borrow more thinking they will get it forgiven. It also discourages others to pay back their loans. The reason schools are crazy expensive because we encourage students to take out uneconomical loans. Basically a no questions asked loan given to any 18 year old attending an accredited school. Private lenders are more discerning and will consider the cost, major and profile of the student and offer a lower rate than the federal rate for borrowers with strong profiles (e.g. going to med school vs majoring in pottery at NYU)
Exactly.
Better yet: send every adult 10k, no qualifying criteria required. For those that pay taxes, they can think of it as a tax cut. For those that have student debt, they can think of it as debt being cancelled. For everyone else, they can think of it as cash. Or as a "dividend" a la Andrew Yang.
Not saying it's a great idea, but it makes more sense than this govt unintended consequece du jour.
https://mitsloan.mit.edu/ideas-made-to-matter/heres-how-much...
Who paid that?
>The people that will pay is taxpayers and consumers through higher prices.
Are these the same taxpayers that now can't even afford cheaper prices because of the students debts or the debts of their children?
The commonality is the politicians who hand out that money. Politicians who operate on behalf of their donor class and not on behalf of the American people.
3% of GDP is not unreasonable for US military spending. US GDP is estimated to be around $25-$26 trillion for 2022.
What's outrageous are countries in Europe spending sub 2% of GDP on defense and relying on the US to defend Europe from Russia.
Nitpick: the world's only good superpower. China is a superpower too, but an evil one.
The Middle East begs to differ.
You could spend 5% of your GDP in scrap and consultancy contracts and would be worse than a country spending 1% in good weapons.
By your logic Russia should have won already.
The speaker of the house herself affirmed recently that the president does not have the constitutional power to do this, and the court will likely agree. The president is using 9/11 educational legislation signed by Bush that focused on military and disaster victims for this blanket debt cancelation. It is a dramatic expansion of power that was never intended.
However, the court cannot consider the question unless someone can show actual harm by the president's action, and thus prove standing.
That standing may be denied in the trial court, but after a raft of appeals, SCOTUS may grant standing and remand. Then the trial begins, and we will have another set of appeals before us (and perhaps an injunction) when the trial concludes.
It will be a long and bitter road, strewn with disappointment, either way.
That likely narrows the list down to very few.
They would likely be silently blacklisted and would need to align with a party to survive.
I guess they could be independently wealthy, however, that narrows the list even further.
The effort to find standing will devolve to a "Citizens for Fiscally Responsible Government" group with no direct ties to the Republican party.
Whose going to take this to court?
The president?
What math are you using? From wiki: "F-35 program's expected acquisition costs to $406.5 billion, with total lifetime cost (i.e., to 2070) to $1.5 trillion in then-year dollars which also includes operations and maintenance" [0] whereas there is currently $1.75 trillion student loan debt [1].
1.5 trillion in 2070 dollars is less than 1.75 trillion in 2022 dollars and the latter doesn't include the next 50 years of higher education funding.
[0]: https://en.wikipedia.org/wiki/Lockheed_Martin_F-35_Lightning...
[1]: https://www.nerdwallet.com/article/loans/student-loans/stude....
Plus, the OC was definitely talking about the student loan forgiveness that's actually been approved. Which is a measly $300bn in comparison.
What were the estimates of costs at beginning of the F-35 program for the year 2022? I bet less than 406.5 billion dollars.
I think you are greatly underestimating or at least greatly under-appreciating the role of USA defense on the world stage. Why do you think EU and other USA allies can get away with spending so little on defense? They are basically outsourcing defense and weapons development to us. F-35 development went way over budget, but actually making one now is relatively cheap and will continue to get cheaper - cheap enough that an ally like Israel could purchase a dozen as a part of their smaller defense budget in the coming decades like they currently do with F-16s. Why is the global shipping industry so much lower risk that it was in decades past? The US Navy protecting shipping lanes is largely to thank.
I'm sure US DoD is worthy of many of its criticisms, including high budget, but it irks me to see the baby so eagerly thrown out with the bathwater at every opportunity.
No, I enjoy not being invaded
The entire post-WWII world order has been to their benefit at our expense.
I’d rather my tax dollars go towards state run health insurance than protecting Germany from Russian shenanigans.
The USD is the world’s reserve currency and the US has benefitted enormously from 75 years of peace in Europe.
The EU has certainly benefited from US protection but even more so has the US, US companies (but sadly not all US citizens), from the US’s position as absolute top dog in the world.
Also the problems with the health care system are unrelated to the cost of the military.
> I'm sure US DoD is worthy of many of its criticisms, including high budget,
That's precisely all that's been criticized here. The high budget of the DoD.
At least for me, the scare quotes around "defense" additionally imply that the US isn't really getting anything defense-related in return for the high budget - as if the money is just being wasted with no ROI.
https://www.statista.com/statistics/262742/countries-with-th...
And where is the welfare return? It is a transfer of wealth towards a lucky and already privileged subset of the population, paid for by present and future taxpayers, many of whom are underprivileged.
The idea of welfare is wealth transfer from the more to the less privileged. But this seems like the opposite.
You might as well have just said that. How about we say all the things you listed are bad and we should fight against all of them, and not justify any based on the others?
"Two wrongs don't make a right" - every parent to their children, basically.
Seems like this is the stuff that the economy is built on. The inclusion of "avocado toast" makes me think I know exactly where this guy stands on basically every political issue without looking any deeper into him, though.
> Or it could inflate asset prices as we’ve seen with the $12 trillion from Covid relief.
I'm not an economist (thank God), but there's no way that's what happened here. Asset prices increased due to restricted supply. There's no way that lumber prices tripled in mid 2020 due to "covid relief funds".
Besides, a ton of people were suddenly able to work from home and couldn't go out for fun. That meant saving huge amounts on gas and wear and tear on vehicles (or public transportation) and no more fun nights out to spend money on.
In reality COVID stimulus didn't help (inflation specifically), but you can't just look to individual stimulus to see it, you also have to look at all the stimulus targeting businesses. Even then it's just one small factor. Supply shocks, Russia, sudden changes in consumer behavior, low interest rates and more all play in. It's not a simple problem with a single cause, but it's more satisfying to point and blame one factor some else is responsible for, so most discourse on the topic, even from those we'd hope would know better since they are in charge of fixing it, is worthless.
You aren’t against the government printing money. You are against why they are printing money.
It makes sense to print money and spend that money into the economy to accomplish a task if the result of that has a positive ROI.
Can we debate the ROI of the activity, rather than “inflation bad”, “printing money bad” or “politician bad”?
Using monetary policy as your point of disagreement is intellectually dishonest when your actual problem is with what the government is spending money on… and not the fact that the government is spending money at all.
It also muddies the water because it's not explicit how much it will cost, who will bear the burden not to mention no congressional oversight. This isn't like proposing a budget to build bridges. The is unilateral action by one person with unknown consequences.
In the US when the government spends on things money it comes from taxes or is borrowed. The Treasury doesn't print money.
Printing money is done by the Federal Reserve, but it is not done to finance general expenditures (bonds are different).
That's just flatly untrue. This is one of HN's favorite misunderstandings about governments. If this were true, why would governments bother raising taxes or issuing bonds?
I'm sorry but this is complete, total and utter nonsense.
The government is supposed to work by collecting taxes and then spending these taxpayers dollars.
If the government wants to invest in something (like big infrastructure stuff), it's supposed to borrow money (for example by emitting bonds) and then pay that money back (even under keynesianism).
The European Central Bank's mandate specifically says that the ECB's role is to keep inflation in check.
Nowhere is it explained that any government spending can be realized by the government(s) printing money at will.
Governments in the general sense are capable of not balancing these items, even if it’s not recommended and sometimes not politically viable. In practice, this is actually the current state of the USA via QE, although I’d argue that doesn’t make QE evil but rather indicates there are some situations where printing money isn’t too bad.
Playing my own critic though: printing money is a regressive tax. It causes the same percent inflation for every person's money. The reduced purchasing power hurts lower classes more.
Not by printing? Where are those taxpayers dollars coming from before they're collected, if they were never printed? Once printed, how is new money moved into circulation? Answer:
The government prints money, which it then distributes into the economy via government spending. It then collects taxes to remove money from circulation.
Your suggestion is the common understanding, but that leaves no room for how the whole cycle starts before money has been printed, and seems to reverse the order of events.
Also the government does not distribute the money via government spending. The Federal Reserve distributes the money and it can do so even without the government by purchasing bonds from the private sector.
Your suggestion is actually the common misunderstanding and it reverses the responsibilities of various institutions in such a way that most people feel they are subjects of their government.
Small update: collecting taxes doesn't remove money from circulation either. Ay-yi-yi, people are misinformed.
According to some economists. Not all economists agree with this.
> Can we debate the ROI of the activity, rather than “inflation bad”, “printing money bad” or “politician bad”?
Essentially you are asking everybody to accept the debated point that you are making (Modern Monetary Theory) and then argue for their position while accepting yours as fact.
I disagree that government must print money in order to spend. We could use a system of private banks and physical backing as a medium of exchange instead of government money. Some countries transact trade in the US dollar. Are those mereley vassal states of the USA?
But, I think $10k or $20k is not enough. I think they should have looked at how much the cost of college has increased over the past 2+ decades and forgiven that percentage from every student loan.
Then they should fix the cause of tuition inflation by getting rid of the federal student loan program.
Your assumption is they were trying to fix a problem with tuition costs. They aren't. Fix the root problem to stop the bleeding and then treat the existing injuries.
Stopping the bleeding is not fixing the root problem. You stop the bleeding so that the victim doesn't bleed out while the paramedics arrive and can take them to a hospital.
https://www.mayoclinic.org/first-aid/first-aid-severe-bleedi...
What's happening reminds me of Trump's throwing paper towels to hurricane victims - a misguidedly symbolic photo op that accomplishes nothing but distracts us all.
https://www.nbcnews.com/politics/politics-news/trump-defends...
This would be unfair to students who were frugal and chose a 20k-25k/yr COA state school with the assumption that their debt must be repaid.
Going to college is an investment that you ideally should plan for and weigh the benefits of the education vs the cost. If you don't think it's worth the 20-25k/yr COA at state schools (or whatever ridiculous amount at private schools) than just don't go. It absolutely is, but okay. This is an incentive to make good choices about college and be educated and productive post-college. But cancelling more debt would remove this positive externality.
Don't go to college and you'll be drowned in the flood of third world labor that has been allowed to invade the country. This is not the 1950's. You aren't going to graduate high school and support a family as a travelling shoe salesman. You're going to end up working next to Jorge in some dead end minimum wage job and spending most of your money on rent.
Saying that it's a choice is a form of gaslighting. For most people, not going means a life of brutal wage slavery and exploitation. I guess you would say it's a choice to live as well?
Also, there are plenty of alternatives: trade schools, bootcamps, etc.
Finally, why introduce stereotypes? This is not the 1950s, you can't and shouldn't say stupid shit like that anymore.
You're the one speaking like we're living in another time. A time where people were freer and there was more economic opportunity. 40% of Americans don't even have $1000 in savings. It's a wildly dysfunctional and oppressive system and you're engaging in gaslighting because you benefit from it.
I had some crap jobs sure, but i got the experience to move up and on. Call centers, warehouse jobs, tech support - ended up a system administrator without any class work or even any certs.
There is nothing wrong with the blue collar jobs either, they tend to make more money after 4 years experience than a recent college grad. And lots of them end up being their own boss!
I honestly don’t get why we have so little empathy. Just because it sucked for me, I want to suck it for other people as well? Crabs in a buckets mentality is utterly harmful to everybody except those outside that bucket wanting to eat us.
Look, my comment was about
(1) a possible explanation for the administration to choose a 10k flat vs. the proposed percentage based structure by the parent comment and
(2) identifying that having college cost a lot of money is an incentive that forces people to use it in order to get a job that makes a lot of money and (theoretically) contribute to the national productivity, which is good for the government
Nobody wants it to suck for other people. There are X costs involved in paying staff, you pay Y for tuition and the state government subsidies Z, maybe like half. Getting into college is competitive; it's a scarce resource that you outcompeted someone else for.
Snce you had to compete to get into that crab bucket, what about empathy for the people you excluded by doing this and, say, left out for the sharks. Easy to have empathy for the maybe 30% who actually go to a 4y university.
College should be free, available to all.
Decrease the administrative bloat, fix the professor's pay, etc.
The way it is now, overwhelmingly the well-off are the ones able to attend the university of their choice, thus getting the job of their choice.
The gatekeeping by Ivy League schools should be abolishee.
That would fix the wealth-captivation/gatekeeping, and help those excluded from 4 year universities.
At which point colleges will raise tuition by that same amount.
The problem with this is that it then returns college to being something that only those already financially well-off have the opportunity to take advantage of.
What's needed is either a more nuanced approach, or a more radical one, simply funding the colleges directly so that they don't have to charge tuition.
Or nationalize some of those state schools and make school free.
If we nationalized some good schools and made them free, it should drive down the prices of the others, right?
If you let your educational institutions squeeze every last penny of your future well-educated doesn't that also limit your countries ability to innovate?
If my paycheck would go entirely towards rent and debt payments, I for sure would look for a high paying corporate job instead of startup or freelance work.
What are you talking about? For profit education is nearly dead - ITT, etc., Do you mean private schools?
You're correct that schools organized as for-profit business entities have a bad name and are dying back.
But even state schools and universities that are nonprofits on paper can conduct themselves in ways that are profit-driven in practice.
It's kind of like the Hollywood accounting practices where a movie that has brought in an enormous box-office haul is treated as only breaking even on paper. As long as the numbers line up right, you can be a "nonprofit" where salary and perks for top figures are exorbitant.
http://www.nytimes.com/2015/04/05/opinion/sunday/the-real-re... (https://archive.ph/Ju3ro)
The only thing that matters is goods and services. People getting stuff they want or need, the rest is accounting. So then:
When the government "prints money" (which happens a LOT) watch who it's going TO. If it's e.g. these larger biz PPP loans, probably not helpful because the rich get richer. Student loans? Will probably go to real people buying real things, so probably a better idea. Still might be long term problems eventually, but historically -- no one (especially economists) has ever actually been remotely accurate in being able to predict this.
Myself: Was in college, left, did my own thing, becoming successful, now am paying taxes for everyone else who is getting bailed out. I already have state income tax to pay as well, and with housing prices and inflation being insane, saving for a down payment is miserable enough!
Everyone else in college: Often didn't know what they were doing, get free money that myself and others are paying for. Most people in my college weren't there for STEM.
Anyone who paid off their debt within the last few years: Screw you. Didn't matter if you were eating ramen to pay off that $10K for a few years, we just took care of it!
Future generations: Where is my bailout? They were so lucky a few years ago!
Colleges: Let's raise prices to get another bailout! In fact, let's repeat the cycle, feed the fire, and hope the government just starts handing out free universal college money every year! Then, we'll just adjust prices higher to compensate, the real college price will be basically the same, but our margins will be bigger!
It's bonkers. I don't like the debt, but this is a terrible plan. Why not (for example), just declare no federal income tax on a single cent of earned income for people making under $100K a year who have student loans and pay promptly? Or, let's say the degree I took has not been working out and I'm not getting jobs, maybe after a certain point I can declare bankruptcy on that debt. There are plenty of other methods to help.
That's perhaps my biggest problem with the bailout proposal. It targets the symptoms, not the cause, which makes it a de-facto Band-Aid on cancer.
Tuition increases have been ticking at around 2x-3x inflation for the past 25 years. It's not like the 70s or 80s when you could work during the summer and cover most of your expenses and then possibly take out a modest loan to cover the shortfall.
There ultimately needs to be some form of price control on tuition. Otherwise it just turns into, "well elite schools charge X so if we don't charge X*.95 people will think this is a school for rejects" since the only real signals in the market place are the price, average standardized test scores, and "prestige." Maybe in exchange for getting government grants and loans, they have to negotiate tuition rates with the federal government. They would be in a much better position to collectively bargain on behalf of the students, since the only option now is to either withdraw or grin and take it when they decide to hike the tuition.
Employment outcomes and default rates could be used in these negotiations. Lower than average employment prospects should be tied to lower than average tuition. Also, the overhead rates could be considered. This would put pressure on universities to curtail the sprawling administrative industrial complex.
<quote>
I’ve said it before and I’ll say it again: Not every program has to be for everybody. People with apartments pay for first time homeowner benefits. Young people pay for Medicare for our seniors. People who take public transit pay for car infrastructure.
Maybe student loan forgiveness doesn’t impact you. That doesn’t make it bad. I am sure there are certainly other things that student loan borrowers’ taxes pay for. We can do good things and reject the scarcity mindset that says doing something good for someone else comes at the cost of something for ourselves.
An example: If a person is blessed enough to be in a position to have paid off their loans, maybe they have a home now and benefitted from first time homeowners programs that people crushed by student loans help subsidize when they aren’t able to buy a home because of student debt. It all comes around. It’s okay. We can support things we won’t directly benefit from.
</quote>
https://news-papers.co.uk/news/38704/advocating-for-student-...
- "Young people pay for Medicare for our seniors."
Medicare is literally going bankrupt within the next decade, as is Social Security. When it was founded, there were 30 young people for every old person. Now it is 3-1, and going down still from declining birthrates. There is no guarantee any young person paying in right now will ever see a penny when they are old, unless you expect the government to print money for the next half a century.
- "If a person is blessed enough to be in a position to have paid off their loans, maybe they have a home now"
Wishful thinking. I have paid off my loans, have no home, and getting home ownership right now is horrible even with first time homeowners programs. There are plenty of people trapped paying off their debt, but can't afford a home, especially with current prices.
That's what she means and kind of what she literally said.
There are people who are paying into a system they will see no benefit from.
I currently have very little confidence long-term that this will happen. Right now, I have 0% confidence in Social Security and Medicare existing when I am old. 0%. That money is, as far as I know, going away and I'm never seeing it again. The statistics back me up on this.
Furthermore, this bailout, it will absolutely be repeated. There is never a one-time bailout that doesn't address the underlying cause without happening again in politics.
> An example: If a person is blessed enough to be in a position to have paid off their loans, ...
This is the perfect kind of framing for her argument. Someone who paid off their loans didn't work hard, they didn't make a coherent plan and execute it, they didn't sacrifice, they were just "blessed". A benevolent god smiled upon them and their debt disappeared!
You've introduced several hoops to jump through. And in order to make sure no one is cheating, you're going to need people to investigate. You've basically created a shadow welfare system. Because that's going to require people and training. The government will have to pay people to make sure the "wrong" people don't get money. You think a one-time payment of $10k to $20k is bad but want to replace it with yearly $50k payments. Every employee will have to find 3 to 5 fraudulent claims per year to just break even.
And why should you only get to discharge the debt if you don't get a job? What if you can't get jobs in the field your degree is mostly related to? If you get a job in an unrelated field, we could argue that your degree was also "meaningless" in that fashion. Although whether or not we should be treating college as "white collar vocational training" is another story.
You are paying taxes because that's your dues for living in the USA. You get things you want, I get things I want, they get things they want, and they're not all the same things. But through pooling our money and leveraging collective bargaining, we can make all of these things not only cheaper, but possible.
This is not built to be a one-time bailout. This is going to need to be, to be "fair," a bailout of past people who paid in; and a bailout of future generations who will look back to it and complain about it.
We've seen whole cities become apocalyptic wastelands due to unfathomable economic crises.
I firmly believe no one can make sense of this unprincipled chaos. We call ourselves a capitalist country, but goods produced by a communist country dominate our market. Wtf? Just one of the many naked paradoxes that people seem to ignore and continue on like everything is normal. We're beyond the point of making sense of this mess. None of it makes sense, none of it fair. It's organized anarchy.
The past generation or two of students essentially had the rug pulled out from under them — they were told by all the adults around them that going to college was the surefire path to a well-paid job in a world where well-paid jobs were becoming increasingly rare, making racking up the debt to do so worth it. So they went to college and took on that debt since that was the "right" thing to do, only to come out on the other end to find that getting a degree had little to no bearing on their ability to find a quality job after all and dooming them to working minimum wage jobs and barely scraping by for an indefinite period.
The biggest problem is that it isn't being paired with strict price caps on higher education, or at least restrictions on financial aid that render schools with unreasonable prices ineligible. Without that we're going to have another batch of kids-turning-adults in the same pickle in a few years.
The whole worried hand-wringing over student debt as being terribly bad, but tax cuts, industry subsidies, and rich people loan forgiveness being intrinsically good is all very classist if you ask me.
No, you can't. Collecting taxes is not printing money.
This is an empty argument.
My stance on it (although I am not a US citizen) is that without adding some law that restricts prices for college tuition this actions will do nothing good and only helps to perpetuate a system that moves the money from a younger generation to the pockets of a select few.
If those loans were granted through banks (effectively, regardless of what the sticker said) and those loans won't be repaid after the cancellation, then yes, this would be inflationary. If, however, the loans were originally paid out from the federal budget and the proceeds also went into the federal budget, then effectively this would result in an increase government deficit (resulting in an increase in government debt or reduction in government spending, or both, depending on your behavioral model of the government). The same goes if the loans were initially granted through banks and the government repays the bank loans even after cancelling the debt - it's not inflationary, it's deficitary.
https://www.cse.unsw.edu.au/~norman/CurrentAffairs/DeeperNew...
https://www.investopedia.com/articles/forex/072915/how-petro....
Anyway, with this as a given, why should only the rich benefit? Printing some money for the rest of us is only fair.
What happens to the US dollar once, let's say optimistically, the world is mostly on renewables by 2050?
And printing money is essentially an invisible (boiling the frog) tax which hurts the lower rungs of society the most.
Historically, it has never ended well, in spite of what all the Krugman sycophant types keep trumpeting to please and enable the power that be.
I have no problem with people under lots of student debt getting a 10k shot in the arm. We've spent more on projects that feel less good than this. However, it won't affect consumer behavior any time soon. Unless people's debts are ended, their spending habits won't change and this won't stimulate the economy. However, it does sound like democrats followed through on something, so it's a great political gimmick during election season. I say this as someone who tends to vote democrat.
That's definitely enough to affect consumer behavior.
But we don't talk about that when we talk about cancelling student debt. Because doing so points out just how fucked the entire racket is.
This is not allowing various companies to essentially seek rent in perpetuity from people. It's putting people's production back into their own hands.
So the problem is not the student loan amounts. It's how they're treated.
Life is long and filled with unforseen circumstances, that's why bankruptcy exists.
Businesses bankrupt all the time, Trump bankrupted I think 7 times?, We bailed out the banks for their faulty financial decisions.
But somehow we think it's ok to trap students who made the decision at a young age, and needed an education/job skills to survive, into a world of debt?
I understand that it's a way to be able to give loans to young people with low or no credit.
However, there's so many OTHER ways to deal with this, other than making students slaves to debt for a huge part of their life.
There's a bill introduced to address exactly this.. however it's been stuck in committee for over a year and is probably pretty hopeless.
https://www.congress.gov/bill/117th-congress/senate-bill/259...
35% of my paycheck is spent taking risks.
My taxes fund risky business loans via SBA.
My taxes fund risky first time home buyers via FHA.
My taxes fund risky PPP loans that got forgiven via COVID laws.
My taxes fund Financial institutions making risky decisions leading to bank bailouts.
My taxes fund risky bombing of brown people in middle east for literally no reason risking losing costly military equipment.
My taxes fund losing literally billions in the middle east wars with ZERO accountability.
My taxes fund old peoples healthcare and welfare who spent their whole lives, not exercising and eating poorly.
Student loans shouldn't exist.
And universities should just be either funded as much as all these other areas or subject to the laws of supply and demand like the rest of the world.
So even at 15% interest it would still be cheaper to go to university.
either the government needs to fund the university or the universities need to be subject to the laws of supply and demand like the rest of the world.
None of this half-ass naieve young enslaving kids in debt forever in order to hire an 10 questionable administrators and a degree program in scuba diving.
I know someone who's dad died from a brain aneurysm a bit after she graduated from college. It was a bad situation involving his mental health, and a court-appointed power of attorney stopped making payments to her student loans and didn't say anything. She found out when the loan defaulted. It sucked for her for a while, but she had an engineering degree. Her financial woes acted as a bit of a catalyst for her to actually go out in the world and get a good job, and she dug herself out.
> The Commission on the Bankruptcy Laws of the United States recommended to Congress that educational debt be exempt from discharge in bankruptcy. The Commission made this recommendation despite evidence showing that less than 1% of federal student loans had been discharged in bankruptcy.[1]
Meanwhile, corporate America seems to have no moral qualms about stripping assets from a company, loading it with debt, and then going into chapter 11 to screw the creditors[2]. I don't see why we should hold students to a higher standard than highly paid executives.
[1] https://www.tateesq.com/learn/student-loan-bankruptcy-law-hi...
[2] https://www.retaildive.com/news/the-story-of-toys-r-us-bankr...
https://www.nytimes.com/1974/06/04/archives/default-rise-fea...
It also talks about a general trend to federalize student loans. Does it really make sense to compare students taking federally secured loans to corporations taking private investments?
American Airlines, GM, Kodak, Texaco, Sbarro, Six Flags, all went bankrupt.
Business do this all the time.
Donald Trump did this 7 times.
Apple almost went bankrupt until MSFT saved it.
The federal government literally is in more debt than at anytime in history.
Debt funds literally everything in the world.
Saying that it's ok for these businesses to go bankrupt, and some even get govt bailout, but not a student, is an hypocritical nutty take.
I think government bailouts are a bad idea.
If a private entity invests money into a business and the business fails, that sucks for them but I don't really care. Bankruptcy seems like a necessary legal tool to reconcile otherwise unsolvable accounting. I think the idea of using bankruptcy frivolously is disgusting.
It would be great in my opinion for society to hold corrupt business leaders and politicians personally accountable for intentionally making irresponsible choices that externalize the consequences.
Youre bringing the argument down to a tribalistic subjective standard rather than a rational level headed law to be applied across the board.
Frivolty is subjective and based on who you determine is frivolous.
This is expected based on your original sensational example.
You're arguing off of emotion.
The only to win this argument for you is to leave rationality on the wayside.
On one hand you've got a generation that is being held back by these loans. The very people that are supposed to be starting businesses/building up capital/starting families and whom are the foundation of the future economy. When you view it through the lens of being an economic stimulus, it's actually a pretty good one and will likely be a net-positive in the long term.
On the other hand. While everyone is focused on the people who already paid theirs or who didn't get student loans to begin with, no one including this author ever properly addresses the impact on future students. As far as i can tell all future students are still going to have these huge loans (likely bigger) and this is a one time payout for current loan holders only. Those students are going to look back to now, see we got a one-time 10k payment courtesy of the taxpayer (which will be them) and rightly demand the same treatment. If they don't get it, they will view us as being just the same as the boomers were, cradle robbers that take advantage of the system and then take away the ladder once they are done.
We've essentially set in stone one of 3 paths. One, we periodically do these bailouts, probably blowing up tuition prices further so the students don't really benefit and the only winners are the loan companies+universities. Two, we commit to heavily reforming the system and fully paying for higher education. Or 3, we never do the bailout again and have future students not only pay for their own loans but service the debt we created just for ours as well. While i'd like for us to go with option 2, i don't think this is the likely path, it's too difficult and controversial to be done in the current political climate. The likely path, is that we're going to end up being just as morally bankrupt and selfish as the boomers collectively were.
A correction is not only fair but overdue.
The only thing unfair about it is what about all the people that were more responsible and determined that they can't afford it and went without rather than go into that much debt? It does flatly screw them.
And as one of them, I still say do it, because that's still better and more fair than what been going on for the last 20 or more years.
This action doesn't change the supply of money in the system, just where it ends up, so really it cant have an effect on inflation.
the schools already got paid, and now the money will go into more than likely base economy spends like food and housing instead of the the end of monies lifecycle at a bank or investment.
edit: of note, money is introduced into the system by in large through gov spending (roads, gov, military) - so as much as it would be nice to spend less on military - you can't really cut it off without spending it elsewhere, which I am all for, but you can't just have the government spend less.
edit-edit: this is also kind of the least they can do, and doesn't fix the problem in the future which is why I give it a half-hearted golf clap. It's almost like they want an a class of people to be over-debted....
Student loans themselves were like the government handing out money to banks (guaranteed interest on large amounts of secured debt) and universities (empowered/incentivized to raise tuition and fees drastically for decades with impunity.)
PPP loans were offered as a stopgap measure to stem unemployment during a pandemic. Most people just pocketed the money because they weren't actually doing that badly. I could have taken one and didn't and I regret it now, but that's water under the bridge. It's just funny that all of the opportunists out there who are crying about student loans had no problem taking many multiples worth of PPP loans to line their pockets.
The comparison between a student loan and consumer debt at the end of that article though? Utter braindeadedness.
This is just calling out the kind of hypocrisy of people like MTG who got $183K of PPP loans forgiven but rails against students
This is just Biden taking tax payer money from everyone to give money to people who voted for them (vote for me again ok? I gave you money). that's what this is about, its not about 'the plight of young people'. not that they have a plight. I'd give everything I own for 10x their debt and to be young again.
Another interesting thing, where is the liberals going on about whataboutism now? hah.
The federal government has constitutionally assigned responsibilities that no other entity can fulfill. Becoming further indebted and paying individually-acquired debts, is not among them.
We're talking about the prediliction of one party in the US to bribe one group relative to another, not the other way around.
But since you asked, Democrats have well established intention of getting big donors out of the camapaign game. It's in their national platform and everything.
Ignoring advantages because of the rules you wish were in place seems like a great way to consistently lose. Then how do the rules get changed?
3) is a no-op, so I'm genuinely sympathetic to letting politicians buy votes.
> bribe voters from the public purse.
You're referring to bribing voters from the purse of the voters. That's the only function of government.
/s - I would definitely rather we tackle homelessness, poverty, debt, and create upward mobility for the lower classes, because I'm not a narcissistic greedy bastard.
Semantically, I think cancelling student debt is much more of a "transfer payment".
a loan is an asset to a bank and a liability to a borrower.
forgiving a loan destroys it as an asset (money-like) and causes deflation from a money supply standpoint even if it does increase the buying potential of a borrower.
Since all federal student loans are still in payback pauses for covid this will have negligible effects
Rising interest rates mean less money going to business expansion, which means fewer jobs and less competition for employees, which means lower paychecks.
In the end, it's the poorest people that get dumped on. If you can't afford $1000 rent, you surely can't afford the adjusted $1400 rent. And without a job, you'll be homeless soon.
Short term gain, long term loss.
It isn't printing money, nor is it essentially printing money. Money just sits there. Debt grows exponentially. It is extinguishing debt, in order to allow young people to make financial progress, which will incentivize them to actually work, which will produce actual wealth that we can all enjoy, since, as Marx and Smith both correctly said: labor is the source of value.
Steven Keen was right all along and professional economists should be sent to agrarian communes to work and think about things.
The intention is great and all. Helping out students that were affected by the pandemic. But the execution of this is horrible.
This is just the worst of all scenarios
I don't disagree, but this feels like slapping a bandaid on a bullet wound. It's unclear to me how this will fundamentally make improvements at the source of the problem vs. temporary forgiveness.
What do you think it would take to gain some majority alignment to actually move the needle effectively?
Sorry pal, but they won't be getting any better. You're seeing the slow decline of a country.
Biden (and the Democrats more broadly) have a fairly diverse base with a variety of key interests. And the lesson from the Obama years was that slow playing policy changes in the name of bipartisanship was a great way to get destroyed at the ballot box in the midterms.
I would certainly prefer that an action like this was implemented after we got inflation under control, but I am also not living pay check to pay check with a load of student debt. And if something like this, on balance, keeps hope alive for the midterms then I guess I am onboard.
So many questions that need to be answered. Maybe I'm overreacting, but the whole thing is ridiculous.
Housing is just one example. Our tax laws and spending programs are littered with benefits for the wealthy and powerful. And there are factions in our political system and media that want to distract you from that fact by directing your anger and frustrations at student debt relief and pandemic stimulus check recipients. These one time payments to people in need will in the long run be a rounding error on your lifetime tax burden.
If you really can't stand the "inequity" of this program, I recommend that you go out and take some debt financed extension classes. Then make sure you are making under $120k. And then sit on that debt until the next round of relief. Hopefully that will make you feel better.
In a perfect world, we would fix higher education. But that would take a political consensus that does not seem remotely possible in the near future. And in the meantime, we have a pro-democracy political party that is desperately trying to keep a coalition together in order to stave off an opposition party with authoritarian impulses. I think throwing the coalition a few bones is well worth the cost.
> Stopping unexpected billing nightmares is among the few issues to enjoy broad cross-party support on Capitol Hill and in the White House. President Donald Trump, who called on lawmakers to end the practice in May 2019 and in his State of the Union address in February, issued an executive order in September directing Congress to act before the end of the year.
I think the intention is trash, and just a cynical way of getting young Bernie Democrats on board before the midterms. I'm a believer in forgiving student debt when making community/state college free, not before. Otherwise, it's really just a transfer payment made to millenials/zoomers.
The reason you forgive student debt is the same reason you let people out of prison for drug possession after you legalize drugs. You've raised the standards of what people have a right to do, and you're going back in time to correct your mistakes.
They don't have a lot of choices, though. When your base is Occupy Wall Street and Wall Street, it's going to look like a lot of your choices are arbitrary.
edit: also, a bailout hazard like this will inevitably raise the price of college.
Response: I stand with Ukraine <3.
Billions spent in failed foreign wars, which created seas of generational enemies.
Response: I support our troops <3.
A little bone thrown to debt slaves.
Response: This is outrageous! We will never recover from this recklessness spending!
This is a joke country.
The wealth of the elders is due to many years of printing money.
Of course tacit ageism against the youth to protect old people who cannot do the work of keeping themselves alive is perfectly acceptable.
Everyone everywhere being on the hook to prop up dying people will never be an equitable system.
Deference to the past needs to go. I don’t owe believing other peoples grannies are worth the value printed on government totems of power (coins) and private bank statements (scripture of power with no real power if we don’t accept their validity).
It’s hilarious anti-government types are perfectly accepting of their spreading the gospel of the dollar; that somehow is not government conspiracy to co-opt agency.
Cancel the past. Their spoken traditions need not be ours.
Maybe we should consider keeping the good stuff.
Are you saying we should strip old people of political power? Bring back death panels?
Flowery wording is fun (I use it a lot myself) but brevity is also the soul of wit. Speak clearly and unambiguously!
Death panels were never a thing. That was just Republican propaganda.
Could you explain what you mean by "death panels"?
Just to make sure: what is your definition of "a federalized society"?
Also, what would you suggest in its stead?
They do, however, have the authority to incur "debt" through spending.
Which … is basically printing money.
But this is true for any system which does not have legal guidelines which constrain spending to revenue capture. Which is a good deal more than "just the US".
> The government taxes to control inflation
You say these things like they art not related. Obviously taking money out of the system controls inflation. We could eliminate tax entirely and simply print money to pay for everything, but that would likely lead to runaway inflation.
This is an uninformed talking point