The idea of adding more and more spending to an already broken budget is nothing new, but its also extremely confusing to me. Why bother with a budget when we just borrow/print our way out of any budgetary limits we don't like?
I think this is the wrong question to ask of the government. At least notionally, when I borrow as a private individual it's to provide some quantifiable benefit in the future. For example if I'm starting a business, I might draft a business plan, conclude that there is money to be made and an opportunity that will dissolve if I try to save, and borrow money to buy equipment to start the business. What we should be asking is "what tangible benefit for our society is this thing going to have, and do we want to be on the hook to pay for it for 30 years?" I think to the degree that broadband access gives people in rural areas direct access to a market and to knowledge and ideas that they can't access locally, there is a lot of value in the rest of the country paying for this so that they can have the same options that the rest of us have.
That's really key to the question though. The federal government doesn't have to risk any collateral and they aren't held to any repayment schedule. Arguably, once the the debt is created they are actually incentivized to not pay back the debt. The new debt creates new money in the system, removing it later would decrease the money supply and at any meaningful scale would risk deflation.
When governments can create their own money on demand and have no tangible downsides to doing so unless they somehow trigger massive inflation, when does a budget really create much of a barrier to them? When would a government turn down or cancel a program, assuming the money spent isn't going to trigger inflation?
The recently departed government still claims that their borrowing wasn't the cause of the problem.
I honestly don't get how economics is considered a science or predictive. At the highest level its still largely driven by trying to play psychological games to "nudge" consumers and investors in a certain direction. There's no prediction there, and a science that couldn't, for example, predict that printing $4T would cause inflation isn't really very scientifically accurate with its predictions.
Projects which increase economic activity (like rural broadband) can be revenue positive without fees or anything.
Now if the money all gets swallowed up by a huge ISP that doesn't actually give underserved people broadband, then everyone loses and its just corporate sponsorship.
Do you know if there's any way we could really track this?Deficit spending increases the money supply which itself will increase economic activity. I'm not sure how we could know whether an increase in economic activity is due to broadband access or the new cash, especially when the project would likely take years.
That doesn't mean we can't ever do useful work by subsidizing the deployment on infrastructure.
We can and should spend public money to improve broadband infrastructure. I have seen quite a few hugely successful subsidized broadband deployments from PUDs and small municipal power distribution companies in even lightly populated counties. For my money, continuing to subsidize these organizations and empowering them to sell broadband access direct to consumers is a huge value for the money.
If society decides to take $6/year from every citizen to fund Rural Digital Access, it doesn't matter if they do it by raising broadband prices by 50 cents per month, or by raising income tax rates by 0.01%. They both mean the same thing: You, the average citizen, handing over $6 per year.
The only differences are sleight of hand, where politicians "haven't raised taxes" and yet have more of your money at their disposal; and whether it's applied progressively, so the rich pay a bigger share.
There's also the difference of exactly which people are paying. It's not uniform across everybody, not even across everybody with internet access.
A more extreme example of this same picking of winners and losers is student loan bailouts. The winners are clearly the minority of people who get their loans repaid / forgiven and the losers are all the tax payers getting the tab added to the national debt.
'michaelt said (and you quoted):
> The only differences are [one thing] ... and whether it's applied progressively, so the rich pay a bigger share.
Your reply seems to be repeating and slightly expanding on that, but because you started it with this:
> There's also the difference of...
It sets up an expectation that you intended to refute something about the parent comment submitted by 'michaelt. But I can't find anything in the content of your message which disagrees with the parent comment.
Well for starters they signed on the line that is dotted. Their peers who went to trade school or got a job at McDonald's didn't co-sign their loans.
Plus, the interest rates on debt with no collateral that could be discharged in bankruptcy would be significantly higher. There's nothing special about tuition payments not being dischargeable in bankruptcy, it's student loans specifically. If you pay your tuition or buy books on a credit card then you could declare bankruptcy and it'd be treated like all your other obligations.
> If you're anti-loan-forgiveness then you need to allow people to discharge these things in bankruptcy.
No you don't. Bailing out people for bad decisions like attending overly expensive schools or acquiring useless degrees is a bad idea. It just incentivizes more bad behavior.
King for a day, I'd remove the government out of the student loan business entirely. That'd have a massive drop in college pricing. Let all loans be private and let them be dischargeable in bankruptcy. But changing the rules in an existing system on already made agreements is a bad idea.
Why do you think it would do that?
I once tried to take a look at college pricing over the last century but wasn't able to find much data. For the few schools where I did find data I found a general trend of college prices going up at something like 2ish times the inflation rate.
That trend didn't show any obvious change when the government got into the student loan business. Prices continued to go up at about the same rate I'd expect based on how they had gone up before. That suggests government loans aren't a major factor in price increases, and so it seems doubtful that taking them away would make much pricing difference.
Don't get me wrong, I'm glad they increased leave and would always support that move. It highlights the problem of picking winners with financial programs. You can't help everyone and any change will have ripple effects.
In the case of student loans, wiping those loans out puts more spending money in those peoples' pockets. Student debt is a problem and tuition costs are crazy IMO, but there's also no avoiding the fact that increasing spending money in lower income brackets will increase prices and competition. Its hard to predict how much the loan forgiveness will help in the long run versus pushing up prices for everyone.