Posted on 05/15/2019 7:36:13 AM PDT by reaganaut1
The time-honored American tradition of outlandish political promises continues apace. Now, the spotlight is on student debt. Democratic presidential candidate Elizabeth Warren added to the debate recently when she put forward a proposal to cancel $640 billion worth of federal and private student loans. Warren touts her plan as a way to boost the economy, redistribute wealth, and help struggling borrowers.
But as justifications for canceling nearly half the outstanding $1.5 trillion balance of student debt, these arguments are woefully inadequate.
To her credit, Warren has recognized and partially addressed one of the major problems with canceling all outstanding student debt. Since student loans finance education, and education is associated with higher earnings, student debt is concentrated among high-income people—meaning that the benefits of loan forgiveness would flow disproportionately to the rich. Warren proposes forgiving smaller amounts of student debt for richer households, partially addressing this issue.
Though this feature makes Warren’s plan slightly less problematic than other loan forgiveness proposals, it is still inherently flawed as a policy. That wealthier families benefit more from it only scratches the surface of the problems with student loan forgiveness. Nearly every argument offered in its favor is wrong.
The first argument Warren offers for her debt forgiveness plan is that it would boost the economy. She writes that student debt is “an anchor on our economy” which is “reducing homeownership rates” and “leading fewer people to start businesses.” Boiled down, this argument essentially stipulates that student loan payments are keeping borrowers from spending their money on other things that would spur economic growth, such as home mortgages or business formation.
Forgiving student debt would undoubtedly increase purchasing power for the people receiving forgiveness. But the money required to pay for debt cancellation has to come out of the economy somewhere else
(Excerpt) Read more at jamesgmartin.center ...
Forgiving Student Debt Isn’t the Solution to Anything
But it sure buys votes.
The only reason forgiving student is an issue is because of votes plain and simple.
Maybe if the Dems pay my house mortgage debt off I’d vote for Dem. Nope, just kidding! I have no mortgage:-)
I’d never hire anyone who had their loan forgiven.
Failure to live up to one’s commitments doesn’t look good on a resume.
The first solution is disbanding the Dept of Education
Gov’t issuing debt for students to simply transfer to educational institutions (an important leftist political and ideological bloc) is no different than the government issuing debt to blow a huge housing bubble.
But it sure buys votes.
It’s the equivalent of getting what you want by saying, “I’ll pull out.”
Forgiving Student Debt Isn’t the Solution to Anything
But it sure buys votes.
There is an important aspect of this movement that is not being acknowledged....
If we forgive the debt for student loans it will be much easier to “forgive” the debt for the next biggest debtors - the democrat strongholds of cities and states that have spent themselves into oblivion. They have to start the idea somewhere and they seem to have chosen a constituency they find sympathetic - students.
Make no mistake. In the next democrat administration/congress there will be a bill to bail out a city like Chicago. I guarantee it because we have a bunch of democrat controlled cities and states in serious economic trouble due to democrat policies. If they can forgive a huge debt nationwide it will be an easier idea to peddle no matter how angry it makes states and cities who followed the rules. After all, they will be bailing out their power base and those of us in flyover country who followed the rules don’t vote for them anyway. This is naked politics at its worst - constitution be damned.
just wondering out loud...
Would that be a legitimate interview question? At a minimum, a simple, “Do you have any outstanding student debt from your education?”
Or “how did you finance your education”?
I would think all things being equal, I would be more impressed with someone who worked through college and paid for at least part of their own education, rather than relying on loans, it shows they have at least some awareness of how to manage money, which is skill that is useful in many areas, even outside of finance.
They state holders of college debt can afford it because they land better paying jobs. Makes sense until you look at how many people are going into serious debt for degrees that are not serious (”____ studies”). For them, I have no sympathy.
It was Biden who excluded student loan debt from bankruptcy laws . You agree with Uncle Joe?
You like Biden for barring people from using bankruptcy to get out from student loan debt? The banks love him for it.
Isn’t forgiven debt taxable as income?
Are the students who paid off their loans going to get their money back????
That was then, this is now, and we can expect Slow Joe to change his position any day now.
They knew the deal when they signed for the loan. And if they didn’t read the fine print, well, not my problem.
If one is going to forgive student debt
recoup the losses from the schools who benefited
Take it out of their hide
They are the ones who got the money
Perhaps they would be more... selective in the future
You agree with Uncle Joe excluding student loans from bankruptcy forgiveness?
What other debt should be barred from bankruptcy laws? Biden rolled back bantuptcyvprotection across the board. You think he was right to do so?
They knew the deal when they signed for the loan. And if they didn’t read the fine print, well, not my problem.
Fine. You want all bankruptcy protection ended, for all debts of all kinds? Even those for which Trump declared bk?
(I’m a Trump supporter btw)
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