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 ...
Is anyone out there rallying to forgive mortgage debt?
How many times have you seen students on the media proclaiming that they successfully paid off their student loans by working two or three jobs. There is a shortage of labor at present, and I feel certain that any student that wants a second job can find one—even if it only involves weekend work. They don’t because they wait and hope that the debt will be forgiven. This should never happen unless those that did not go to college and create unnecessary debt get the same amount. They finished high school, went to work, and probably borrowed some money too. What about them.
Agree most of what comes out of Colleges never use what they learned it’s a no win deal.
To many can’t even do 10th grade math of read above the 6th grade level no wonder so many parents do the bribe gig.
Treat post secondary education as a utility and set maximum prices for tuition. That will show those commie bastards that run “Big Education”.
Globalist propaganda. There is not a labor shortage. Wages are barely keeping with inflation. which shows the fallacy of that argument.
Bailouts are only allowed if they help banks and large corporations. Like GM, and all the banks in 2008.
But if a bailout helps normal Americans, that’s bad.
Got it.
“I’d never hire anyone who had their loan forgiven.”
Agree. But will you use a bank that took bailouts? WOuld you drive a GM product?
I would never drive a GM product ever again.
I had a young man interview with me for a position which required a degree. His resume said he was working on the degree, but not finished. During the interview, I asked him why he hadn't finished, when he'd been working on it for a while. His answer was that he didn't like debt, and was paying his own way through, so it was taking longer. I hired him. That kind of personal responsibility is rare in the younger generations.
Good for you!
Fraud, collusion, lack of transparency, self-regulation, lust for money- it’s a toxic stew that has ruined “education”.
What we need is a president willing to say that the emperor has no clothes.
“My parents paid for four years of college for me. I paid for four years of college for each of my three children.”
I did the same but required my child to hold a 10 hour per week job while going to school. When my child graduated she told me she wanted to go to graduated school. I told her she was on her own, she could figure out how to finance it and support herself. The only thing I offered was a roof over her head if she wanted to live at home while in school. She took me up on that offer, went to a state school to minimize tuition and fees, worked two jobs, and borrowed what she couldn’t earn while going to school. She finished one semester early, immediately found a job in her chosen field, and paid off her loans within 3 years. In her early 30’s she is debt free and saving a high percentage of her income in order to pay cash for a home. It is unfortunate she has so far been unable to find a like minded young gentleman who shares her values and is willing to sacrifice current desires to achieve financial independence and security.
My child is extremely angry about the potential for college debt to be forgiven. I don’t blame her.
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