I have a different take that many haven’t heard and most will be shocked for a loss of words.
First, there’s a primitive ethic that every human can feel regardless of their age or education level. That primitive is simply that when one borrows something, one returns it.
Thus, if I lend someone $10,000, I expect to be paid back, and society will back me on it.
Up to this point, everyone reading should be in agreement with me. It’s so simple, it’s boring.
But add the following twist, which is what happens:
The $10,000 I lent out? It’s actually $15,000 that I created from nothing because I’m a big bank central banker. I created $15,000 from nothing, paid myself $5000 and “loaned” the borrower $10,000.
I’m sitting back with my $5000 while encouraging all of you to hiss and snarl at the deadbeat borrower.
I’m smiling because I’m a fat cat and there’s not a damn thing any of you can do about it.
Well, there’s an idea to go back to dollars backed by gold, but that’s just Trump crazy talk, I’ll have my media consortium drill into you nonstop how crazy such Trump talk is, gold-backed dollar? Nope, ain’t gonna happen. Not while fat cats like me can kick back and make boatloads of cash from nothing.
Now about those deadbeats, let’s get ‘em!
The bulk of student loans (and now all of the federal ones) are not issued by “big bank central bankers.” No one cares if the small amount of private loans are repaid or not—note that 80% of students primarily take out federal (not private) loans now. Those are issued by the government, and when they aren’t repaid, the taxpayer is not repaid. That $$ needs to be returned to the Federal Treasury.