Saw this posted elsewhere, originally from
https://www.wsj.com/articles/biden-to-announce-student-loan-forgiveness-plan-11661331600<p>"Independent estimates suggest the plan will cost more than $300 billion over 10 years."<p>To me, that $300 billion could have made more impact elsewhere, for more important and time-sensitive issues.
One interesting thing I noticed here is that people don't have see any problem when government give large subsidies to big corps full of money or forgive their debts or use public money to "save" them during economic crashes, but when government give money to people whatever the reason, there is all kind of comments about how this is a bad thing and why government should not be doing it.<p>Why people are so merciful to big rich companies but so ruthless to other people?
Money is fungible. Forgiving someone of a $10K or $20K loan is the exact same thing as sending them a check for the same amount. At least some of them will go out and buy a car, boat, RV, or something else that has the same payment as their student loan and feel (rightly) like the government just bought them a new toy. You can pretend that it won't have any effect on inflation, but it will.
I have a really hard time understanding how we justify spending money on debt relief for an otherwise capable population when 1 in 8 Americans is food insecure, 9% of seniors have overdue medical debt. It feels like the squeaky, social media savvy, politically mobilized wheel got the grease.
It's a bribe, for votes. IMO, it's much better, and more effective, to let individuals and families decide for themselves how their charitable donations will be allocated. Local decision-making yields less fraud & waste, and it's just ... right to have charititable donations be unforced.<p>.
I have somewhat complicated feelings about student loan forgiveness.<p>Oppressive tuition costs shouldn't have happened in the first place. Nor should university cliques and gatekeeping to education and opportunity happen. I'd like that corrected.<p>On the other hand, I know people who've suffered a lot because they couldn't afford to take on student loans, or because they paid off every predatory dollar. One of them even died at ~30 from the stress pretty directly attributable to that. Others I know continue to suffer. Tuition forgiveness won't help them, and it decreases their relative wealth. Can we also support these other people?
If you think the price tag is $300B then I got a bridge to sell you. Moves like this only beget more moves like this. At heart this is a price distortion and it generates a reasonable expectation of more of the same down the line.
$300 billion / 144.3 million taxpayers = about $2,080 per taxpayer. When I did the math in another comment, I was under the impression that was the per-year cost. If it's over 10 years, that means it's only $208 per taxpayer per year. The cost of public tuition near me is about $2,000/year, the average yearly tuition in the US is $8,000/year. So basically: this cost to the individual is nothing compared to the cost of tuition to the individual that created the debt.<p>As for it being used elsewhere, sure, it <i>could</i> be used elsewhere... but it's not. It's currently money that's just sitting around being debt accumulating interest for banks and the DoE. So it may as well be used to help people out.
Why should people who can't (or won't) pay their student loans be considered worthy of having money spent on them? Invest in the people who know how to handle financial responsibility: they are far more likely to create economic growth and provide jobs for the people who otherwise couldn't pay their loan obligations.
Why hasn't a simple solution of allowing people to discharge these loans in bankruptcy been considered? E.g. retroactively for borrowers before a certain time? I still don't like it, but at least it helps people with $100k in loans who cannot get out instead of giving them a tiny insignificant boost, and doesn't give free money to people who don't really need it?
>To me, that $300 billion could have made more impact elsewhere, for more important and time-sensitive issues.<p>Perhaps it could be spent making education free.
> To me, that $300 billion could have made more impact elsewhere, for more important and time-sensitive issues.<p>The current admin chose loan forgiveness- What do you propose ?