Bloomberg (11/23/20) warns that one debt cancellation plan “would cost almost $370 billion, about $150 billion of which would accrue to the top two-fifths of US households by income”–in other words, that 40.5% of the benefits would go to the top 40%.
Progressives who have had their doubts about President-elect Joe Biden’s economic policies might get thrown a bone, with Democratic leaders noting that Biden could erase student debt without congressional approval (CNBC, 11/16/20).
The idea of canceling student debt, once championed by Occupy Wall Street and treated as a pipe dream when advocated by Bernie Sanders and Elizabeth Warren (FAIR.org, 7/25/19), is now thought to be viable, and progressives are pushing for it. At the same time, business journalists are churning out reasons why relieving student debt is bad: It’s unfair to people who don’t have debt, and it wouldn’t help the economy that much.
The business press isn’t blind to the debt problem; even the Wall Street Journal (6/7/19) labels the ballooning debt a “crisis,” saying, “Borrowers currently owe more than $1.5 trillion in student loans,” with 2 million people in default over the course of six years. It added that the “federal government now acknowledges that taxpayers stand to lose $31.5 billion on the program over the next decade.”
That’s certainly alarming, but now that there’s an incoming Democratic administration with an emboldened left flank in the party, the business press is wary of bold action. Bloomberg (11/23/20) flipped the script on leftists who believe student debt cancellation would pave the way toward more social democracy, saying that student loan relief helps the relatively well-off and leaves out the poor. David Nicklaus at the St. Louis Post-Dispatch (11/23/20) also said that canceling student debt wouldn’t help “laid-off hotel and restaurant workers,” and that people who already paid off their debts would feel shafted. Fox Business (11/23/20) cited a study saying “that forgiving all student loan debt would provide just a small bump to the economy,” increasing “cash flow by about $90 billion per year, even though it would cost close to $1.7 trillion.”
The business media’s fairness argument against forgiving student debts is made in bad faith: Canceling student debt doesn’t negate other policies that would benefit blue-collar workers or the unemployed. Sanders voters who want to forgive student debt also support increased jobless benefits and stimulus payouts across the board, as well as universal healthcare, which would untether medical costs from employment.
The Boston Globe‘s Jeff Jacoby (11/22/20) writes, “Washington cannot magically make people’s debts disappear.” Actually, since 92% of student debt is owed to the federal government, it can.
Appeals to the non-college educated working class just don’t hold up. For example, conservative columnist Jeff Jacoby (Boston Globe, 11/22/20) writes:
Imagine three 30-year-old neighbors, each of whom earns $50,000 — a construction worker who never went to college, a legal secretary with a two-year associate’s degree and $2,000 in remaining student debt, and a software engineer who attended a four-year college and graduate school and still has $50,000 in unpaid loans. A bailout that erased $50,000 of student debt would give nothing to one of the neighbors, a modest $2,000 to the second, and a $50,000 bonanza to the third.
Jacoby would have us believe that he feels the workers’ pain, but there’s nothing about student loan forgiveness that would block progressives from pushing for things that would address other economic concerns. On the contrary, progressives are also backing the PRO Act, which would make it easier for the first two workers in Jacoby’s example to unionize, and thus achieve higher wages, more job security and better benefits (Washington Post, 2/6/20). Would Jacoby support such a measure for blue-collar workers? Given that the US Chamber of Commerce opposes it, it’s unlikely that the business-friendly pundit would give it his blessing.
As for the argument that forgiving student debt now is a snub to those who already paid off their debt: Please. By this logic, fixing any problem is unfair to those who have previously been harmed by it. This is akin to saying that a vaccine for Covid-19 would be unfair to those who have already died from it.
The talking point that student loan forgiveness wouldn’t help the economy doesn’t hold much water either. When Fox Business compares the $1.7 trillion “cost” of the forgiving student debt to the “cash flow” of $90 billion, it’s essentially talking about the same number: The cost of forgiving student debt (92% of which is held by the federal government) is basically money that Washington could decide not to collect over the course of years or decades, and that’s the money that forgiveness would leave to be spent in the economy. But as Current Affairs (2/7/20) pointed out, the nominal amount of debt is not what forgiveness would cost, since no one expects all student loan to be eventually paid back; some will be “forgiven” at the death of the debtors, who will have lived a lifetime under a debt burden with no gain to the federal government.
NPR (11/25/19) reported, back when the notion was more hypothetical, that many economists believed that such loan forgiveness would increase the buying power of those with student debts. And Business Insider (1/1/20) pointed out that the business press is fond of complaining that millennials are hurting industries because they spend less than their parents did a generation ago. Citing soaring student debt along with the high cost of housing and health care, Business Insider said, “it should come as no surprise that millennials didn’t enjoy being accused of destroying things they simply couldn’t afford.”
The business site The Street (11/21/20) offered more insight into the business sector’s trepidation, fuming, “A big cancellation of student debt might convince people that such forgiveness would become a regular occurrence.”
That is the idea, isn’t it? A great many backers of student loan forgiveness are in favor of reducing all sorts of debt; Astra Taylor, an organizer with Debt Collective, told Democracy Now! (11/20/20), “We need to couple relief programs with debt cancellation,” adding that “there are calls emanating from all over to cancel medical debt, cancel rent.”
Economic progressives have a bigger message: A simple college education shouldn’t mean a life of debt slavery, basic medical expenses shouldn’t lead to bankruptcy, public institutions deserve to be well-funded, and a home shouldn’t absorb the bulk of one’s income. Student loan forgiveness, if enacted properly and swiftly, would erode the economistic consensus that austerity is the only option.
The opponents of student loan forgiveness aren’t afraid that it won’t work; they’re afraid that it will work. If more people reap the benefits of student loan forgiveness, allowing them to enjoy freer lives with more chances for economic advancement, then other progressive and social democratic policies are going to be more appealing. Medicare for All, rent control, higher taxes on the rich to fund public schools, and union membership will become more popular, and more candidates like Rep. Alexandria Ocasio-Cortez will get elected to Congress.
Student loan forgiveness would not be a cure-all for the inequities of US society. But it’s a doable thing that can lead to other progressive economic reforms down the road, at a time when the pandemic and four brutal years of the Trump regime make these more desperately needed than ever. Let’s hope a Biden administration doesn’t listen to these bad-faith critics.
Joe Dough might go as far as some pathetic half step, if that – payment “flexibility” could be the extent of it.
Expect a “bone” with precious little meat on it.
> “business journalists are churning out reasons why relieving student debt is bad: It’s unfair to people who don’t have debt”
it’s similar to taking action against hunger – it would be unfair to those would be unfair to those who aren’t hungry
Ari Paul nailed it. The GOP, corporate Dems and the Wall Street donor class are terrified student debt cancellation would actually work. Its wild popularity would undermine the entire cruel, corrupt power structure.
We might say, it’s roughly akin to letting slaves learn to read. That’s why seven states enacted anti-literacy laws.
Similar logic, and terror, applies to other commonsense progressive agenda items, including (and especially) single-payer universal healthcare. And housing as a right.
There’s also public banking a la the Bank of North Dakota. Applied nationwide, would claw back trillions in public funds from Wall Street’s hands.
While we’re at it, let’s add rightsizing the military. And no longer paying bankers to “lend” US funds to the US government, arguably the biggest financial scam of all.
Thus one big win for student debt cancellation could start unraveling the whole corrupt mess. Piece by piece, wellbeing might start replacing wealth as America’s main power generator.
We can’t have that, now, can we? Let’s be ‘sensible’.
Yes, let’s turn the country into Venezuela instead. Who’s going to pay for all of this? Please. I agree we have issues and inequalities to fix, but this is ridiculous. What happened to personal accountability? And yes, a home should take a good chunk of one’s income. It’s called paying your way.
@Janae Campbell Did you read the article? Debt cancellation costs nothing, you just erase the ledger. There’s nothing to pay for. The money then circulates in the economy instead of going to debt payments, and that creates jobs by increasing demand (more people with more money = more purchasing), which then produces government revenue via the additional income tax revenue coming from the new jobs, and from increased sales tax revenue due to additional purchases.
Cost nothing? The government did not lend the money, they guaranteed it. Financial institutions are the ones who lent the money. Simply “erasing the ledger” does not erase the debt. Or are you suggesting that financial institutions should absorb the cost? If you are suggesting that, it would never hold up in court and if it did, financial institutions would be very hesitant to ever make another student loan without serious collateral. That would hurt low income students disproportionately. Unintended consequences.
Well Janae:
There’s going to be an FT, as there was until the early 1960s.
There’s going to be a nationwide public bank, as there was from the 1930s to the 1950s. It was called the National Reconstruction Agency; the bonds it sold paid for World War II. The likes of Chase and City National didn’t get the be the underwriters. Yeah, a national bank means more than being able to bank at the post office as the Japanese do.
People making more than $400,000 per year, in any form, are going to be taxed at least 70% on their earning in excess of $400,000.
Social Security and Medicare for All taxes won’t be paid only on approximately the first $130,000 in income.
Companies like Apple aren’t going to be allowed to hide massive US profits offshore.
The military budget will be cut significantly. It’s largely a waste.
Oh, and by the way, the US specifically destroyed the economy of Venezuela. Free up its gold, and allow it to sell oil and it would be fine, if not perfect.
Your post affirms the astounding ignorance of the “no, we cants”, or are you a Trumpster? Do you get your “facts” from Hannity or Glenn Beck, or have you decided they’re far too liberal so it’s Newsmax TV for you?
No, I don’t think Biden will do any of the above, but they’re all very real solutions.
And last, until the 1970s, many public universities were tuition free or much cheaper, this lasted into the 1980s. The entire California university system was tuition free until the and of the 1960s and f’ing Ronny Reagan.
So if I am irresponsible and pick a degree in: English, Black Studies, Latino Studies, Psychology, or Sociology and if I didn’t work while going to college and I took out the most I could in student loans to pay for my life for four years, that debt should be borne on a taxpayer who worked their way through college, took longer to complete, picked a good major (engineering)? An irresponsible person’s poor decisions should be paid for by a responsible person? That just doesn’t pass the smell test. If college should be paid for, why not free houses, free food, free, heat, free water, free clothing, free cell phones? Why work?
Tim the nil-College degree thought Police:
Oh okay Tim, now you are the higher education thought police too? Wow….thanks for the laugh.
As with all of the garbage you spew, you have zero evidence to back up your claims. Do you have hard proof of what constitutes an “irresponsible degree”? Probably not, and as usual you are talking out of your ass.
Such is to be expected from someone (like you) who obviously didn’t read the article and is just trolling the headline.
Jay, I happen to know what those degrees pay and the probability of employment. Those degrees have no value. Enlighten us with all of the jobs that a Black Studies major will get. Please tell us the pay. Then tell us the return on investment for such an irresponsible degree. An electrical engineering degree will pay between $120k-$160k for a senior engineer depending on where you live in the country. That person can easily pay any college loan. Senior Black Studies person? I’ve never seen a single ad. for one except maybe at a college. You keep telling the world that there is value. You keep ruining people’s lives by encouraging them to study something useless and something that they have no way to pay for except by suckling the teat of the US taxpayer (of which they probably are not).
Interesting that at least 2 columnists don’t imagine that hotel workers or construction workers went to college.
Given that decent construction jobs pay more than $50,000, while many college graduates are making lattes at Starbucks, I more than suspect many college graduates are working in construction.
And hotel workers in big cities or significant tourist destinations make more than $50,000 a year too. Though there’s a subset working in Super8 Motels, and the like, that don’t.
So more ignorance from conservatives.
Although poorer than the US, free countries like Cuba provide their children with education from kindergarten through graduate school, and health care based on need instead of wealth. There is no reason besides ubiquitous ignorance that the US can’t become a free country with a healthy, educated, comfortable population.
John, yes, Cuba has free education. They also have free medicine. Free and excellent are different. If Cuba is so great, go there. Raise your kids there. Get your medical treatment there. You won’t because you know it sucks. Cuba is ranked by WHO as a better medical system than the US. Why? Because it is free. You don’t see ANYONE going to Cuba for surgery. Take off your leftist colored glasses and use the brain you’ve been given.
Tim, why is it that you are always labeling non-partisan, populist positions as “leftist”? You do realize that student debt cancellation is a popular idea, across the political spectrum—left to right, yes?
“Leftist Glasses”…what? Nothing but projection. If anyone around here is constantly espousing politically myopic sensibilities, it is you. Can you even come up with anything but corporate right-wing news talking points?
John, I know conservatives and centrists. NONE of them believe in cancelling student debt. What is left? Leftists. You and your friends. Extended social programs don’t come from the right. We are fiscally conservative. Free goodies? That comes from the left. It’s all virtue signalling. A way to convince yourself that you are caring.
Tim, sorry dude…but I am not Jay or John…
You said “extended social programs don’t come from the right.” Too bad for you, history demonstrates such a claim to be a bald face lie.
I don’t know about you, but since people are the ultimate beneficiaries, I consider tax loophole laws, and/or Wall Street bailouts to be “extended social programs” as well. “Socialism for the rich”
Such tax loophole laws, which have disproportionately benefitted rich people, along with runaway military spending (again the rich owners of military contracting companies benefitting even more than their workers), have been the opposite of “fiscally conservative.”
As to your closed thread about “irresponsible (College) degrees”: Johns Hopkins University just published a paper titled “Busting The Myth of Useless Majors”.*
Johns Hopkins University is a “Pro-Science” website with “Very High Factual Reporting.”
I asked you for evidence of such a claim (as irresponsible majors), and you replied with none….so (as usual) I’ll be the one who offers up some evidence*.
No Courage,
Tax loopholes are used to incent certain behaviors. Theoretically, those are behaviors that help our economy. Yes, they are abused. Those abuses need to be shut down. Are you in favor of shutting down abuses of welfare?
The devil is in the details of that article. Read it. There is a great deal of hand waving as they justify worthless degrees. Read the supporting article as well.
Tell me, what job does a Black Studies major get? Would you like fries with that? They would be better off working for a company and busting their butt and moving up. They would be better off becoming a welder. The degree does little (if anything). My niece has a Sociology degree. She works for Costco (a job she could have gotten without the degree). Her younger brother is an electrician. His income dwarfs hers.
To me, this is similar to attempts to get the concept of ‘odious debt’ recognized in international law. I think both are valid ideas that should be pursued.
Hey Tim, I’m glad you read the article, but this is not “hand waiving”:
“The COVID-19 pandemic points to additional uncertainties regarding job security, as millions of people lost their jobs and struggle to find work again, regardless of their qualifications or field of study. No degree guarantees secure, fulfilling employment. When recent college graduates face low odds of finding a job regardless of their degree, then any major will lead to a similar outcome.”
-from the Johns Hopkins University essay titled “Busting the Myth of Useless Majors”
This is called empirical reality, the college-to-career path is not some linear ticket to Valhalla. But you go ahead keep believing what you want, the point remains, there is zero evidence of so-called “irresponsible degrees”.
I can only imagine how invisible someone like you must feel over in the cesspools of right wing echo chambers, and I’m glad you keep visiting and commenting on the articles over here at FAIR.
Maybe one of these days, a smidgeon of the “holding truth to power” disposition here, will rub off on you. Maybe you will one day see the light brother; how capitulating to those in power (like continuing with usurious college debt schemes) does nothing for those of us out here who have to live in the real world.
We all have more to gain if we work together. This includes being in support of debt jubilees, like the one Biden has the power to enact, but will not exercise, in forgiving student debt.
Peace.
No Courage,
The article is mistaken about engineering. Right now, engineers are at full employment. Why they are mistaken I don’t know (willful or inadvertent). They are allowed to publish falsehoods. Engineers have been at full employment since 2002. Salaries have increased by 25% in those years. You read and accept left wing articles. Try using your brain.
The college debt “scheme” was a typical Democrat problem. “We need more people with college degrees” and “Over a lifetime, a person with a college degree earns more…” Both were wrong. So, the Democrats pushed for government backed college loans. With this, anyone could take out a loan and major in anything (even stupid things). This caused a large supply of money and students. Colleges responded. They were price insensitive. Cost of college went up because the supply was large and because the money was being spent, wasn’t earned. The unintended consequences of Democrats and education have been horrific. Now, you want to have a person who worked his way through college pay for somebody who loaned their way through college. I have nothing but contempt for those that loaned their way to a stupid degree. That is truth to power (we all mock leftist speak).
“No Courage”? Meh…okay (Boomer?) Mr. projection case.
Complain about the Democratic Party all you want, I agree, their failed “Neoliberal” policies are hypocritical and have played a role in destroying the middle class and labor movement. The Democratic Party’s rhetoric and obsequiousness was summed up best when Nancy Pelosi’s claimed herself a “progressive.”.
Let’s talk about the amount of money that is wasted by way of “Welfare Cheats” versus (1) Unethical tax loopholes, (2) Undemocratic Wall Street Bailouts, and (3) Fraudulent wasted military spending.
An article in The Guardian titled “Welfare Fraud Is A Drop In the Ocean Compared To Tax Avoidance” was written all the way back in 2013. Go read it, this will get you up to speed about that one.
Without even looking at the raw data on how much is lost because of welfare cheats versus other more expensive losses of wealth in society, I can tell you unequivocally that the amount comes nowhere near the amount lost from offshore tax havens and the rigged tax system. The amount of money that goes into welfare is nothing. One billionaire’s annual tax avoidance tab could probably fund Food Stamps for a few years. (My attempt to match your type of bloviating about numbers with zero citations or evidence to back it up).
Last time I checked though, the food allowance for a single adult with no dependents was a measly $26 per month.
Then there are the Wall Street bailouts, again money that is stolen from taxpayers to fund the boom-bust casino capitalist quagmires we constantly end up in.
We also have runaway spending in the military. Have you heard about the three “Stealth Destroyers” sitting in Bath Ironworks dry dock in Maine? All because the U.S. Navy couldn’t afford the ammunition for them ($800, 000 per missile)? Each one of those ships cost taxpayers $7 billion dollars to build. That’s $21 BILLION dollars of wasted taxpayer money!
How does your obsession over welfare cheats square with that loss of $21 billion dollars?
It has nothing to do with courage, we both are losers in the current economy. Whether you are comfortably wealthy or struggling paycheck to paycheck to make ends meet, we are living in dark times where there is a whole lot of unnecessary suffering right now.
The no courage comes from not signing your name.
I’ve already stated that I for loopholes that help the economy. I’m for removing those loopholes that do not help the economy.
The war on poverty has been lost. Trillions of dollars have been spent and there is nothing to show for it.
Suffering will always happen. Sometimes due to no fault of the person’s own doing. Sometimes due to very bad life decisions (dropping out of school, getting pregnant without being married, not getting a job, buying things that are not necessities). This is the very reason why charity belongs at the local level. This way you can see who is making poor decisions and who is just a victim of circumstances.
Biggest spends in US economy: SS, Medicare, Medicaid, and defense. Democrats brought on three of the top four and you want to complain about the one that Republicans like? 70% of those top four go to Democrat sponsored departments and you want to complain about the Republican 30%? No Courage, you’re pretty smart. The problem is that you think with your heart and not your head. When you fix a problem, you often use Pareto analysis. You start with the big items. When you’re serious about the 70%, I’m more than happy to talk to you about the 30%
Wow “tim”,
Your elevator don’t go all the way to the top, does it? Either that or you are just incapable of “thinking outside of the box.”
(Not surprising since research has shown those most willing to be compliant to rules are the most easily duped by authoritarians).
No courage because I title my posts versus typing in some random person’s name? Even (as seems to be the case) if you have no way of verifying the name I type is mine or not? Really?
Tell me how that works please, how you can prove the absence of evidence of my courage by evidence of absence of a name you cannot verify?
To rephrase my question: How is it even possible for you to know that I have no courage based solely on what I choose to type in the box titled “Name”? Why can’t that “Name” be the name of my posts?
Here dude, the textbook definition of the word “name”: “ A word or SET OF WORDS* by which a person, animal, place, or thing is known addressed or referred to.”
*SET OF WORDS…like the phrases I use to “name” or title my posts. Think of the “name” of a book…or title of a book…name is used synonymously here bruv.
Student loan debt is a self-created problem. In a free market economy, higher wages are afforded to economically useful careers. Everyone is free to choose whether to go to school, which school to go to, and what program to study. Student loan debt reflects the decisions the student made. The media needs to stop making students into victims. Choose a field of study that will pay off. Go to a reasonable school given your program of study and availability of funding. Don’t pretend that you thought attending a private liberal arts school for English or art history would be economically useful and that you are a victim for having incurred massive debt on an education without economic prospect.