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My Monthly Rent Identifies as Student Loan Debt
What a disgrace.
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If you’re of sound mind and have some shred of decency left in you that can’t be cowed by partisan zeal, then you’re probably with me on this: Biden forgiving student loan debt — any debt — is absolutely reprehensible. In every which way you want to frame it, it’s wholly illegal and immoral. It just blows me away that anyone can openly, deceitfully advocate for sending other people’s cash to the group with the lowest unemployment rate and the brightest prospects, arguing that it’s “the right” thing to do.
This is vote-buying in its rankest form two months before midterm elections, a down-on-his-luck president throwing money at people for political gain, and it’s disgraceful. College-educated people are overwhelmingly a Democratic voting constituency, making this scheme nothing less than an ugly banana republic bribe.
Neither the American constitutional system nor any of the statutes that Congress has placed on the books give the executive branch the power to unilaterally spend billions of taxpayers’ money in this way. The Department of Education has already confirmed that the president “does not have statutory authority to provide blanket or mass cancellation, compromise, discharge, or forgiveness of student loan principal balances, and/or to materially modify the repayment amounts or terms thereof,” and nothing has changed since that declaration. Even good ol’ Nancy admitted Biden can’t legally do this. But don’t worry, she made sure to get in line:
Any American who has both college debt they agreed to repay and an individual yearly income under $125,000 (or a family yearly income under $250,000) will be given up to $20,000 by the Treasury — which means by you, the taxpayer. The Penn Wharton Budget Model (PWBM) released a policy report on Tuesday that estimated the total cost of $10,000 in debt cancellation for borrowers making less than $125,000 per year would be $329.1 billion over 10 years. There were just under 158 million taxpayers in 2019 according to the IRS, meaning that the average cost of debt cancellation is $2,085.59 per taxpayer. That $329 billion cost of student debt cancellation is also more than the Congressional Budget Office (CBO) estimated the entire much-ballyhooed Inflation Reduction Act reduces deficits in its first decade. In other words, with the stroke of Biden’s pen, the already-fake deficit savings within the Inflation Reduction Act will be wiped out.
Obama’s former chief economic adviser knows how idiotic this is:
Benefiting the Affluent at the Cost of Those Who Didn’t Go to College
A recent analysis from the Brookings Institution — which leans liberal, mind you — found that “almost a third of all student debt is owed by the wealthiest 20 percent of households and only 8 percent by the bottom 20 percent.” That is, the overwhelming majority of student debt is held by the affluent, while less than 10% of it is held by the lower class.
“Measured appropriately, student debt is concentrated among high-wealth households and loan forgiveness is regressive whether measured by income, educational attainment, or wealth,” Brookings Nonresident Senior Fellow in Economic Studies Adam Looney concludes. “Across-the-board forgiveness is therefore a costly and ineffective way to reduce economic gaps by race or socioeconomic status.”
According to the Wall Street Journal, about 70% of the loan relief will go to borrowers in the top 60% of income distribution. Moreover, nearly 40% of student debt is held by those who’ve earned advanced degrees, which advance degrees they use to advance their station within the U.S. economy—doctors and lawyers not the least among them, AKA people who make a lot of money. (This dude teaches LAW at Harvard ⬇)
Another study found that canceling student debt gives six times more benefit to the top 20% than the bottom 20%. The exact numerical values will likely vary depending on how you run the numbers, but the takeaway is obvious.
As Nancy Pelosi put it before she about-faced like a spineless cretin, this is no different than making voters who chose not to go to college “[pay] taxes to forgive somebody else’s obligations.” Astute point, Nancy. It’s a shame your integrity reaches no further than your political interests. You were correct, though: Student debt cancellation is robbing the workers to give bailouts to the wealthy. Indeed, there is no such thing as student loan forgiveness. There is only student loan transferral, where the debt is transferred from the person who took out the loan to someone else who did not take out the loan, and because college graduates earn more than the average American, forcing everyone to collectively eat the loss for their education is actually an inverted redistribution of wealth.
It’s almost amusing that progressives have so easily dispensed with their regular positions and principles and support this policy despite its highly regressive nature. I just finished writing a post I’ve been working on for months, which I’ve yet to publish in this here letter of news because I sent it to the folks at Bari Weiss’s Common Sense in the 0.0056% chance that they might think it’s something worth sharing on their platform. This particular post involved a boat load of research on the very same Americans that this student loan cancellation is most unfair to, people who also happen to be in need of the government’s help in the most dire fucking way. Spoiler alert: The vast majority of them aren’t in a position to go to college and play the pedigree game.
Let’s just do a bit of basic math here, real quick. Under this scheme, someone making $124,999 a year is eligible for student loan forgiveness. That person takes in over $10,000 a month. Meanwhile, your standard Waffle House waitress — for whom college is often out of reach for one reason or another — is lucky to make $486 a week for a yearly salary of $25,272. In what moral universe is it right to offload, however indirectly and however much, the debt of the former individual onto the latter?
Screw ‘em, I guess. Right? Suckers.
That Biden wants people like these folks on the hook for student loan debt rather than the schools who benefit from that free money tells you everything you need to know about who matters here. It’s no different than an act of absolution over the racket that is higher education, and it does nothing to reduce the profligacy and predatory nature of these institutions with their massive endowments.
This student loan debt cancellation is tied to nothing useful whatsoever. No reforms. No reconsiderations. No reflections on, or reevaluations of, the role of higher education. It ignores the root causes of this very real problem and offers nothing to change the incentive system that created this soup sandwich in the first place. Is college tuition way too expensive? Sure, but that’s mostly because of misguided federal subsidies that inflated the cost of college to begin with. You’ve got to perform some impressive mental gymnastics to argue that the solution to a problem created by government meddling is more government meddling.
No matter. This is about naked self-interest. It’s a one-time Chekhovian celebration, meaning anyone who takes out student loans after the policy runs its course isn’t covered, and everyone who paid off their loans last week is SOL.
How Exactly Are They Doing This?
They’re employing a post-9/11 law that allows for debt cancelation “in connection with a war or other military operation or national emergency.” Read: The law that the Biden administration is using to justify student debt cancellation was originally intended to offer relief to deployed service members. Which emergency are they referring to? “[T]he present COVID-19 pandemic,” per a Department of Education memo issued yesterday. As of June 2022, the unemployment rate for people with a bachelor’s degree or higher was 2.2%. Hard to argue that these college graduates were in an emergency situation during the student loan payment pause.
But this brings up another angle that no one seems to be talking about: There are men and women who gave their lives in Iraq and Afghanistan after enlisting in the military specifically because they wanted to use the G.I. Bill and not go into debt. Not to mention the doubtless significant percentage of enlistees currently in uniform who opted to sign their lives over to a not-very-fun existence in the military specifically because it was a way to avoid taking on debt that they knew they’d be saddled with for years and years, all while their peers live at the luxury resorts that American universities have become and indulge in the hedonism afforded to them by the contemporary college education experience.
Oh, and guess where the average student debt is highest? Washington D.C. Coincidental, I’m sure.