• Student loan forgiveness would be a bailout for elites

    From Ubiquitous@21:1/5 to All on Wed Nov 18 21:05:02 2020
    XPost: alt.tv.pol-incorrect, alt.fan.rush-limbaugh, alt.education.higher
    XPost: alt.politics.usa

    Voters sent a clear signal in this election that while they are ready
    to move on from President Trump, they are wary of giving Democrats the
    power to impose a sweeping left-wing agenda.

    In a best-case scenario for Democrats, the Biden administration will
    start with a smaller Democratic majority in the House and a 50-50
    Senate. If Republicans can win just one of the two Georgia Senate
    runoff races, Democrats will be stuck in the minority in the upper

    Preparing for that possibility, Senate Minority Leader Chuck Schumer is
    urging President-elect Joe Biden to bypass Congress to wipe away
    student loan debt. “I have a proposal with Elizabeth Warren that the
    first $50,000 of debt be vanquished, and we believe that Joe Biden can
    do that with the pen as opposed to legislation,” Schumer said.

    In the proposal that Schumer released with Warren in the fall, the two Democrats tried to use the coronavirus pandemic as an excuse to breathe
    new life into a proposal that Warren advanced during her failed
    presidential bid.

    Having the president wipe away a substantial portion of the $1.7
    trillion in student loan debt without an act of Congress would
    immediately trigger significant constitutional challenges. It would
    also be quite the spectacle, after years of blasting Trump for
    executive overreach and calling for more bipartisanship, if Biden came
    right out of the gate with such an extraordinary power grab.

    But beyond these issues, it would be terrible policy.

    Student loans are an undeniable burden on young borrowers, but they
    also represent obligations that they took on because they wanted to
    obtain something of value.

    Forgiving student loans with such a broad stroke would create
    tremendous moral hazard. Individuals who scrimped for years, forgoing
    dinners with friends and vacations and fancy phones to pay off their
    student loans, would effectively feel ripped off knowing that had they
    only been more profligate, the federal government would have wiped away
    all of their debt. Those who were much less careful about their
    spending patterns, on the other hand, would feel vindicated.

    If a president could wipe away debt with a stroke of a pen, Biden would
    not be the last president to do so. Those taking out debt in the future
    would be sent the signal that if they simply hold out long enough, they
    can avoid repaying the money.

    In addition, it would, in effect, mean a huge injection into the higher education racket that would encourage colleges and universities to
    raise tuition even higher. Many studies have shown that the increase in federally subsidized student loans explains much of the extraordinary
    tuition increases we’ve seen in recent decades. If loans are forgiven,
    it will increase demand for new loans and thus provide an opening for
    further tuition hikes.

    On top of this, for a Democratic Party that likes to present itself as
    the party of the worker, it would be a tremendous wealth transfer to
    the elites. College graduates tend to come from wealthier families and
    tend to be more well off and connected. A recent Brookings Institution
    analysis of Federal Reserve data found: “The highest-income 40% of
    households (those with incomes above $74,000) owe almost 60% of the
    outstanding education debt and make almost three-quarters of the
    payments. The lowest-income 40% of households hold just under 20
    percent of the outstanding debt and make only 10% of the payments.”

    It would be reckless and misguided for Biden to kick off his presidency
    by disregarding Congress to orchestrate a massive bailout for the

    "We have put together, I think, the most extensive and and inclusive
    voter fraud organization in the history of American politics."
    - Joe Biden


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