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This is a companion discussion topic for the original entry at https://talkingpointsmemo.com/?p=1300119
This is a companion discussion topic for the original entry at https://talkingpointsmemo.com/?p=1300119
Call me a neoliberal shill, but facts matter if we want to argue about things.
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The 500 billion corporate bailout fund is for loans, not direct cash payments. The corporations will have to pay it back, just as they had to pay back TARP funds, which were all paid back with significant interest. So comparing that fund to eliminating debt is apples to oranges.
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The point of this package, loathe though any Republican and too many Democrats would be to admit such a thing, is to prevent a catastrophic plummet in aggregate demand that causes the kind of depression we had in the early 30’s where aggregate demand stabilizes at a level far below the full employment capacity of the economy. Because student debt is amortized over many years, resulting in comparatively small payments each month, cancelling part of people’s student debt wouldn’t, if you’ll pardon my French, do jack fucking shit to plug the crater.
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Average student loan payment is $400 a month, so it would only take 3 months for the student loan payments to be equivalent to the stimulus checks, which will take approximately that much time to reach the last people. On top of that, these are younger people with these loans who on average will be making less money than the average American, so they are more likely to spend any extra money they have. Therefore, nullifying student debt is likely to have a greater keynsian multiplier than merely sending $1200 to every American (whose income is <99k), and it will spread the effect out over a longer period (see: years) which will be necessary to maintain economic growth, as opposed to just a one-shot measure.
Some bigger issues I can think of re: paying off the student debt would be that you’re basically punishing people who were frugal, got jobs, and didn’t take on student debt vs those who got their maximum possible loans to fund their arts education. And also what about the people who are taking more loans currently or planning on taking loans for their education, would they also not see a dime beyond paying off their current debt? And would you be giving more incentive towards loan providers to try to sell more loans under the premise that the government might just pay that all off for you, so feel free to take as much debt as you want? Slippery slopes.
The best answer of course is that we should adopt many of the socialist programs to reduce the cost of education at public universities to $0, provide essential living assistance to those pursuing higher education, and providing mechanisms to alleviate student loan debt, including allowing for bankruptcy for those who can’t pay their student debt, restructuring debt payoff to be based on percentage of annual income over time (like pay 4% of your income a year for the next 20 years and all your debt is gone, even if you had a million dollars in debt and work as a barista, etc).
But that sort of stuff is unrelated to the immediate desire for economic stimulus, which I’m not sure I feel the same way as say the 3 million Americans who just filed for unemployment.
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At that point you’re also targeting extra stimulus towards those whose families were wealthy enough to send them to college. The actual working class wouldn’t get shit, it’s basically a giveaway to the middle and upper middle classes. There are better ways to do stimulus.
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There are also fewer people with student debt than would be receiving these stimulus payments, so it would have a reduced immediate-term impact from that as well.
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Actually, there was a provision in the Senate version of the bill to suspend student loan payments for six months, I assume it made it through the house, non? Interest is still accruing, but If your goal is to get $400/month into the hands of former students, it seems that this has been done.
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Let’s build a big thick tall concrete wall 9 (at least 80 feet tall, 20 feet thick, going 40 feet in the ground) around a square mile someplace far away from everyone, say Nebraska, or someplace that is already a disaster area, like Arkansas, then we drop everyone who works for FOX news and everyone who has ever attended a MAGA rally, and drop of a generous supply of bibles and hand guns. Leave them there, with a few sharp shooters in towers on the wall to prevent escape. Come back in a month.
Probably a better use of the $$$ for the country.
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How about instead of any of this, a secret society gets formed that assures the oligarchy lives in fear of its lives unless and until it stops behaving like sociopaths? Yeah…still kicking around the stupid book idea…
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Unless Trump is re-elected and the GOP controls congress.
Well, if you permitted it to be refinanced and re-amortized over the remaining life of the loans it would, because that would put more capital in peoples’ hands right now. But yeah, if the payments just remain the same and the loan just disappears quicker, then the benefit is far off in the future.
My larger objection is the same as it was in 2009, when people want to engage in ideologically pleasing ant vs. grasshopper morality plays and moral hazard analysis about who’s worthy and deserving when the point is we’re in a goddamn crisis because there’s a giant radioactive hole in the economy that has to be filled fast before it kills us all, so just feed the goddamn grasshoppers, already, stop worrying about waste, fraud and abuse, and also accept that somewhere someone might make a profit without making a useful contribution to society in return.
Above all, shut it and feed the fucking grasshoppers. It’s the fact that they’ve got nothing because they spent the summer fiddling that makes giving them money the most efficient means of doing it.
ETA: Jesus, can somebody get me a count on how many metaphors I just mixed in this metaphorical trainwreck?
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Hehe…indeed. Hopefully, the grasshoppers are sharpening their pitchforks and it’s not the ground that is first to feel their bite.
This. The big political death of just cancelling it, without consideration of all of those who either already paid off their debt, never took it on, or forwent higher education and have been in lower wage positions because they couldn’t afford to take the debt on.
Lotta people would be pissed off about handouts to those who are already statistically advantaged as a group.
My humble proposal is a Service-for-debt-relief bit, where the government could place people who don’t or can’t join the military (already have debt relief for military service) in other needed jobs in things like healthcare, and have their debt paid off over a few years.
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Nebraska has valuable farm land, but there are several former nuclear test sites in Nevada that could host your facility.
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Not all debts are the same. Someone can have a large student loan debt but also be making a large salary. A more targeted debt forgiveness or no interest payments for at needs jobs that don’t pay well (teachers not having any interest on debt while they are public school teachers for example) would be much more acceptable to the general public. Though just paying off loans wont solve the problem since the cost of school and for profit schools ripping people off is the source of the issue.
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Respectfully and vehemently disagree. Shoveling money at systemically abusive corporations under cover of an emergency is just panicky and ill-conceived. It would take no more time or wit to figure out a more just, less corrupt, and more productive stimulus package. This stimulus only hastens the country’s fall into banana-republic territory, where citizens are conditioned into a kind of peasant gratitude for his lordship’s beneficence. It’s sickening, and it will only get worse.
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Some people are saying that radiation therapy is an effective treatment for covid-19…
Giving loans isn’t the same as shoveling money at them. More harm would be done not giving out loans though with a domino effect going throughout the economy.
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Yup. TARP actually turned a profit for the government.
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Better yet just let the banks collapse and all debt will disappear.
It’ll be a tough few decades but hey I’ve seen Mad Max and it was kinda cool.
The problem with subjectively assigning utility is that entities one does not like will receive too much and the one’s liked too little.
For non blacks average student debt is 38K. I would think an improved future is worth the price of a mid range vehicle.
Additionally I don’t want any funds going to for profit school even if indirectly.
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