People are told the student loan forgiveness is a wealth transfer from them to the debt holders, because they believe it will have to be paid out of their taxes. This is, I think, mostly propaganda. It could certainly be mitigated through the implementation details of a debt relief program.
I'm not sure what you mean by paid. I don't know precisely the location of student debt, but my assumption is i) the debt holder is the government and ii) the colleges have already been paid (this one seems obvious). In that case there is nothing to be "paid out". The government simply says "you can stop paying us" and stops receiving an annual inbound cash flow from student loans (they did this since the pandemic). You may argue they have to then use debt or taxes to make up that shortfall in annual revenue (I would disagree, but that's ok). If that were true, since the US annual tax revenue is over $4T and the annual revenue from student loans is $70B (in 2019) that represents a reduction in revenue of ~1.75% (assuming the cost of collecting student loan payments is $0, which is unlikely). So in the worst case the government must increase their tax revenue by 1.75% annually to account for the loss of the student loan revenue. Doesn't seem that bad.
There may be debt servicing firms making an income from student loan payments, or student loan refinancing companies, but we could ignore those and say they are ineligible.,
Your assumption i) is wrong. The government does not hold the majority of student loan debt. So, yes, the government needs money in order to make this happen.
I see everything wrong with benefiting only specific people. It is inevitable an avenue or excuse for corruption.
Why should only people of <characteristic X> get $y of help from the taxpayer funds that come from everyone?
The goal is not let the income/wealth gap get too wide, or to provide more opportunities for all people at the bottom. Giving cash to everyone involves zero politics, wastes zero time in arguing politics, and does the job.
For the record, I am against tax breaks period. If the government wants to incentivize something, it should pony up the cash to do it. This would reduce corruption, make it impossible to fudge the numbers, and increase transparency to prevent corruption.
Why should FEMA only help hurricane victims in a city just hit by a hurricane? "Help everyone and give some money to Boston where the weather is perfect."
Hurricane victims needing infrastructure is different than helping poor people because they are poor.
Please state the goal of helping people with student loans. Is it because the student loans are causing them to be poorer? If yes, then you have your answer. Help all poor people, regardless if they decided to invest in a overpriced education.
By the way, the national flood insurance program is a political tool to buy votes from the (previously) swing state of Florida. Taxpayers all around the US subsidize Florida homeowners who want to live in the beach and in areas prone to disaster. This is not a good thing. Continuing to invest in flood prone areas over and over again is a waste of the US’s resources.
This is the type of corruption and misallocation of resources that happens when leaders tilt the scales. Subsidizing people spending their 18 to 30 years learning things or partying or whatever that people in the US and around the world are not interested in buying is also a misallocation of resources.
I have no problem with government providing people a floor for standard of living and opportunity to move up. I do have a problem with government rewarding bad choices, intentional or not.
It is certainly not true. Many getting that assistance are not poor. It's not just about wealth. If you're cut off from basic necessities, you need support. You can't just eat your dollar bills. It isn't just to help the poor. It's to rebuild communities so they can be productive again, including the very wealthy in that community.
> Please state the goal of helping people with student loans. Is it because the student loans are causing them to be poorer? If yes, then you have your answer. Help all poor people, regardless if they decided to invest in a overpriced education.
Some would argue this. This isn't what I would argue. I would say most that would benefit are certainly not poor.
> Subsidizing people spending their 18 to 30 years learning things or partying or whatever that people in the US and around the world are not interested in buying is also a misallocation of resources.
You can argue that you think the benefits of loan forgiveness are not there and we shouldn't do it for x, y, and z reasons. That's valid. Your argument that loan forgiveness is invalid because everyone should get the same instead, is what I don't necessarily agree with.
Are you stating that the government should help wealthier people, even though there are poorer people?
If so, we will simply have to disagree. The goal of wealth redistribution should be to close the income/wealth gap, and that means helping poor people more and rich people less.
I oppose bailing out only people who borrowed for higher “education” for the same reason I oppose bailing out only people who have equity in a failed business. Some investments succeed, and some do not. Bailing them out disrupts the feedback loop for properly allocating resources in society.
>Your argument that loan forgiveness is invalid because everyone should get the same instead, is what I don't necessarily agree with.
Two scenarios. A person decides to enter the trades because they evaluate the cost of higher education and probabilities of future cash flow, and determine tradespeople are more needed and will earn a more appropriate ROI.
Another person does not do any research and signs up for tens of thousands of loans and uses them to obtain skills society does not want to pay for.
Why would society reward the second person specifically for making a bad investment and not doing their due diligence?
And I am not indifferent to the fact that 18 year olds do not know the future, and anyone can make a mistake in projecting movement of supply and demand curves. Which is why I want to help all poor people, not just the ones that took out student loans that did not result in decent income paying work.
The logic you are assuming I am using is incorrect.
The logic of helping with student loans is the student loans are making them too poor. Hence the reason to help them is because they are too poor, and government wants them to not be so poor.
Logically, the government should be helping all who are deemed too poor, regardless of why they are poor.
Child tax credits are neither here nor there in this discussion, because their purpose is to be an incentive to raise children for society. Although I would prefer it to be done via straight cash also, as opposed to meddling with taxes.
Why does you getting something disqualify others? Your poor financial decisions do not make you special, your inability to not pay back your student loans do not make you special, and yet you want special consideration. It’s like saying I didn’t get caught for the crime so why should I be punished?
What you did here with your comment was create a bunch of arguments I do not have. I don't even have student loans, but you made a bunch of stuff up, because your brain is so small that the only thing that makes sense to you is that everyone who supports this policy holds the same exact positions. That is called arguing in bad faith. I hope you learned something today!
