Economy Case for student debt cancellation

[DivineMind]

@sabretruth

What a weird viewpoint. How would putting extra money in the pockets of people in your income bracket hurt your prospects on the labor market?

We're talking about what's already happened. Everyone already made all their choices about where they went to school. What is being proposed is just a wealth transfer.

From the very rich, to the middle class and poor in the form of a loan forgiveness + enhanced tax on the rich.

How would this hurt you? Other than arousing some misplaced sense of injustice...

If you work for a paycheck,you should care much more about the primary injustice occurring in this nation: the rich accumulated most of the wealth, leaving us with stagnant wages and low quality jobs. They are constantly trying to cut back social spending, and leave us with even less. They bought off all/most of the politicians, and try to skew the rules in their favor by the day.

Yet you're angrier at the prospect of your neighbor getting his debt written off? Even if you get a tax-credit of similar value?

Weird how people think...

 

[PEB]

Again, the bailouts had significant positive impacts for millions of people from all walks of life, not just members of a faction. The comparison is ridiculous.

I pointed out the issue that the cuts were far more beneficial for the members of the Forbes 400 "nevermind the ones who just missed". The average added about 250 million in net worth in the past year. That works out to a 100 billion of the wealth going to the top 1 percent. Wall Street continues to point to consumers driving the economy.

40 percent of America goes to college. This is a debt that weighs on economic growth. Stimulus in this area could bring by some estimates 140 to 200 billion per year in economic growth. The cost is far more reasonable then other options that have not delivered to the levels that where est.

 

[Deleted member 159002]

@sabretruth

The same sort of argument can be made in favor of student loan forgiveness. It would have positive impacts on the economy that would also help people from all walks of life. And, if done in the right way, could help address inequality in this country between the working class and the ultra-rich.

Not even close. Without credit supply chains would haved slowed to a trickle at best and come to a halt at worst. Ex-students being in debt doesn't cause catastrophic, pervasive harm to the economy.

 

[Deleted member 159002]

@sabretruth

What a weird viewpoint. How would putting extra money in the pockets of people in your income bracket hurt your prospects on the labor market?

We're talking about what's already happened. Everyone already made all their choices about where they went to school. What is being proposed is just a wealth transfer.

From the very rich, to the middle class and poor in the form of a loan forgiveness + enhanced tax on the rich.

How would this hurt you? Other than arousing some misplaced sense of injustice...

If you work for a paycheck,you should care much more about the primary injustice occurring in this nation: the rich accumulated most of the wealth, leaving us with stagnant wages and low quality jobs. They are constantly trying to cut back social spending, and leave us with even less. They bought off all/most of the politicians, and try to skew the rules in their favor by the day.

Yet you're angrier at the prospect of your neighbor getting his debt written off? Even if you get a tax-credit of similar value?

Weird how people think...

It is injustice. Giving money to people for making expensive investments in themselves is unfair to people who chose to make cheaper investments in themselves.

People who went to expensive universities and took out tens of thousands of dollars in student loans are more likely to get better jobs than those who chose not to. These ex-students aren't going to bear the hardships of the millions of other Americans trying to get good jobs who chose lower-reward, lower-cost investments, so let them bear the hardship associated with their educational investments.

 

[Gregolian]

These ex-students aren't going to bear the hardships of the millions of other Americans trying to get good jobs who chose lower-reward, lower-cost investments, so let them bear the hardship associated with their educational investments.

Except for lots of people with student loan debt they're not able to save as much as say the guy that is the welder straight out of high school. So really no one is getting any upward mobility economically cause the welder is just living their life in the middle class paying off the shit they owe for the house/car and stuff while the dude with student loan debt his paycheck per pay period may be bigger but more of his paycheck is going to paying of the loan debt so ultimately he's the welder's neighbor.

 

[Headkicktoleg]

I think cancelling student debt is a nonstarter. People made their decisions and knew the consequences. Student debt is no secret. There should be a conversation about making college free or at least community college free including trade training from here on though

 

[DivineMind]

It is injustice. Giving money to people for making expensive investments in themselves is unfair to people who chose to make cheaper investments in themselves.

People who went to expensive universities and took out tens of thousands of dollars in student loans are more likely to get better jobs than those who chose not to. These ex-students aren't going to bear the hardships of the millions of other Americans trying to get good jobs who chose lower-reward, lower-cost investments, so let them bear the hardship associated with their educational investments.

"Bankers who took out excessive risk were more likely to get huge bonuses and much more money than people who didn't choose to do that. Therefore they should have to bear the hardship associated with taking the risk in the first place, namely, going bankrupt".

If you had consistent logic, you would also be in favor of this. But it seems that you believe it was OK to let these guys slide because everyone reaped some reward from it. But you don't seem to be letting the students slide even if all working people got some benefit out of it.

But you seem to be saying that well, it's only ok to deviate from these principles if we're avoiding some sort of catastrophic outcome.

I propose that cancelling student debt is a way to avoid a catastrophic outcome. We're at record levels of wealth inequality. The rich have used their wealth to buy our political system. We have to start making things more equal in wealth terms, and then fix our political system. If the wealth gap increases any further, this country will be heading towards a calamity.

Thats my opinion, I see debt cancellation as one possible policy to address inequality. I think it's critically important that it's addressed. But at the end of the day, it doesn't matter how the money is transferred from the rich to the middle class. I don't care if they write out checks, if that's less offensive to your sensibilities. Has to be done though.

 

[Deleted member 159002]

"Bankers who took out excessive risk were more likely to get huge bonuses and much more money than people who didn't choose to do that. Therefore they should have to bear the hardship associated with taking the risk in the first place, namely, going bankrupt".

If you had consistent logic, you would also be in favor of this. But it seems that you believe it was OK to let these guys slide because everyone reaped some reward from it. But you don't seem to be letting the students slide even if all working people got some benefit out of it.

But you seem to be saying that well, it's only ok to deviate from these principles if we're avoiding some sort of catastrophic outcome.

I propose that cancelling student debt is a way to avoid a catastrophic outcome. We're at record levels of wealth inequality. The rich have used their wealth to buy our political system. We have to start making things more equal in wealth terms, and then fix our political system. If the wealth gap increases any further, this country will be heading towards a calamity.

Thats my opinion, I see debt cancellation as one possible policy to address inequality. I think it's critically important that it's addressed. But at the end of the day, it doesn't matter how the money is transferred from the rich to the middle class. I don't care if they write out checks, if that's less offensive to your sensibilities. Has to be done though.

In addition to benefiting non-bankers by preventing unemployment from spiraling percentage points higher, the bailouts have directly produced a net gain for the Treasury: the paid-back principal combined with revenue from investments is greater than what the Treasury gave to the bankers.

Bailing out people who made expensive educational investments in themselves wouldn't do anything to bridge the gap between billionaires and the rest of us. All it would do is widen the gap between the bailed out ex-students and the non-billionaires who chose lower cost educational investments or none at all.

 

[DivineMind]

In addition to benefiting non-bankers by preventing unemployment from spiraling percentage points higher, the bailouts have directly produced a net gain for the Treasury: the paid-back principal combined with revenue from investments is greater than what the Treasury gave to the bankers.

Bailing out people who made expensive educational investments in themselves wouldn't do anything to bridge the gap between billionaires and the rest of us. All it would do is widen the gap between the bailed out ex-students and the non-billionaires who chose lower cost educational investments or none at all.

Ok, this is a little nutso. Taking trillions from the rich and giving to the middle class wouldn't help close the wealth gap? Uh...

You also keep assuming there isn't a fair way to implement this, like ALSO giving money to the people who don't have student debt.

 

[PEB]

Rand Paul just proposed allowing people to take out up to 5000 per year out of their 401K to pay down student debt without taxes or penalties. Should go to 10 grand a year. But at least you know Senators and congress people are working on ideas. Unfortunately it's likely dead in the water. President Obama proposed a one time 10 or 20,000 dollar plan to take money out of 401k to make it through the economic slowdown at 2009. It did not get anywhere an President Obama never talked about it again.

https://www.google.com/amp/s/amp.courier-journal.com/amp/2594066001

"
The Kentucky Republican is introducing federal legislation to allow individuals to take up to $5,250 — tax and penalty free — from their 401(k) or IRA each year to help pay for college or pay down student loan debt.

Parents or spouses could divert money from retirement accounts to help.

Americans collectively owe about $1.5 trillion in student loans.

Paul sees his bill as a step forward to deal with the problem. He says it’s important for Republicans to offer a plan to relieve student debt.

His bill is called the Higher Education Loan Repayment and Enhanced Retirement Act.
"

 

[Deleted member 159002]

Ok, this is a little nutso. Taking trillions from the rich and giving to the middle class wouldn't help close the wealth gap? Uh...

You also keep assuming there isn't a fair way to implement this, like ALSO giving money to the people who don't have student debt.

Average student loan debt is $31k. If the government gave, say, every American aged 20-40 $31k it would cost over $2.5 trillion. If that was the proposal, and economic analysis showed it wouldn't harm the non-rich, I guess I'd support it. But then it wouldn't be student loan forgiveness, it would just be welfare. Which is fine, but we should be clear on that.

The likelihood of that happening though seems close to nil. I'd be surprised if the 20-40 year olds who didn't have student loan debt got more than table scraps in any bill aimed at student debt forgiveness.

 

[Sensei Student]

You’re missing some taxes in there

off the top 5% higher for me though, which is more than I spend in healthcare

off to a bad start

Province tax
https://turbotax.intuit.ca/tips/ontario-provincial-taxes-and-credits-574

11.6% for me up from 6 in Kentucky

now I’m paying 10% more in Ontario which is the closest province to me

Then we get to value added tax and the like

it’s higher
A lot higher

so just know that when you’re picking

That's very ignorant. It's like saying you rather give up your health benefits for a 10% raise. Their healthcare is vastly more superior than ours. IDK about your insurance but most insurance don't cover 100%. If you have a procedure, they usually cover like 90% or whatever and you pay the rest. Insulin will also break your bank. Insulin is only like $15 or something. People rather fly to Canada to buy them than go broke in the USA.

I haven't heard of anyone going broke due to their health. Only in America can you go from well off to bankrupt overnight due to your health; something you can't control. And only in America do adults stay in debt for years or decades. Corporations run this country.

I'd rather pay 5-10% more tax to get better healthcare. Those 5-10% you're saving is not gonna save you when your health goes down the drain.

 

[cincymma79]

That's very ignorant. It's like saying you rather give up your health benefits for a 10% raise. Their healthcare is vastly more superior than ours. IDK about your insurance but most insurance don't cover 100%. If you have a procedure, they usually cover like 90% or whatever and you pay the rest. Insulin will also break your bank. Insulin is only like $15 or something. People rather fly to Canada to buy them than go broke in the USA.

I haven't heard of anyone going broke due to their health. Only in America can you go from well off to bankrupt overnight due to your health; something you can't control. And only in America do adults stay in debt for years or decades. Corporations run this country.

I'd rather pay 5-10% more tax to get better healthcare. Those 5-10% you're saving is not gonna save you when your health goes down the drain.

Stopped at more superior
When you graduate middle school I’ll listen

 

[Sensei Student]

Stopped at more superior
When you graduate middle school I’ll listen

lol sorry grammar nazi. I actually thought about fixing it but I thought fook it and hit submit. Still more superior and US healthcare still more inferior.

 

[cincymma79]

lol sorry grammar nazi. I actually thought about fixing it but I thought fook it and hit submit. Still more superior and US healthcare still more inferior.

You offered no argument except not getting a bill when you get sick
Again my total medical expenditures are under 5%. Thats copays and everything. So 10% more or 13000 a year more to get it for free. What a bargain. Then there’s the vat. Another additional 5% for everything I buy. Don’t know exactly what that turns into annually but over a year, that would be a lot.

 

[MASShole]

Imagine the horror of those truly middle class people having more money in their pockets, which means more spending and paying off other things. The horror of boosting the economy! How dare they spend their extra cash!

 

[SSgt Dickweed]

The student loans companies are straight up shysters.

 

[djacobox372]

I think cancelling student debt is a nonstarter. People made their decisions and knew the consequences. Student debt is no secret. There should be a conversation about making college free or at least community college free including trade training from here on though

I mostly agree but I'd accept two alternatives:

1)Allow bankruptcy to cancel student loan debt provided that debt is more than 15 years old.

2)Partial forgiveness AND refund of payments for all student loans that were administered in the time frame that coincides with the predatory student loan practices. Having paid the loan shouldn't disqualify one from being compensated, in fact they should add interest for the payments that are being refunded based on what the $$ would have earned in the market had it not been paid.

 

[djacobox372]

The student loans companies are straight up shysters.

100% agree that student loans were and still are predatory, the problem is that justice is only being sought for those that haven't paid them back. EVERYBODY should be compensated, having paid them back only makes one more of a victim as they are also out the opportunity cost of that $$.