Student Debt Relief?
Student Debt Relief?
On the Brandon Administration's Latest Political Ploy that Does Nothing to Address Any Real Problems, and Some Ideas for Meaningfully Resolving the Issue of Student Loan Debt
So the Brandon Administration unveiled its “student debt relief” plan last week: up to $10K in student loan debt will be forgiven per borrower, unless the student got a Pell Grant while in college, in which case they can get up to $20K forgiven. Like everything else this administration does, it’s a political ploy to buy votes, dressed up in nice-sounding language, but it does nothing to address any real problems.
President Brandon’s Student-Loan Debt Relief Program Won’t Work
To be sure, student debt and the whole shit-show that is the higher education cartel in America is a real problem, but Biden’s student-debt-relief gimmick will only make the problem worse.
First of all, $10K? Really? If you have only $10K in student loans, you don’t have a problem that requires the federal government to print spend hundreds of billions of dollars in order to solve. Most car loans are far higher than this, and word on the street is, bad car-loan debt is a looming crisis that’s about to blow up big time! See, https://www.barrons.com/articles/recession-cars-bank-repos-51657316562!
The effect of printing forgiving $10K per borrower is purely cosmetic. It would be like the Brandon administration printing spending hundreds of billions of dollars on “Breast Cancer Relief,” but the only thing the money actually goes towards is buying thousands of overpriced “Save the Ta-tas” bumper stickers from a government-backed cartel run by President Brandon’s political allies. Nobody who really needs help actually benefits, but the program is massively successful at feeding the cartel and getting people who care about the issue to vote for Brandon (or whatever puppet replaces him) in the next election.
Second, President Brandon is lying when he claims that his student debt relief program will help future borrowers by making college more affordable. I suppose next week ol’ Geriatric Joe will claim that giving massive federal subsidies to support the manufacture of Moon Pies is necessary to help America’s space program.
Any moron with half a semester of macroeconomics under their belt could tell you why the cost of a college education has been skyrocketing ever since the Department of (Mis)Education started flooding the system with easy money to enable absolutely everyone, no matter how stupid he may be, to go to college: demand for a college degree has vastly outstripped the supply of colleges. So college administrators were like, “Oh, snap! We’re selling something that the government is giving people money to buy, and demand is through the roof! Let’s raise our prices . . . and hire some more administrators to work under me, doing administrative stuff and making me feel important!”
And any moron with half of semester of macroeconomics under their belt could also tell you why so many students are having an impossible time paying back their loans after graduating: the supply of college-educated adults has vastly outstripped the demand for them in the job market, meaning that a college degree is less likely now than in the past to open the door to a high-paying career.
And any moron with any work experience and any understanding of human nature knows what happens when you present hiring managers with a bunch of college-educated applicants, even when the job they are applying for does not involve skills or knowledge that require a college education to attain: the hiring managers will arbitrarily decide to require a college degree. Indeed, this is exactly what has happened, as it now requires a B.A. to get a job as a file clerk or a B.S. to become a retail store manager.
A limited number of colleges found themselves flooded with ever-increasing numbers of students. Many of these kids had no real business attending college in the first place and would have been better off going straight to work or joining the military or doing any number of other things; but they were encouraged to go to college their entire lives and told that they would be considered failures if they didn’t, and they were bankrolled, like so much else in this debt-driven economy, by government-backed loans, which were handed out without any regard for the borrowers’ ability to repay their debts. The colleges responded to all this influx of new money by selling watered-down degrees to all who wanted them, while creating lots of bullshit jobs in administration.
That Frankenstein’s monster spawned by government-backed junk debt and the college-degree-industrial-complex continues unabated. President Brandon’s so-called student debt relief program does absolutely nothing to stop it or even slow it down.
I remember hearing Bill Clinton’s State of the Union Address — I think it was 1996 — when he said that he wanted to “make a college degree as universal as a high school diploma.” I was a high school student at the time; I had never taken an economics class or read any books on economics; but I intuitively knew that this would backfire the moment I heard it. I remember thinking he should have said that he planned to make a college degree as useless as a high-school diploma. I know Bill Clinton is an evil son of a bitch — he was a frequent flyer on board Jeffrey Epstein’s infamous “Lolita Express,” after all — but he is no dummy. He knew, as did most of the other politicians who pushed this higher-education cartel onto the public, the effect it would inevitably have on regular people: a few would benefit, especially in the short-term, but for most people it would mean yet another unnecessary and very expensive barrier for them to enter the job market — and that at a time when Clinton and his cronies were pushing a globalist agenda that was devastating America’s working class.
[Note: I am done giving the benefit of the doubt to our psychopathic political class, or assuming that they are merely incompetent, rather than knowingly malicious, when every single one of their “reforms” is sold to the public under false pretenses, and every single one of these “reforms” redounds to the exclusive benefit of the politicians and their donors, both foreign and domestic, while simultaneously harming America’s own working class. This shit is intentional, and it has been for some time.]
Some Ideas for Addressing the Student-Loan Debt Problem
Don’t get me wrong, runaway student loan debt is a problem. America’s overpriced and badly dysfunctional higher education system is a problem. So I part ways with folks on the Right who correctly see Biden’s executive action on student loans as a political ploy, but then have a knee-jerk reaction of claiming that doing anything at all to address these problems is, ipso facto, a leftist position. These problems do need to be addressed, just not in the way President Brandon is doing it.
First, government should get the fuck out of the student loan business. No more printing spending billions of dollars to guarantee student loans. The federal government created the problem of unaffordable but somehow necessary-to-get-a-middle-class-job college-degree-industrial-complex nightmare, and dumping more government money onto this broken-beyond-repair system is not going to fix it. And spending the tax dollars of those who did not go to college, or what is more likely, spending the economic resources of future generations, for whom a middle-class lifestyle will probably be mostly out of reach, in order to subsidize the overpriced educations of those going to college today, is deeply immoral.
Without all the free and easy government money to prop it up, the higher education system would face a cataclysm, requiring long-overdue reforms, and I’m sure many colleges and universities would change for the better; they’d have to if they wanted to survive! And institutions bear an uncanny likeness to biological organisms, in terms of their almost instinctive drive to survive, grow, and reproduce. Some colleges and universities would fail to adapt, and they would wither and die; but those institutions that delivered real value to their students (a.k.a., customers) would thrive, as would their students.
So get the government out of the business of propping up this higher-education cartel with billions of fake dollars. In the short-term, it may be painful to watch, but give it a few years and after the weeping and wailing and gnashing of teeth subsides among academics and leftists, you will see college degrees once more become affordable.
Second, student loans should absolutely be dischargeable in bankruptcy. During the 2016 campaign, folks on the Left tried to make an issue out of the fact that Trump had availed himself of the bankruptcy laws on multiple occasions. Well, good for him; that’s what they’re for. You borrow money to take a chance on something that looks like it might be a good economic opportunity; you make a good-faith effort to realize that opportunity, but you reach a point where you see that you were mistaken and that the venture won’t ever be profitable enough for you to pay off your debts; and so you use the bankruptcy laws to get a clean start and hopefully do better next time. That is something our society has correctly recognized the value of: today’s bankrupt loser may, if given a clean slate, become tomorrow’s successful entrepreneur. So why should those burdened by student loan debt be denied this same opportunity?
Some say that you can never repossess a person’s degree, so it is unfair to let them discharge their student loans in bankruptcy, since they will retain their degree as an asset. First, I’m sure there are a lot of people out there who would renounce their degrees and agree to never ever list them on their résumés ever again, if doing so meant they could discharge their student loans in bankruptcy. Second, don’t entrepreneurs retain their experiences and networks that they develop during an attempt to create a business that ultimately fails and goes bankrupt? How is that really any different?
And not only do we extend the benefits of bankruptcy to failed entrepreneurs, but also to regular old no-self-control-having consumers! If you max out multiple credit cards buying a bunch of useless shit that cannot be sold to pay your debts, you can declare bankruptcy and walk away from your debts. Are people who ran up thousands of dollars in credit card debt from going on overpriced cruises and eating overpriced meals and drinking overpriced cappuccinos somehow more deserving of bankruptcy protections than people who followed the conventional wisdom and went to college because everyone told them that was the responsible thing to do?
[And I’m not saying that everyone who runs up credit card bills they can’t pay does so for stupid reasons. Sometimes people lose their jobs or face unexpected emergencies that exhaust their savings or have any number of other things happen that overwhelm them financially. I’m just saying that even a profligate hedonist spendthrift can use the bankruptcy laws to get rid of his impossibly large consumer debts, so why shouldn’t student-loan debtors be able to use bankruptcy laws to do the same?]
And of course, let’s not forget all those bankers who gambled with the pension funds of middle-class retirees back in the 2000s and wound up with gambling losses bigger than the value of anything they ever actually owned or lawfully managed, and whom the government decided were too big to fail, so the government printed spent trillions of dollars bailing them out. And let’s not forget that those bankers immediately went back to work making millions off government-backed Ponzi schemes, while everyone else got stuck with the bill and the inflation.
Anyway, student loans should be dischargeable in bankruptcy, just like business debts, gambling investment debts, and regular ol’ consumer debts. If you don’t allow people to have their debts discharged in bankruptcy, you create a class of people who realize they have been buried alive by debt and who, therefore, realize that they have zero stake in the ongoing success of the economy or financial system. Having a large class of hopeless debtors is never a good thing for a society, especially when that class of people contains a disproportionate number of highly educated and intelligent people. I suppose that’s what Moses had in mind back when he instituted a recurring “Year of Jubilee” (see, Deuteronomy 15:1-11) back in Biblical times.
Conclusion: Fuck Joe Biden and His Student-Loan Debt Relief Program
In conclusion, I would just like to say, “Fuck Joe Biden.” This supposed student-loan debt relief program will not help anyone who really needs it. It won’t make college more affordable. It won’t do anything to reign in the depredations of the college-degree-industrial-complex. But it will fuel inflation. It will externalize costs of some people’s college degrees onto others who have never gone to college and who may well be doing worse financially than those who will benefit from Biden’s program. And it will do all of this for purely political reasons: to essentially buy votes for Biden’s political allies in the 2022 midterms. That’s it. That’s the only reason. Political gain for a few, at the price of more economic pain for the many. So let me say it again: Fuck Joe Biden!