President Joe Biden’s plan for student debt “forgiveness” is nothing of the sort. It merely takes money from one group of taxpayers and gives it to another. It will not increase access to education, or improve it at all. And it will drive up inflation. In short, it’s yet another leftist sham intended to cull votes from the unthinking herd.
After leaking that the debt forgiveness scheme would amount to about $10,000 per eligible student, the White House — surprise! — made it $20,000 instead, doubling the damage that will ensue.
Under the program, Pell Grant recipients will be eligible for that $20,000 in relief, versus $10,000 for all others. And it goes only to those earning less than $125,000. It also extends the current loan repayment “pause” though the end of this year, while capping the amount a student has to repay at 5% of income.
There are so many problems with this idea it’s hard to know where to start.
How about this: The president doesn’t have the right under the Constitution to “forgive” anyone’s debts. It’s not in his list of superpowers. But that’s just some crazy right-wing idea, you say?
Even House Speaker Nancy Pelosi, no shrinking violet when it comes to leftist lunacy, understands this:
“Here’s the thing,” Pelosi said in June 2021. “People think that the president of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress. And I don’t even like to call it forgiveness because that implies a transgression. It’s not to be forgiven, just freeing people from those obligations.”
And, dang, she’s right. Except as she “frees” some “people from those obligations,” she’ll force others to pay them. That’s called a tax.
But the move is bad on so many other levels.
To begin with, it sets a precedent. Forgive student debts? Why not credit card debts? Household mortgages? Heck, let’s have that national debt jubilee the democratic socialists always talk about, and just stop paying on the $30 trillion and change we owe around the world. Why not?
The fact is, an elemental part of our economy is debt. Debt is a pledge to repay what you owe. It is a responsibility. It’s why people can buy cars and homes. Biden dents this system of trust with his decision to favor one group of debtors over all others and allowing them to abrogate their responsibility to repay their debts.
Then there’s the sheer cost: $311 billion, or roughly three times the annual budget for the Department of Education. Biden has already cancelled $32 billion in debt for some 1.6 million people. Now he’s increasing that cost 10-fold, at a time when the current deficit is expected to exceed $1 trillion for the third year in a row.
But, surely, at least this will lower the costs of going to school for the poor and the working class, right? It’s all about equality, isn’t it?
Sorry, but as Brad Palumbo of Based-Politics.com reminds us, “An analysis by the Wharton School of Business found that Biden’s plan would still give up to 73% of the benefits to the top 60% of earners — aka, 73% would not go to the bottom 40%, who are the poor/working class.”
So that’s another major lie at the heart of student loan forgiveness.
So what about minorities? Won’t student debt relief be a boon to minority students and their parents. Quite the contrary.
“The issue is debt cancellation might reduce the racial wealth gap between two rich doctors, a rich black doctor and rich white doctor, but it actually widens the racial wealth gap overall, because disproportionately the people who hold student debt that went to college are white, and the 87% of Americans that didn’t go to college are disproportionately people of color,” Marc Goldwein, a Johns Hopkins University economist, told CNN.
This headline says it all in just a few words: Majority of White House Staffers Eligible for Biden’s Student-Loan ‘Forgiveness.’
What’s worse, it will contribute to inflation, just as the comically misnamed Inflation Reduction Act will.
Ask President Barack Obama’s top economic adviser, Larry Summers, who in a series of recent tweets crushed the idea of student loan forgiveness.
“Student loan debt relief is spending that raises demand and increases inflation,” Summers wrote. “It consumes resources that could be better used helping those who did not, for whatever reason, have the chance to attend college. It will also tend to be inflationary by raising tuitions.”
Americans are wary of the inflationary impact, too. A CNBC poll found 59% of Americans, who already face $6,000 a year in an annual Bidenflation tax, worry that student debt forgiveness will make it worse.
And it will. Jason Furman, another top Obama administration economic adviser, now at Harvard, had this to say:
“Most importantly, everyone else will pay for this either in the form of higher inflation or in higher taxes or lower benefits in the future … given the new announcement you need to double everything in it,” he tweeted.
Furman noted: “There are a number of other highly problematic impacts including encouraging higher tuition in the future, encouraging more borrowing, creating expectations of future debt forgiveness, and more.”
It’s a terrible move by Biden, supported by the extreme-leftist Democrats who now control Congress. So why do it? Their real aim is to win seats for Democrats from gullible voters in the midterm elections, now just three months away. It’s a shameful display of fiscal irresponsibility and faux-egalitarianism, and yet another big reason why voters should throw the bums out.
— Written by the I&I Editorial Board