The four major economic pitfalls of student debt relief

[Counselor706]

President Joe Biden announced a much-anticipated plan to cancel student loan debt for millions of people across the country. But the plan faces some major economic problems.

The administration is moving forward with canceling $10,000 of student loan debt for borrowers who earn below a $125,000 annual income threshold.

The news is being cheered by many on the Left (with some even saying it doesn’t go far enough), but the plan is being widely condemned by the Right and many prominent economists. Here are four major conceptual economic pitfalls it will encounter:

Link for the list... https://www.washingtonexaminer.com/policy/education/four-pitfalls-cancel-student-loan-debt

 

[ll74]

Looks like this is the new grievance of the week. Four posts within an hour. Ding ding ding.

 

[Counselor706]

Nixing $10,000 of debt per borrower would cost $298 billion in 2022 and a total of $329 billion by 2031 if the policy is renewed each year, according to a nonpartisan analysis from the University of Pennsylvania’s Wharton School. Less than 32% of the funding would benefit Americans in the two lowest income quintiles, while 42% would benefit those earning more than $82,400 per year.

Indeed, a report from the Brookings Institution observed that one-third of student debt is owed by the wealthiest 20% of households, while only 8% is owned by the bottom 20% — likely because graduate degrees are often necessary for the most lucrative professions.

The policy may offer additional distortions as potential borrowers consider the possibility of future bailouts. “If student loan debt forgiveness is ongoing, students might eventually reorganize their financing toward additional borrowing,” the Wharton economists explained.

https://www.dailywire.com/news/breaking-biden-announces-details-of-student-loan-cancellation-plan

 

[Mrtenant]

Right, because trillions in tax breaks and subsidies should only go to the wealthy

 

[BabyBoomer50s]

Left-leaning voices are joining the chorus of critics. Yesterday the former head of Obama’s council of economic advisers blasted the order. This morning it’s the subject of the lead editorial in the Washington Post.

THE POST'S VIEW

Opinion​

​

Biden’s student loan announcement is a regressive, expensive mistake​

“Widely canceling student loan debt is regressive. It takes money from the broader tax base, mostly made up of workers who did not go to college, to subsidize the education debt of people with valuable degrees.”

“Mr. Biden’s plan is also expensive — and likely inflationary. The Committee for a Responsible Federal Budget estimatesthat extending the loan pause to the end of the year would cost $20 billion, while forgiving $10,000 for households making less than $300,000 would cost $230 billion. Together, these policies would nullify nearly a decade’s worth of deficit reduction from the Inflation Reduction Act.”

https://www.washingtonpost.com/opinions/2022/08/24/biden-student-loan-forgiveness-mistake/

 

[Rightguide]

It will only drive up tuition costs in the future.

 

[Rightguide]

Remember back in April when Nancy Pelosi said this: "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," Pelosi explained of the nonexistent power — "that has to be an act of Congress"

 

[ll74]

Remember back in April when Nancy Pelosi said this: "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," Pelosi explained of the nonexistent power — "that has to be an act of Congress"

Yes, it's good that Fox news told you to bring that up. Good minion

 

[Counselor706]

Student debt forgiveness is personal for the Biden administration. About one in five of the White House aides required to file a financial disclosure, as Bloomberg News previously noted, reported owing student debt. Collectively, those 30 senior White House staffers owe as much as $4.7 million. Those personal finances are not unusual in the nation’s capital.

There is more outstanding student debt in Washington than in any other city in the country. The average debtor in D.C., according to a 2021 breakdown by the small business analyst, AdvisorSmith, owes $54,982 in unpaid student loans. This includes many political staffers at the Department of Education, senior advisors as well as junior aides who moved to that agency from the Biden campaign.

Analysis of financial disclosures by the conservative-leaning American Accountability Foundation found that the political staff at the agency that oversees the student loan program stand to benefit. The outstanding student loan debt balance among 41 education staffers evaluated could amount to between $2.8 and $6.5 million. According to the Foundation estimate obtained by RealClearPolitics, the president may have wiped away as much as $512,646 of their debt.

https://www.dailysignal.com/2022/08/25/biden-student-loan-amnesty-a-windfall-for-dc-staffers/

 

[Rightguide]

The first could be the expenditure of another 500 billion to accompany the trillions already spent by this mad man.

 

[Counselor706]

Flashback #1: “I don’t think I have the authority to do it by signing the pen,” – Biden, Feb. 16, 2021

Flashback #2: “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.” – Speaker NANCY PELOSI, July 28, 2021

Flashback #3: “If the issue is litigated, the more persuasive analyses tend to support the conclusion that the Executive Branch likely does not have the unilateral authority to engage in mass student debt cancellation.” – Former Obama Education Department legal counsel CHARLIE ROSE in a private memo obtained by the WSJ earlier this year.

https://www.politico.com/newsletter...olt-against-bidens-student-debt-plan-00053689

 

[ll74]

https://www.politico.com/newsletter...olt-against-bidens-student-debt-plan-00053689

His advisors changed his mind.

 

[Rightguide]

https://www.politico.com/newsletter...olt-against-bidens-student-debt-plan-00053689

Biden has a bad case of CRF (Can't Remember Shit) his staff is going to try and ram it through anyway because they are at war with the Constitution and the separation of powers. This will ultimately be decided in the courts, but meanwhile, Biden will have gotten the Dummy Vote he's trying to buy with the effort.

 

[Counselor706]

The White House can't be sure how much President Biden's student loan forgiveness program will cost, White House press secretary Karine Jean-Pierre says.

Jean-Pierre made the statement during her White House press briefing on Thursday, telling reporters that the cost of the program will depend on borrowers and the nature of their loans. Watchdog groups say Biden's plan will cost taxpayers up to $600 billion over the next 10 years.

Jean-Pierre went on to argue that the cost will be offset by the deficit reduction included in other Biden administration priorities. She told reporters that the bill will not be "fully paid for" internally as past White House initiatives have been, but will be further offset by the resumption of loan payments after being paused since 2020.

The Committee for a Responsible Federal Budget released an analysis on Thursday stating that the program will cost between $440 and $600 billion, settling on a central estimate of approximately $500 billion.

https://www.foxnews.com/politics/ka...real-sense-how-much-student-loan-handout-cost

 

[Counselor706]

That authority, according to a five-page legal memorandum from the Education Department, stems from a post-9/11 law known as the HEROES Act of 2003.

The memorandum claims the nearly two-decade-old law gives the Biden administration "broad authority to grant relief from student loan requirements during specific periods (a war, other military operation, or national emergency, such as the present COVID-19 pandemic) and for specific purposes (including to address the financial harms of such a war, other military operation, or emergency)."

"I want to ask about the legal basis for canceling student debt," Heinrich began. "The HEROES Act hinges on student debt cancellation being tied to the pandemic and that being a national emergency. But the administration argued in court that the pandemic is over at the southern border to lift Title 42. It’s so over that the government is going to stop buying vaccines in the fall and shift to the private sector.

Press secretary Karine Jean-Pierre claimed the administration is justified in now arguing the pandemic remains a national emergency because when the moratorium on student loan payments ends months from now, people will "suffer."

https://www.theblaze.com/news/reporter-white-house-double-standard-covid-national-emergency

 

[Rightguide]

https://www.theblaze.com/news/reporter-white-house-double-standard-covid-national-emergency

"Relief" does not equate to the cancellation of debt. We should expect an injunction from a federal court in the coming weeks.

 

[the_single_gal_unconfidential]

we bail out the savings and loans, banks, Wall Street, airlines.
we give the 1%ers and corps 1.9 trillion.
and the peeps just go blissfully happy with their thumbs in their asses.

 

[Counselor706]

It is virtually certain that Republicans will take over the U.S. House of Representatives on January 3. The only question is how large the GOP margin will be. While flipping the Senate is likely but not certain, at minimum one branch of Congress will be in the hands of the opposition party.

The Supreme Court in its 1997 decision Raines v. Byrd set forth the modern doctrine for “legislative standing,” setting forth the circumstances under which the first branch of government (Congress) can drag the second branch of government (the executive) into the third branch of government (federal court).

Raines holds that if Congress believes the White House is violating legislative prerogatives under the Constitution, then either house of Congress may by majority vote authorize one of its members to file a federal lawsuit in the name of that house, asking a federal judge to rule on the legality of what the Executive Branch has done.

So once Republicans have 218 votes to put McCarthy in charge of the chamber, they will also have the requisite 218 votes to authorize Speaker McCarthy to file suit in federal court in Washington, DC, alleging that the actions of Biden and Education Secretary Miguel Cardona violate the Administrative Procedure Act (APA), because only Congress has the authority to spend money or to take on debt.

https://www.breitbart.com/politics/2022/08/26/speaker-mccarthy-sue-biden-student-loans/

 

[ll74]

https://www.breitbart.com/politics/2022/08/26/speaker-mccarthy-sue-biden-student-loans/

The GOP has lost a ton of support in the last month. The margin in the house is shrinking and they've lost their chance at the Senate.

 

[ll74]

The main bullshit from the right is that people who are struggling are doing so because they made the wrong choices. Doesn't matter why or how they ended up there.

Unless they voted for the right party

 

[RobDownSouth]

Prediction: The kvetching over student loan forgiveness will not last moar than one or two newscycles. It's fairly popular across a wide swath of America. The pearl clutchers are phoning this one in.

Looks like this is the new grievance of the week. Four posts within an hour. Ding ding ding,

 

[YDB95]

I could see it getting some traction if Trump weren't still out and about putting his foot in it again and again. But he is.

 

[BluesDriver66]

Nixing $10,000 of debt per borrower would cost $298 billion in 2022 and a total of $329 billion by 2031 if the policy is renewed each year, according to a nonpartisan analysis from the University of Pennsylvania’s Wharton School. Less than 32% of the funding would benefit Americans in the two lowest income quintiles, while 42% would benefit those earning more than $82,400 per year.https://www.dailywire.com/news/breaking-biden-announces-details-of-student-loan-cancellation-plan

Easy fix. Implement Medicare for All and use the savings fund student debt cancellation.


Medicare for All Would Cover Everyone, Save Money and End Medical Debt

A recent study by Yale epidemiologists found that Medicare for All would save around 68,000 lives a year while reducing U.S. health care spending by around 13%, or $450 billion a year.

Medicare for All spending would be approximately $37.8 trillion between 2017 and 2026, according to a study by the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst. That amounts to about $5 trillion in savings over that time. These savings would come from reducing administrative costs and allowing the government to negotiate prescription drug prices.

Other studies by think tanks and government agencies have analyzed single-payer proposals at the state and federal levels. Most found Medicare for All would reduce our total health care spending.

https://www.citizen.org/news/fact-c...-leave-millions-uninsured-not-garner-savings/

Even a study by the Koch-funded Mercatus Center found that Medicare for All would save around $2 trillion over a 10-year period.

 

[Chobham]

"Relief" does not equate to the cancellation of debt. We should expect an injunction from a federal court in the coming weeks.

Yup.

 

[LittleDixie]

Prediction: The kvetching over student loan forgiveness will not last moar than one or two newscycles. It's fairly popular across a wide swath of America. The pearl clutchers are phoning this one in.

It's fairly popular among people who owe student debt.

...because it's essentially a $10k gift that the government will make everyone else pay them.