Friday, October 7, 2022

Who Benefits From Student Loan Forgiveness?

 Here is one example:


 She does worry about inflation just as many of my readers. Well, according to VD (not that I agree with him on everything, mind you!) it won't cause inflation, but rather vice versa:

Most money is debt and it comes from nowhere. It is not printed by the government, it is literally created from nothing when a loan is taken out. This is inflationary. When a loan is cancelled, forgiven, or written off, the debt literally vanishes. This is deflationary, since it reduces the amount of money in the economy.

If the loan is paid off, either by the debtor or by a third party, then no money leaves or enters the system. It is a neutral action. If interest is paid on the loan, this is mildly inflationary but trivial at current interest rates.

I read lots of discussions on this topic, on Gab and otherwise. Those who can't pay their loans are often called freeloaders and worse who don't bother to work and prefer to scrounge off the system. Yet, many of them have been working and paying for years but can't keep up with interest, as this lady mentions in the comments on the vid above:

Been watching my mom struggle to pay her student loans down for 27 years. Been trying to pay mine down for 7. The interest is what gets people. It is an incredibly predatory system.

I'm sorry but does it sound like a normal situation to you? I remember one guy on Gab said that he signed for interest free loans which then were transferred to another company and suddenly he had huge interest. Usury is literally a sin in Christian religion, something many modern Christians seem to have forgotten.

Again, to quote Vox:

Don’t forget the Parable of the Unmerciful Servant either.

Then the master called the servant in. ‘You wicked servant,’ he said, ‘I canceled all that debt of yours because you begged me to. Shouldn’t you have had mercy on your fellow servant just as I had on you?’ In anger his master handed him over to the jailers to be tortured, until he should pay back all he owed.

He is quite passionate on the subject and I will admit it's him who persuaded me it is a good thing, though I don't share his hatred of the Boomers. He is right to attack what he perceives as "conservatives' egoism" though:

All right, I’m exaggerating. We didn’t actually pay for school. Our daddies did. See, that right there, that’s grit, that’s what that is. The Boomers are right. Just stop whining and do what I did. It wasn’t hard at all.

But it’s still unfair! How will WE benefit from a student loan debt jubilee? Why isn’t anyone thinking about ME and MY compensation? I mean, how can I possibly benefit from the housing market not completely collapsing because 45 million of the most educated people in America can’t qualify for a mortgage? What good is it to me if 45 million people suddenly have the ability to save money for the first time in their lives? I mean, it’s not as if savings = investment, or that I is a core component of Gross Domestic Product, right?

 Also check this one:

I find it interesting that many of these Gab users who are so vehemently against government handouts to the poor hardly say anything when it's the banks, big corps or foreign countries who are beneficiaries (though it has been changing lately). They also will decry men like Soros using their money to interfere with politics but will support tax cuts for the super-rich to the death. Where is logic in all that? 


  1. I went to college in the 1990s and had around $13k in debt. It took me about six or so year to pay. I have mixed feelings here. On one hand, eliminating the debt would help these people. However, no one is discussing about simply ending the college loan system and let these predatory institutions get less money and simply start charging market prices for said education. I've worked at a 'pubic' university; it angers me the staff get little while they always have money to hire another $200k administrator in the central building though it has much less than 10k students during a long semester.

    Many private institutional liberal arts colleges have closed the last few years. Maybe some public institutions need to be mothballed. If had a child, I would tell to get an associates in something technical and not too likely to be exported overseas. STEM degrees are worthless in my opinion given the employers agitate for cheap legal labor here in the US or will export those jobs overseas if given the chance.

  2. I read your post in more detail. Yes, some of these boomers don't realize the corporations have been basically looting the country with rent seeking policies. I do think America shoots itself in the foot with corporate taxes (especially small companies filing as corporation), minimum wage laws, too many nonsensical environmental and labor regulations.

    The semiconductor companies are good example. Many moved out of the US by the late 1990s to go overseas. Now, they say sure, we'll come back, but give us big tax breaks and a handout. I do think some of the offshoring was result of the Bush and Clinton regimes though.

  3. I agree, the whole system is predatory and a scam. I look at my own country. In the past, there were no student loans of any kind, you had to pay for college out of your pocket. On the other hand, you didn't need a college diploma for many jobs. I know Boomer men who started working right after school, went for compulsory military service (abolished now), got some technical education in the army for free, and made a good career. Now you need some kind of a diploma even to change diapers at daycare!

    Children are encouraged to study by everyone around them, many become eternal students cause it's better than working, you name it. At least, our loans are interest-free and can be fully cancelled by the government in many cases, if you graduate. The problem is, many don't, because they never were motivated to study in the first place but were pushed into it at the age of 17...

    They had to change the marriage law to make the spouse not responsible for student debt, so bad it is.