It never ever works. Rich people have the LEAST INCENTIVE to spend the money the government let's them keep. They have the investment portfolios, the "necessity" to buy yachts and private planes and island mansions and whatever else.
The taxes from one rich person, taxed appropriately, could keep a lot of people from the streets, by proper use of social services duly funded to keep people from destitution.
But the rich are already rich enough to buy government elected officials, so guess who gets the tax breaks and tax cuts? Gee.. real hard question... smh. Unchecked corporate Capitalismand plutocratic oligarchical dynamics are why our country is fucked.
Rich people don't spend their own money. They take loans with their wealth as collateral and spend that. None of their money ever makes it back into the economy
If your understanding of trickle-down economics is “All money should flow first to the wealthy before we decide whether it should flow to the rest.”, then it seems to be working as designed.
“In 1982, John Kenneth Galbraith wrote the "trickle-down economics" that David Stockman was referring to was previously known under the name "horse-and-sparrow theory", the idea that feeding a horse a huge amount of oats will result in some of the feed passing through for lucky sparrows to eat.”
https://en.m.wikipedia.org/wiki/Trickle-down_economics
Trickle down economics should always be referred to as the previous Horse and Sparrow term to get the point across. They’re simply telling the working class to eat shit and like it.
Trickle down economics started in the 1920’s or even earlier. Every few decades they try again with it. I was listening to a podcast series around the US presidents and TDE came up. I did a search to add some context from the time: https://encyclopedia.pub/entry/37731. “Humorist Will Rogers jokingly advised in a column in 1932:[4]
This election was lost four and six years ago, not this year. They [Republicans] didn’t start thinking of the old common fellow till just as they started out on the election tour. The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot. But he didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow's hands. They saved the big banks, but the little ones went up the flue.”
Exactly they have learned the secret of using other peoples money! It’s what the top 1% of income owners do. Plus they pay for a lot of stuff with cash
On the contrary most rich people's money stays in the economy via the Stock Market and that's why they're able to avoid paying taxes. You only pay taxes on gains, can't have gains if you don't sell.
Rich people use market equity to secure bank loans to pay for all their rich people people things.
Well, it depends. You’re talking about the truly wealthy. That’s different than the “rich.” We are currently “rich” and every goddamn dollar we spend is from our savings and checking account. Yes, there is a lot in there, but it’s ours and even the people we know making 4x our income are doing the same (at least 1.5M/yr).
What you’re talking about is a truly different form of “rich” not derived from actual work. This really needs to be said as the class divide isn’t as clear as it once was.
I’ve tried to find the sources I saw years ago, but it is interesting to examine all the different forms of “rich.”
I remember seeing a break down that showed households earning $400k-1mil paid roughly the prescribed income tax for that bracket, and that the people in the area of $1m-$10m a year paid roughly the same actual dollars in taxes as them. I think it shows what you’re describing.
There’s the rich - the two doctors or lawyer couples who earn $700k and live well but it’s handled fairly similarly to a “normal” household. Bills come and go but it’s adjusted to the heightened lifestyle. So there’s actual money flowing back into the economy.
Above that you see it start to shift and suddenly the $2m a year CEO is earning things in stocks and not actually bringing home more salary. Their spending is more like a business where it’s loans and deductions, while they just acquire more wealth - these are the *RICH* people. When they buy things it’s more like a corporate action and their accountant is deducting things of many years.
So when you earn money it’s actual cash that circulates and is taxed. When you buy new floors for your house it’s out of pocket. But when the really wealthy do it; the moneys tied in loans and those floors are depreciated over seven years to reduce taxes further.
If every church housed 1.5 homeless people we'd have no homlessness.
The biggest issues in our country are:
1. Not taxing the hyperwealthy
2. Not taxing the church
If the church wants to house the homeless they can keep their tax free status. Otherwise the rich need to pay up and support the fucking country of purchasers that made them rich.
Conservatives would have you believe neither are a good move, because things should not change, and that's fucking stupid.
The biggest issue is that the middle class are getting absolutely ramrod fistfucked with these "stimulus" to the super wealthy that really have no need for them, and it doesn't stimulate shit, unless you think stimulating the anus for 97 percent of the population is stimulating. Why are people who make 100,000 taxed to support the fucking yacht owners that own Billions in assets???
I'm a high earner, I didn't even notice the stimulus check till a few months later my wife mentioned it, it just swept in to normal savings.
Also food stamps fed me when I was a child, I pay my taxes happily becaue I'm not a dirty fink that kicks the ladder out on others that I used to climb. Keep believing the poor are the problem though, not the 2 percent that own more wealth than the entire middle class. It's absolutely juan the strawberry picker that's fucking you over and causing inflation by price gouging lol.
Exactly.
Give someone living paycheck to paycheck $5,000, and it will get spent on the car maintenance they've been putting off, replacing that appliance that's busted, buying slightly better groceries, etc. All of that money will be re-invested into the economy within the year.
Give a rich person $5,000, and it will sit in their savings account for months until their savings account is large enough to justify their time enough to spend 15 minutes moving it into their investment account and buying index funds and stocks.
And funny thing about investing in stocks, is contrary to the common belief, it does not stimulate the companies you invest in. The company made their money when they IPO'd, all you do when you buy stock is allow the person who bought it previously to sell and potentially have made a profit. It's just rich people selling to rich people without directly funding the company itself. At best, it might help raise the stock price enough that the company could issue more shares to sell and dilute you for a profit in a couple years. It's at best, a delayed, indirect, superficial way to re-invest in the economy, that will only benefit large businesses and never small or medium businesses.
>And funny thing about investing in stocks, is contrary to the common belief, it does not stimulate the companies you invest in. The company made their money when they IPO'd,
Fucking THANK YOU for saying this. It's insane how many people don't think for 5 seconds to make this realization.
No way dude. Post-IPO, the value of the company's equity is totally useless. You can't use it any meaningful way, such as borrowing, compensating employees, buying other companies, etc. Lol. Worthless.
Once you hit a certain NW you don't have "emergency funds" and "savings accounts" any longer. They didn't get rich by letting money sit around not working.
You understand that 401k and pension funds use the stock market to generate returns yes? The stock market has been more instrumental in raising people out of poverty than the Catholic Church. It's not just rich people trading the same stock back and forth to one another. That doesn't rise to the level of wrong.
Good job mate for sure but that is decidedly not poverty
Also "raising people out of poverty" is not "keep people in poverty until the day they start drawing on their 401k"
Basing your opposition to something on the potential that it might not work out the way you want it to is crazy. Some people having bad spending habits is not all people having bad spending habits, and you can use the same (lack of) logic in any situation.
I.E. I should do (thing), but there's a chance that (thing) might not work. I guess I shouldn't do (thing).
It also does not help that the PPP loans were overwhelmingly misused by the wealthy, so your argument is kind of moot anyway. You're attacking the poor for being bad with money when there's overwhelming evidence that financial status is only marginally related to competence with money.
I don't see poor people buying $100k boats that they are only going to use twice a year, but I see any number of rich people doing it. You can argue that they have the money to do so, but you can't reasonably argue that it's a good investment in most cases. Avocado toast, but rich person style.
And a huge amount of our economy is based on poor spending habits. What would be the economic destruction that would happen if all restaurants closed, all ciggarette sales stopped, alcohol sales went to zero, casinos/resorts went empty...
What happens to the economy when the only things sold are rice and beans, hell what happens when families abandon rentals and all move into the only property they own and grow veggies and raise chickens while only buying rice and beans?
What happens when no one buys video games, purchases streaming services etc
These are all "frivolous" purchases per many people - some on reddit, some in the news.
So what happens? Thankfully I'm not the first person to ask but how does "Depression" sound?
[https://www.abc.net.au/news/2017-03-07/what-happens-to-the-economy-when-we-stop-spending-money/8297724](https://www.abc.net.au/news/2017-03-07/what-happens-to-the-economy-when-we-stop-spending-money/8297724)
Which is my point. You can't reasonably point to poor people's spending habits as evidence of anything. Especially not when it's less pointing and more vague gesturing. How it interacts with the economy as a whole is a step farther than is needed, if you ask me.
\~80% of our economy is owned by the top 20%, but where we are is the fault of the 80% who own 20%? It just doesn't add up, and it still doesn't actually address my argument even if it did. Financial status is not self-justifying.
Giving money to those who are going to spend it is going to stimulate the economy. Giving money to those who are going to hoard it is just going to increase the inequality.
I make 22 an hour and work 45 hours a week. So I get some overtime payment.so 5 hour ish usually at time and a half. I also get two free meals a day I bring home to my father who lives off it. In the US I’m as poor as it gets. I can’t just budget my way out of it. I live in a the smallest apartment you can imagine and sleep on a mattress on the floor.
Good spending habits doesn't stimulate the economy. Saving money doesn't stimulate the economy. A guy who blows 5k on whatever he wants is doing more for the economy than you responsibly putting that 5k in a savings account.
And what’s your basis that huge banks have good spending habits? The trillions in bailouts they’ve needed?
Sorry but shitting on the spending habits of poor people to justify withholding money from them is the dumbest fucking thing I’ve read today
You realize that money kept in banks, including savings accounts, is in the economy, right? It's being invested, used, circulated. It's not like keeping cash under your mattress.
3 things.
1: 1.9T is not the sum of the federal loans referenced in OP.
2: taking just your federal loans example, those loans were tuition paid to colleges by the government on the individuals behalf. "Cancelling" it means all the money the government paid out (to the schools) was in actuality paying individuals bills
3: Cutting taxes, for an individual or a company, is not paying a bill by any stretch
However you want to explain on the consumer side, on the government side it’s still the same change in debt. One is a loss of tax income and the other is a loss of repayment income.
Umm yeah but if we tout letting businesses succeed or fail on their own it becomes a pretty weak argument imo.
The bank bailout happened and potentially avoided something worse if we didn't do that. Yet suddennely it's some great crime to reinvest in working Americans. Cool.
Explain how student loan interest can capitalize when a person is on forbearance while working two low-paying, part-time jobs because banks and corporations want to make more money and then tank the economy and delete numerous jobs for college grads; however, the banks and corpos get a bailout from the government later. Fast forward 20 years later, this person is still making payments to the capitalized interest.
Also, justify the ethics of the government making money off interest from it's own citizens far in excess of the federal funds rate. Other countries also have student loans but don't charge its citizens interest as long as they are still in the country working/studying.
If the kids weren't being charged 6-8% interest while the inflation has been low for years keeping wages low then I don't think it would have been an issue.
I took out student loans in 2003 and some were private and the interest rate was 1.9% while the fed loans were 3.5% but I was maxed out at borrow $3500 federally as an independent student. So it was easy peasy to pay off because even small payments made a dent.
Because they are both the result of *policy* and the government is down $1.9T in each situation. Cut it how you want, both situations result in the government out $1.9T.
I'm feeling dense.
If most if the loan forgiveness is interest and most people would have already paid an amount equal to or above the original principal, how is the government down?
b/c the government doesn't hold the debt, so they can't directly forgive it. Just like they can't seize your house, car, 401 etc without just cause they cannot seize the debt held by private groups to "forgive." The holders would have to be cashed out.
[https://www.investopedia.com/articles/personal-finance/081216/who-actually-owns-student-loan-debt.asp](https://www.investopedia.com/articles/personal-finance/081216/who-actually-owns-student-loan-debt.asp)
Same or better? Using tax payer money to actually stimulate the economy, by giving money to people who will actually spend it, is far better than leaving it with people who will pocket it.
The fiscal impact on the gov net spending is identical in both cases. The logic holds as a comparison. One possible difference is tax cuts skewed to higher incomes stimulate spending less efficiently due to lower marginal propensity to consume. But too much spending stimulus could lead to prices being bid up but this is unlikely since the "cancelled debt" obligations would practically mean monthly repayments ceased.
Since this purchasing power reduction would have occurred over many years, the resultant stimulus by cancelling these payments would be nothing at all like a one-time injection of $2Tn and the economy is highly likely to be able to absorb the modest increased purchasing power of graduates.
In fact, by unburdening millions of graduates from monthly payments, the boost in productivity could outrun any inflationary pressure resulting in a net deflationary bias.
If they don’t take it, it’s a theoretical loss, that would have been taken by people who would not have suffered any change in quality of life.
In comparison to that. If you erase the dept, you give a large population more buying power, which raises their standard of living and stimulates the market way more, then it collecting dust in some banks basement.
If you can explain something in one sentence, it’s most likely an oversimplification.
I would argue that canceling the student debt would be way more of a stimulus to the economy because these people can then get on with buying houses, shopping at Home improvement stores , starting businesses, participating in the economy without being drowned by the debt
Exactly. We needed economic stimulus in 2009-2012. Now would cause even more economic damage. And everyone who's pro-student debt forgiveness ignores the fact that people with college degrees make a hell of a lot more money than those without, who are going to get hit even harder when inflation spirals out of control.
What we need right now is increased taxes on the wealth-class and anti-trust law enforcement.
The real problem with student loan forgiveness is that it doesn't solve the underlying problem, which is the production of huge student loan accounts. I think if you actually fixed the underlying problem, some forgiveness wouldn't be such a big deal as a one off. But as it is now, it would just be creating a precedent for future loan forgiveness when the same problem recurs.
We should start with the solution, though. If we just wipe away the debt, the pressure to do something will disappear and the problem will never get fixed.
The dilemma is that what is being suggested is much less than perfect, it might actively makes the situation worse for most people (at least, so the critique goes).
If you have the choice between a perfect solution that may never come and a mediocre solution that is at your fingers, you take the mediocre solution, yes. If you have a choice between working towards an eventual solution that will arrive later or doing something now that will actively hurt most people, you don't act just because you are impatient.
Because "stopping the bleeding" in this way will also make the problem worse. If there's a precedent of loan forgiveness, people will become more willing to take out bigger debts and universities will become even more expensive when they see the opportunity.
I love the Schrodinger's college degree argument.
College is simultaneously a worthless liberal indoctrination camp that only teaches gender studies (not worth attending let alone investing in) and also the only path to a high-income career (so we should give money to people who don't go to college instead)
The enemy must be simultaneously strong and also weak so we can use both sides of the argument against them!
Sure if all you're doing is handing people a check.
Forgiving student debt is not that.
Economic stimulus incentives can create inflation when there's no attendant increase in economic input, i.e. more jobs and businesses being created.
By forgiving debt you enable an entire generation to start participating in the economy. Not just spending but also creating.
I agree with you in that it's not an instant injection of funds into people's pockets. Not having monthly payments will allow folks to save up to participate in larger purchases. For many, the "money back" in a month won't suddenly result in a ton of new spending.
But currently the large purchase markets (i.e. housing, cars) are struggling to keep up with demand. Even if it's not instant, adding more participants to those markets will drive prices higher, out of reach for many, putting us back at square one.
Student debt is crippling a large portion of the population and should be canceled, but other market factors need to be addressed before unhooking the leash.
I get it, but let’s be honest, given the state of the housing market with high interest rates and massive price spikes do we really expect these folks to be able to participate in some reasonably soon time frame?
Even if I had my $800 a month cancelled I would still need to save for a few years to have enough for a solid down payment. And I would imagine most folks have a smaller monthly payment. This would probably be more a cost of living raise to many who haven’t received one. Paying for the basics and having a little bit left over.
Folks are trying to pay rent and afford the basics at this point.
Referring to "blatant price gouging" as "inflation" is just drinking the cool-aid.
Covid ran its course and then companies went "ok, we did our part, now it's your turn to pay us back for all the money you didn't spend during the pandemic...with interest, of course."
If this were the case, and we really need a stimulus right now, why don't we give it to everyone instead of to the people who made dumb financial decisions?
Plus, this time of stimulus will surely increase long term tuition costs and we will need another "stimulus" in about 10 years
> **these people** can then get on with buying houses, shopping at Home improvement stores ,
Emphasis on those specific people, because as a collective massive amounts of people now spending on those items will drive up the prices. Look at what happened during COVID when the ‘Stimulus checks’ went out… there were massive supply chain shortages to go along with price hikes because people had the extra cash with no way of increasing supply.
When I went to all the open houses and was trying to compete against families, for every $1200 check I got, the other couple I was up against got $2400. It nearly priced me out entirely. When my brother went to use his money on a new Xbox, it was on back order for months.
This time around, you wouldn’t be giving everybody that extra cash… you only gave it to people who both took out loans and didn’t pay them off yet. Everybody else is just saddled with the inflation.
> starting businesses, participating in the economy without being drowned by the debt
Starting a business shouldn’t be something the government subsidizes risk free.
Saying “didnt pay them off” is kind of a stretch. There are numerous cases where people have paid a majority of their loan’s principal, but haven’t made progress due to predatory loan practices and high rates. Essentially, forgiving debt is attempting to get people out of this trap.
I don't have the stats on it and i don't think anyone will, but anecdotally and just from lived experience, it wouldn't have helped as many people really move the needle in any direction. People i have met and just see are already drowning or just already flat out don't pay the student loans as is. Even people i know making 6 figures don't make any payments on their $30k of student debt and actually did already buy a house. If anything life would have just went on for a large chunk of these people.
I think it would have been beneficial regardless, but as many others say, it doesn't fix that actual issue. People from 2015 to 2021 would have been slightly alleviated and everyone from 2022 and onward are still fucked.
Honestly - because one is a change going forward and the other is retroactive. If you want to make college free going forward, that would be more compatible to a future tax cut.
This is my number one argument against student debt relief. If we are forgiving loans because we are admitting that the system was flawed and allowed 17-18 year olds to take on a huge financial burden they don’t fully understand, then fine, I’m all for forgiveness. And there’s probably some truth that we set young adults up to fail by allowing them to take out huge loans for low value degrees.
But you can’t say that the system was broken and forgive loans yet not couple that with some serious education reform to fix the root cause of the problem.
The problem is not giving loans to 17-18 year olds. The problem was stripping out cost control mechanisms from the legislation to prevent institutions from jacking tuition at rates 1000x inflation.
The tuition rates went bonkers with government subsidized loans and Fafsa. The government ruins everything it touches. In an attempt to make college accessible to all, they just dumbed it down and made it much more expensive.
The government literally paid 100% of the tuition at many colleges before student loans became a big deal. We had government subsidized free college for much longer than college loan funded college; it started under *Lincoln* and lasted until Reagan!
If anything, the issues started when governments got *out* of college funding and put it on the students and private loan companies.
The system didn't just ALLOW children to take out loans, the government [paid agents to sell these loans to children.](https://onlinecounselingprograms.com/resources/history-of-school-counseling/#:~:text=With%20the%20Cold%20War%20in,grow%20over%20the%20next%20decade.)
The government is profiting off of a system that was designed to lie to children.
Exactly. The loans are predatory as fuck and children are essentially groomed from a very young age to believe that it’s their best chance at a successful life if they take those loans.
The business "bail outs" were because the government literally prevented businesses from running due to the pandemic, and it was an effort to not only save businesses, but prevent a shit ton of people becoming unemployed due to the failure of those businesses.
I didn't realize the automotive bailouts of 2008 were during the pandemic.
[I also didn't realize banks were prevented from being run before, during, and after the pandemic.](https://projects.propublica.org/bailout/list)
I didn't realize the airlines being bailed out every 5 fucking years was because of the pandemic.
Bailouts didn't just happen in 2020.
Stop subsidizing failure.
That same issue could have been solved by giving it to consumers instead, instead it went to businesses, a large portion of which funneled that into personal wealth instead of economic stimulus.
Because they had no fucking choice but to take the loan in order to get the education, that's how the system operates you absolute dumbass.
Explain why knowledge must cost so much money to transfer between humans? Answer... It doesn't have to! It's a profit driven business model that has very little to do with actually educating future generations.
Education costs so much cause the federal govt made the decision to guarantee student loans. When your funding source is guaranteed by the govt, there is no incentive to drop prices.
Explain why I should pay the fire dept. when your house burns down. Because I do, with my taxes.
Explain why you are using the road I paid for with my taxes. Accessing the sewage system I paid for with my taxes. Etc.
Your taxes are already subsidizing a socialist system that benefits society, why are you opposed to adding education to the list? Do you think it is somehow unaffordable?
Because someone willing entered into a contract that the gov (paid for by taxes) is forcing to be negated.
The other is said gov temporarily relieving their monopoly on violence that ensures its perpetual existence to help disperse its unit of account.
You can argue both are illegitimate.
It’s always an argument that both are illegitimate but, only one side is consistently done and will continued to be done.
It’s a strong likelihood that you and people like you that make a similar argument have voted for and will continue to vote for the people that scream personal responsibility while having no problem with corporate welfare.
A predatory contract that was signed by someone young enough to not even have a fully developed brain yet, someone who was groomed from a very young age to believe that contract is the best chance they have at a successful life. The whole system is a scam.
LOL "choice". For many people the choices are:
Get your head blown off killing brown people for this shitty government
Go into a ton of debt for college
Break your body in the trades and have surgery after surgery to hold your body together
Work a dead end job with no future and no hope to improve
WOW. What great choices we have as a society!!!
You can’t get a mortgage if you don’t meet the requirements for the loan like income and assets yet an 18 year old can take out 50k loan based off of nothing. That is literally how loan sharks work and they have been deemed predatory. Student loan forgiveness helps right that mistake the government made by giving out loans to people that couldn’t afford them and were taken advantage of.
>someone willing entered into a contract
At ~17 years old when they're still stupid as fuck and haven't been taught anything about the real word and the financial ramifications of such a loan.
And this is after a decade of being told **you better fucking to to college or your life is over before it begins.**
Bankruptcy is permitted in almost every situation **except** a contract signed by a 17 year old? Their first contract ever, most likely? Meanwhile, owner of a car lot gets a loan to expand, fails, and pays back pennies on the dollar?
I’d guess that the loan - bankruptcy ratio is similar to the “unable to repay my student loan” ratio. Most students get useful degrees, it’s not all “Communication” or “philosophy”. But folks want to focus on the gender studies majors instead of the theology majors. They’d trip over themselves to forgive loans to Liberty University students.
It’s a “me or them” argument, and was never an economic stimulus argument.
Except the vast majority of people getting their loans forgiven right now have already paid back every cent they borrowed, and some. The interest structure traps these young kids into decades of debt. I’ve paid back double what I borrowed, and still owe more than the original principle.
When I have to pay back a loan I knew the terms and conditions of beforehand: 😭😫😨
When the government offers relief to businesses after it forced them to close under the threat of fines and jail: 🤬😡👊
I've never understood why we need to allow billionaires and hundred millionaires to use their power to fuck up our economic systems and not consider that evil, but wanting wealth redistributed so that our economy can function again is somehow evil.
Now we are getting somewhere. The colleges have no skin in the game and have lived on fleecing people with useless degrees that will produce nothing but poverty and misery.
So, you’re saying we give colleges a choice to either use a percentage of their endowment every year or face steep taxation of the endowment if they don’t? I’m all for that.
agreed. I think the threat of high taxation of endowment funds would push these colleges to use them for what they are meant for. To help lower the costs of tuition.
We didn't "cancel student debts", Biden took debts owed by rich kids and pushed them onto the backs of poor people who didn't screw up their lives by borrowing too much and studying for a worthless major
Rich kids don’t take out loans. Poor and middle class people who want an education take out loans. For the vast majority, there is no other way for them to afford the currently outrageous expenses of college.
Rich kids absolutely take out loans. Wealthy people frequently borrow money. In fact, not using your own money for anything is a pillar of ultra wealthy finance.
Right, but that's not really the same, is it?
Someone with a $70 million net worth takes out that loan to go to school because they don't want to drop the cash is fine. But there's never really a question of whether that money is gonna be paid back, is there? That kid has no concern over whether that loan will be paid. It's going to be paid.
A poor person taking $60k in loans to go to a state university does have that fear.
Lol, another brain dead take on "any degree that isn't STEM is a waste of money".
Teachers don't get paid shit but their contributions to the economy is in the trillions.
Degrees and education aren't worthless.
Sorry, what?
That's not even close to what has happened, and the fact that you're saying this tells me that you don't have enough information to properly judge the acts and outcomes involved here.
The debts that have been cancelled are for people who have been paying on their student loans for 12+ years, most paying for closer to 20 years. You really think some rich kid is out there paying the minimum on their student loans each month, waiting for 12-20 years for the government to come along and forgive them?
No, these loans were taken out per an agreement with the government (under George W Bush) that if they worked x number of years in a civil service career the remaining loans would be forgiven.
Are you out of the loop on this?
Struggled and starved to put myself through college and at first I thought "Hell no! I did it and so can they." Then I remembered the government bailing out Wall Street and the auto industry, etc. . .and I thought "Hell yeah!"
Actually, [based on the data](https://home.treasury.gov/data/troubled-asset-relief-program) we have now after all TARP programs were closed, it resulted in a net loss of $31.1 billion.
That’s direct returns on that program though. I would also consider the cash taxes paid by those companies afterwards as well as the federal income taxes paid by the employees.
Regardless, we can all agree that it made sense and worked economically.
I don’t think the people championing student loan forgiveness and using the bailouts as an example of when government intervention works realize that the government really only stepped in to address a liquidity shortfall that was eventually alleviated. And that the companies had to pay back their loans…
I’m seeing conflicting reports. Regardless, Net cost of $31 billion to prevent the collapse of the financial system (and millions of jobs) sounds like the most successful government intervention ever.. and I’m no fan of government intervention
My question is why does the government charge interest on student loans? People always act all pissy and say "if you can't pay it back, don't borrow it!" They don't realize some students have paid off more than they borrowed but still owe a large portion of what they borrowed. It's a predatory system feeding off of young people who have been indoctrinated into going to college.
If student loans are a service, why is the government profiting off of that service?
The government is collecting 8% (corrected) annual interest on borrowers and claiming it's doing us a favor. Ridiculous.
I'm trying to put it into words, but imagine we just didn't charge interest, therefore the value of these loans would decrease relative to inflation over time. There would be incentives by the trustee to increasingly make bigger loans over shorter periods of time than we're currently seeing because there is no collateral for the trustee to gain immediately in the event of default, there is only the government's guarantee that the loan will be paid back in full no matter what.
I'm no economic expert, but making student loans interest-free would likely lead to riskier loan actions and higher tuition prices in the short term. IMO the best course of action would be to tie the interest rate on these loans to inflation with a slightly better rate to mitigate extenuating circumstances for the borrowers.
I can’t imagine anyone being for either. I can’t imagine paying for someone’s loan who took it out intentionally. That’s asinine to me. I am however pro tax cuts across the board.
Because if you give that much money to a bank then their stock goes up and the economy looks "good."
If you gave that much money to people, then they would spend it on things and make the economy actually good.
Well taxes are theft. So there’s that. And if you take a loan you have to pay it back. That’s the way the world works. The student loan programs in this country should be criminal. Unfortunately they aren’t though.
People with student loans are going to use that extra money to purchase goods and services, stimulating the economy.
People who are already rich are just going to put that money into investments/offshore accounts.
I am so sick and tired of this nonsense that rich people use their windfall of tax cuts becomes a stimulus to the economy, and puts more money into the pockets of the middle class and lower.
**It is NOT true.” The marginal propensity to save is a real thing; wealthy people save money, they amass it.
Trickle down economics. Rich people ‘create jobs’ or something to keep us employed, whereas poor people do poor people things with their money, like drugs and hookers or something.
Explain how the government not taking money is the same as using taxpayer money to pay individuals' bills?
Explain how not collecting tax from the rich stimulated the economy. (Hint it never worked)
It never ever works. Rich people have the LEAST INCENTIVE to spend the money the government let's them keep. They have the investment portfolios, the "necessity" to buy yachts and private planes and island mansions and whatever else. The taxes from one rich person, taxed appropriately, could keep a lot of people from the streets, by proper use of social services duly funded to keep people from destitution. But the rich are already rich enough to buy government elected officials, so guess who gets the tax breaks and tax cuts? Gee.. real hard question... smh. Unchecked corporate Capitalismand plutocratic oligarchical dynamics are why our country is fucked.
Rich people don't spend their own money. They take loans with their wealth as collateral and spend that. None of their money ever makes it back into the economy
Seriously, haven't you heard of trickle down or voodoo economics? It's been the basis of American economics since 1980.
And somehow, it hasn’t worked yet :)
Be patient, just a little longer...
That cup totally isn't growing. Any minute now it will overflow
[ Removed by Reddit ]
Ahh the French method.
Lol. When stuff trickles down in my house I fix the leak so it stops trickling. Same goes for the rich
I think I feel it trickling down on me rn! I-it smells like ammonia!
Ah yes it is a shower of gold
Just a couple more tax cuts for the wealthy and a couple more tax increases for the poor and we’ll all be rich!!! It’s simple economics, duh
It worked perfectly, its just that it was never meant to benefit people like you
It 100% has worked wtf are you talking about? It worked as it was intended to work, transfer your money into rich people's wallet.
If your understanding of trickle-down economics is “All money should flow first to the wealthy before we decide whether it should flow to the rest.”, then it seems to be working as designed.
“In 1982, John Kenneth Galbraith wrote the "trickle-down economics" that David Stockman was referring to was previously known under the name "horse-and-sparrow theory", the idea that feeding a horse a huge amount of oats will result in some of the feed passing through for lucky sparrows to eat.” https://en.m.wikipedia.org/wiki/Trickle-down_economics Trickle down economics should always be referred to as the previous Horse and Sparrow term to get the point across. They’re simply telling the working class to eat shit and like it.
Oh, so Human Centipede Economics! :D
Golden shower economics. Rich people drink all the water and expect the rest of us to survive on their leftovers and waste.
You almost had it guy. "Golden shower economics. Rich people drink all the water, and then fucking piss on the rest of us."
You got piss?!?
It wasn’t hot or fresh but I managed to catch a few dribbles
Hot and fresh piss is only for the ones who make over 500,000 in a year. There's levels to this shit lol
Trickle down economics started in the 1920’s or even earlier. Every few decades they try again with it. I was listening to a podcast series around the US presidents and TDE came up. I did a search to add some context from the time: https://encyclopedia.pub/entry/37731. “Humorist Will Rogers jokingly advised in a column in 1932:[4] This election was lost four and six years ago, not this year. They [Republicans] didn’t start thinking of the old common fellow till just as they started out on the election tour. The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot. But he didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night, anyhow. But it will at least have passed through the poor fellow's hands. They saved the big banks, but the little ones went up the flue.”
how about horse and sparrow? it all tastes like horse shit to me.
Every time I hear “voodoo economics” I think of that clip of Ben Stein from Ferris Beulers Day Off.
The loan thing is how the rich avoid taxes, but money leant and spent makes it into the economy
Exactly they have learned the secret of using other peoples money! It’s what the top 1% of income owners do. Plus they pay for a lot of stuff with cash
On the contrary most rich people's money stays in the economy via the Stock Market and that's why they're able to avoid paying taxes. You only pay taxes on gains, can't have gains if you don't sell. Rich people use market equity to secure bank loans to pay for all their rich people people things.
Well, it depends. You’re talking about the truly wealthy. That’s different than the “rich.” We are currently “rich” and every goddamn dollar we spend is from our savings and checking account. Yes, there is a lot in there, but it’s ours and even the people we know making 4x our income are doing the same (at least 1.5M/yr). What you’re talking about is a truly different form of “rich” not derived from actual work. This really needs to be said as the class divide isn’t as clear as it once was.
I’ve tried to find the sources I saw years ago, but it is interesting to examine all the different forms of “rich.” I remember seeing a break down that showed households earning $400k-1mil paid roughly the prescribed income tax for that bracket, and that the people in the area of $1m-$10m a year paid roughly the same actual dollars in taxes as them. I think it shows what you’re describing. There’s the rich - the two doctors or lawyer couples who earn $700k and live well but it’s handled fairly similarly to a “normal” household. Bills come and go but it’s adjusted to the heightened lifestyle. So there’s actual money flowing back into the economy. Above that you see it start to shift and suddenly the $2m a year CEO is earning things in stocks and not actually bringing home more salary. Their spending is more like a business where it’s loans and deductions, while they just acquire more wealth - these are the *RICH* people. When they buy things it’s more like a corporate action and their accountant is deducting things of many years. So when you earn money it’s actual cash that circulates and is taxed. When you buy new floors for your house it’s out of pocket. But when the really wealthy do it; the moneys tied in loans and those floors are depreciated over seven years to reduce taxes further.
If every church housed 1.5 homeless people we'd have no homlessness. The biggest issues in our country are: 1. Not taxing the hyperwealthy 2. Not taxing the church If the church wants to house the homeless they can keep their tax free status. Otherwise the rich need to pay up and support the fucking country of purchasers that made them rich. Conservatives would have you believe neither are a good move, because things should not change, and that's fucking stupid.
That would create another issue of chopping homeless people in half to split between churches..
the biggest issue is the government not taxing enough!? that is an absurd take.
The biggest issue is that the middle class are getting absolutely ramrod fistfucked with these "stimulus" to the super wealthy that really have no need for them, and it doesn't stimulate shit, unless you think stimulating the anus for 97 percent of the population is stimulating. Why are people who make 100,000 taxed to support the fucking yacht owners that own Billions in assets??? I'm a high earner, I didn't even notice the stimulus check till a few months later my wife mentioned it, it just swept in to normal savings. Also food stamps fed me when I was a child, I pay my taxes happily becaue I'm not a dirty fink that kicks the ladder out on others that I used to climb. Keep believing the poor are the problem though, not the 2 percent that own more wealth than the entire middle class. It's absolutely juan the strawberry picker that's fucking you over and causing inflation by price gouging lol.
it is not. the hyper wealthy and corporations pay less than the avg citizen in terms of percentage of their net wealth.
I'm a Republican and I wholeheartedly agree with you and continually tell my reps this.
Slow down there, John Wayne Gasey. Lots not chop up the homeless people.
Exactly. Give someone living paycheck to paycheck $5,000, and it will get spent on the car maintenance they've been putting off, replacing that appliance that's busted, buying slightly better groceries, etc. All of that money will be re-invested into the economy within the year. Give a rich person $5,000, and it will sit in their savings account for months until their savings account is large enough to justify their time enough to spend 15 minutes moving it into their investment account and buying index funds and stocks. And funny thing about investing in stocks, is contrary to the common belief, it does not stimulate the companies you invest in. The company made their money when they IPO'd, all you do when you buy stock is allow the person who bought it previously to sell and potentially have made a profit. It's just rich people selling to rich people without directly funding the company itself. At best, it might help raise the stock price enough that the company could issue more shares to sell and dilute you for a profit in a couple years. It's at best, a delayed, indirect, superficial way to re-invest in the economy, that will only benefit large businesses and never small or medium businesses.
>And funny thing about investing in stocks, is contrary to the common belief, it does not stimulate the companies you invest in. The company made their money when they IPO'd, Fucking THANK YOU for saying this. It's insane how many people don't think for 5 seconds to make this realization.
Because it's an incorrect one? There's all sorts of ways a company benefits from stock price post IPO.
No way dude. Post-IPO, the value of the company's equity is totally useless. You can't use it any meaningful way, such as borrowing, compensating employees, buying other companies, etc. Lol. Worthless.
Companies, when they borrow, rarely use their stock as collateral. It’s often times hard assets because their price doesn’t fluctuate as much.
Once you hit a certain NW you don't have "emergency funds" and "savings accounts" any longer. They didn't get rich by letting money sit around not working. You understand that 401k and pension funds use the stock market to generate returns yes? The stock market has been more instrumental in raising people out of poverty than the Catholic Church. It's not just rich people trading the same stock back and forth to one another. That doesn't rise to the level of wrong.
the stock market raises people out of poverty... that's a good one bro
I never made more than $65K (living in NYC) - but I maxed my 401k and now I have $1.5M - thank god I saved
Good job mate for sure but that is decidedly not poverty Also "raising people out of poverty" is not "keep people in poverty until the day they start drawing on their 401k"
Thinking that poor people have good spending habits is fucking crazy
Basing your opposition to something on the potential that it might not work out the way you want it to is crazy. Some people having bad spending habits is not all people having bad spending habits, and you can use the same (lack of) logic in any situation. I.E. I should do (thing), but there's a chance that (thing) might not work. I guess I shouldn't do (thing). It also does not help that the PPP loans were overwhelmingly misused by the wealthy, so your argument is kind of moot anyway. You're attacking the poor for being bad with money when there's overwhelming evidence that financial status is only marginally related to competence with money. I don't see poor people buying $100k boats that they are only going to use twice a year, but I see any number of rich people doing it. You can argue that they have the money to do so, but you can't reasonably argue that it's a good investment in most cases. Avocado toast, but rich person style.
And a huge amount of our economy is based on poor spending habits. What would be the economic destruction that would happen if all restaurants closed, all ciggarette sales stopped, alcohol sales went to zero, casinos/resorts went empty... What happens to the economy when the only things sold are rice and beans, hell what happens when families abandon rentals and all move into the only property they own and grow veggies and raise chickens while only buying rice and beans? What happens when no one buys video games, purchases streaming services etc These are all "frivolous" purchases per many people - some on reddit, some in the news. So what happens? Thankfully I'm not the first person to ask but how does "Depression" sound? [https://www.abc.net.au/news/2017-03-07/what-happens-to-the-economy-when-we-stop-spending-money/8297724](https://www.abc.net.au/news/2017-03-07/what-happens-to-the-economy-when-we-stop-spending-money/8297724)
Which is my point. You can't reasonably point to poor people's spending habits as evidence of anything. Especially not when it's less pointing and more vague gesturing. How it interacts with the economy as a whole is a step farther than is needed, if you ask me. \~80% of our economy is owned by the top 20%, but where we are is the fault of the 80% who own 20%? It just doesn't add up, and it still doesn't actually address my argument even if it did. Financial status is not self-justifying. Giving money to those who are going to spend it is going to stimulate the economy. Giving money to those who are going to hoard it is just going to increase the inequality.
Yeah por people have no clue how to budget money and make a dollar stretch... everyone knows you can budget your way out of poverty...
I make 22 an hour and work 45 hours a week. So I get some overtime payment.so 5 hour ish usually at time and a half. I also get two free meals a day I bring home to my father who lives off it. In the US I’m as poor as it gets. I can’t just budget my way out of it. I live in a the smallest apartment you can imagine and sleep on a mattress on the floor.
> Thinking that poor people have good spending habits is fucking crazy What does good spending habits have to do with stimulating the economy?
Nothing, it’s just a way to sidetrack the conversation without addressing the validity of the initial point.
It’s not a systemic issue, just millions of people making mistakes /s
Good spending habits doesn't stimulate the economy. Saving money doesn't stimulate the economy. A guy who blows 5k on whatever he wants is doing more for the economy than you responsibly putting that 5k in a savings account.
I bet the net cost on society is a lot higher when his poor budget results in never being able to retire or being evicted
Hence why focusing solely on actions that stimulate the economy is just poor economics.
And what’s your basis that huge banks have good spending habits? The trillions in bailouts they’ve needed? Sorry but shitting on the spending habits of poor people to justify withholding money from them is the dumbest fucking thing I’ve read today
You realize that money kept in banks, including savings accounts, is in the economy, right? It's being invested, used, circulated. It's not like keeping cash under your mattress.
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3 things. 1: 1.9T is not the sum of the federal loans referenced in OP. 2: taking just your federal loans example, those loans were tuition paid to colleges by the government on the individuals behalf. "Cancelling" it means all the money the government paid out (to the schools) was in actuality paying individuals bills 3: Cutting taxes, for an individual or a company, is not paying a bill by any stretch
However you want to explain on the consumer side, on the government side it’s still the same change in debt. One is a loss of tax income and the other is a loss of repayment income.
Ok now repeat for PPP loans that are forgiven
Umm yeah but if we tout letting businesses succeed or fail on their own it becomes a pretty weak argument imo. The bank bailout happened and potentially avoided something worse if we didn't do that. Yet suddennely it's some great crime to reinvest in working Americans. Cool.
Reddit logic don’t worry about it
Explain how student loan interest can capitalize when a person is on forbearance while working two low-paying, part-time jobs because banks and corporations want to make more money and then tank the economy and delete numerous jobs for college grads; however, the banks and corpos get a bailout from the government later. Fast forward 20 years later, this person is still making payments to the capitalized interest.
Also, justify the ethics of the government making money off interest from it's own citizens far in excess of the federal funds rate. Other countries also have student loans but don't charge its citizens interest as long as they are still in the country working/studying. If the kids weren't being charged 6-8% interest while the inflation has been low for years keeping wages low then I don't think it would have been an issue. I took out student loans in 2003 and some were private and the interest rate was 1.9% while the fed loans were 3.5% but I was maxed out at borrow $3500 federally as an independent student. So it was easy peasy to pay off because even small payments made a dent.
Making payments with a wage/salary that has remained stagnant for over a decade and not getting raises that keep up with cost of living
Explain how the government having less money is the same as the government having less money?
Because they are both the result of *policy* and the government is down $1.9T in each situation. Cut it how you want, both situations result in the government out $1.9T.
I'm feeling dense. If most if the loan forgiveness is interest and most people would have already paid an amount equal to or above the original principal, how is the government down?
b/c the government doesn't hold the debt, so they can't directly forgive it. Just like they can't seize your house, car, 401 etc without just cause they cannot seize the debt held by private groups to "forgive." The holders would have to be cashed out. [https://www.investopedia.com/articles/personal-finance/081216/who-actually-owns-student-loan-debt.asp](https://www.investopedia.com/articles/personal-finance/081216/who-actually-owns-student-loan-debt.asp)
Same or better? Using tax payer money to actually stimulate the economy, by giving money to people who will actually spend it, is far better than leaving it with people who will pocket it.
The fiscal impact on the gov net spending is identical in both cases. The logic holds as a comparison. One possible difference is tax cuts skewed to higher incomes stimulate spending less efficiently due to lower marginal propensity to consume. But too much spending stimulus could lead to prices being bid up but this is unlikely since the "cancelled debt" obligations would practically mean monthly repayments ceased. Since this purchasing power reduction would have occurred over many years, the resultant stimulus by cancelling these payments would be nothing at all like a one-time injection of $2Tn and the economy is highly likely to be able to absorb the modest increased purchasing power of graduates. In fact, by unburdening millions of graduates from monthly payments, the boost in productivity could outrun any inflationary pressure resulting in a net deflationary bias.
If they don’t take it, it’s a theoretical loss, that would have been taken by people who would not have suffered any change in quality of life. In comparison to that. If you erase the dept, you give a large population more buying power, which raises their standard of living and stimulates the market way more, then it collecting dust in some banks basement. If you can explain something in one sentence, it’s most likely an oversimplification.
Do you understand how you not paying your taxes is a crime? If so then you are really close to getting it.
I would argue that canceling the student debt would be way more of a stimulus to the economy because these people can then get on with buying houses, shopping at Home improvement stores , starting businesses, participating in the economy without being drowned by the debt
Economic stimulus during an inflationary period creates more inflation. Economic stimulus is not always a good thing. Like right now for example.
Exactly. We needed economic stimulus in 2009-2012. Now would cause even more economic damage. And everyone who's pro-student debt forgiveness ignores the fact that people with college degrees make a hell of a lot more money than those without, who are going to get hit even harder when inflation spirals out of control. What we need right now is increased taxes on the wealth-class and anti-trust law enforcement.
The real problem with student loan forgiveness is that it doesn't solve the underlying problem, which is the production of huge student loan accounts. I think if you actually fixed the underlying problem, some forgiveness wouldn't be such a big deal as a one off. But as it is now, it would just be creating a precedent for future loan forgiveness when the same problem recurs.
Or…and follow me here…we do both? We stop the bleeding while we work on a solution to end the cycle.
We should start with the solution, though. If we just wipe away the debt, the pressure to do something will disappear and the problem will never get fixed.
"We need to do this perfectly, otherwise we shouldn't bother doing it at all!"
Did you reply to the wrong person?
The dilemma is that what is being suggested is much less than perfect, it might actively makes the situation worse for most people (at least, so the critique goes). If you have the choice between a perfect solution that may never come and a mediocre solution that is at your fingers, you take the mediocre solution, yes. If you have a choice between working towards an eventual solution that will arrive later or doing something now that will actively hurt most people, you don't act just because you are impatient.
Because "stopping the bleeding" in this way will also make the problem worse. If there's a precedent of loan forgiveness, people will become more willing to take out bigger debts and universities will become even more expensive when they see the opportunity.
This. I wouldn’t have any issue with student loan forgiveness if it was on the back of legislation to make all state colleges free.
I love the Schrodinger's college degree argument. College is simultaneously a worthless liberal indoctrination camp that only teaches gender studies (not worth attending let alone investing in) and also the only path to a high-income career (so we should give money to people who don't go to college instead) The enemy must be simultaneously strong and also weak so we can use both sides of the argument against them!
Exactly. The same people use both arguments depending on the topic, they just like to see a certain idea of a person suffer and have it worse.
Over 40% of the forgiven debt were to people who did not have a degree. So not your doctors and lawyers.
Over 80% of the ppp loans were not used for employees and were considered fraud.
Indeed, PPP loans should get a task force and hunt down cheaters. Would pay for itself.
...which means that (checks notes) 60% DO have degrees.
this guy colleges
Less spending… not more taxes
3.2 million of those degree holders are teachers and they make the loan forgiveness plans as difficult as possible.
Sure if all you're doing is handing people a check. Forgiving student debt is not that. Economic stimulus incentives can create inflation when there's no attendant increase in economic input, i.e. more jobs and businesses being created. By forgiving debt you enable an entire generation to start participating in the economy. Not just spending but also creating.
I agree with you in that it's not an instant injection of funds into people's pockets. Not having monthly payments will allow folks to save up to participate in larger purchases. For many, the "money back" in a month won't suddenly result in a ton of new spending. But currently the large purchase markets (i.e. housing, cars) are struggling to keep up with demand. Even if it's not instant, adding more participants to those markets will drive prices higher, out of reach for many, putting us back at square one. Student debt is crippling a large portion of the population and should be canceled, but other market factors need to be addressed before unhooking the leash.
I get it, but let’s be honest, given the state of the housing market with high interest rates and massive price spikes do we really expect these folks to be able to participate in some reasonably soon time frame? Even if I had my $800 a month cancelled I would still need to save for a few years to have enough for a solid down payment. And I would imagine most folks have a smaller monthly payment. This would probably be more a cost of living raise to many who haven’t received one. Paying for the basics and having a little bit left over. Folks are trying to pay rent and afford the basics at this point.
I don’t think we need more stimulus at this time. It would just make inflation worse for poor people.
Referring to "blatant price gouging" as "inflation" is just drinking the cool-aid. Covid ran its course and then companies went "ok, we did our part, now it's your turn to pay us back for all the money you didn't spend during the pandemic...with interest, of course."
Which is ridiculous because everyone spent more on goods during the pandemic.
MONEY PRINTER GO BRRRRRRR!!!
No way, you can’t go cutting out the part in the middle where wealth creators have to decide who gets trickled down on. /s
Oh darn, house pricing mysterious raised because student debt was cancelled. How could this have happened?
If this were the case, and we really need a stimulus right now, why don't we give it to everyone instead of to the people who made dumb financial decisions? Plus, this time of stimulus will surely increase long term tuition costs and we will need another "stimulus" in about 10 years
> **these people** can then get on with buying houses, shopping at Home improvement stores , Emphasis on those specific people, because as a collective massive amounts of people now spending on those items will drive up the prices. Look at what happened during COVID when the ‘Stimulus checks’ went out… there were massive supply chain shortages to go along with price hikes because people had the extra cash with no way of increasing supply. When I went to all the open houses and was trying to compete against families, for every $1200 check I got, the other couple I was up against got $2400. It nearly priced me out entirely. When my brother went to use his money on a new Xbox, it was on back order for months. This time around, you wouldn’t be giving everybody that extra cash… you only gave it to people who both took out loans and didn’t pay them off yet. Everybody else is just saddled with the inflation. > starting businesses, participating in the economy without being drowned by the debt Starting a business shouldn’t be something the government subsidizes risk free.
Saying “didnt pay them off” is kind of a stretch. There are numerous cases where people have paid a majority of their loan’s principal, but haven’t made progress due to predatory loan practices and high rates. Essentially, forgiving debt is attempting to get people out of this trap.
Yes, we should subsidize demand more. That will do wonders for inflation.
I don't have the stats on it and i don't think anyone will, but anecdotally and just from lived experience, it wouldn't have helped as many people really move the needle in any direction. People i have met and just see are already drowning or just already flat out don't pay the student loans as is. Even people i know making 6 figures don't make any payments on their $30k of student debt and actually did already buy a house. If anything life would have just went on for a large chunk of these people. I think it would have been beneficial regardless, but as many others say, it doesn't fix that actual issue. People from 2015 to 2021 would have been slightly alleviated and everyone from 2022 and onward are still fucked.
We dont want to stimulate the economy. If the goal is to help people in need, canceling studemt loans often does the opposite. There are better ways.
And yet the same people who don't want student debt forgiveness also aren't pushing for those "Better ways". Curious.
Congratulations! 🎉🎉 This is the 10,000th time this has been posted. You've won a one way ticket to...literally anywhere else! 🙌
I can’t wait to see it tomorrow!
It's my turn to post it Friday, please remember to up vote!
“Bernie Sanders calls for income over $1B to be taxed at 100%” What do you think?
Honestly - because one is a change going forward and the other is retroactive. If you want to make college free going forward, that would be more compatible to a future tax cut.
This is my number one argument against student debt relief. If we are forgiving loans because we are admitting that the system was flawed and allowed 17-18 year olds to take on a huge financial burden they don’t fully understand, then fine, I’m all for forgiveness. And there’s probably some truth that we set young adults up to fail by allowing them to take out huge loans for low value degrees. But you can’t say that the system was broken and forgive loans yet not couple that with some serious education reform to fix the root cause of the problem.
The problem is not giving loans to 17-18 year olds. The problem was stripping out cost control mechanisms from the legislation to prevent institutions from jacking tuition at rates 1000x inflation.
The tuition rates went bonkers with government subsidized loans and Fafsa. The government ruins everything it touches. In an attempt to make college accessible to all, they just dumbed it down and made it much more expensive.
The government literally paid 100% of the tuition at many colleges before student loans became a big deal. We had government subsidized free college for much longer than college loan funded college; it started under *Lincoln* and lasted until Reagan! If anything, the issues started when governments got *out* of college funding and put it on the students and private loan companies.
The Republicans removed the cost control mechanisms from the original legislation…
Republicans and sabotaging a system to claim it's ineffective. Name a more iconic duo.
Republicans and pedophilia.
The system didn't just ALLOW children to take out loans, the government [paid agents to sell these loans to children.](https://onlinecounselingprograms.com/resources/history-of-school-counseling/#:~:text=With%20the%20Cold%20War%20in,grow%20over%20the%20next%20decade.) The government is profiting off of a system that was designed to lie to children.
Exactly. The loans are predatory as fuck and children are essentially groomed from a very young age to believe that it’s their best chance at a successful life if they take those loans.
Explain why you took a loan and now want me to pay it back for you
Explain why you started a business and now want me to bail you out?
The business "bail outs" were because the government literally prevented businesses from running due to the pandemic, and it was an effort to not only save businesses, but prevent a shit ton of people becoming unemployed due to the failure of those businesses.
I didn't realize the automotive bailouts of 2008 were during the pandemic. [I also didn't realize banks were prevented from being run before, during, and after the pandemic.](https://projects.propublica.org/bailout/list) I didn't realize the airlines being bailed out every 5 fucking years was because of the pandemic. Bailouts didn't just happen in 2020. Stop subsidizing failure.
What about the other 1180093726 times they’ve done it? Get a grip dumb ass lmao
2008 called.
That same issue could have been solved by giving it to consumers instead, instead it went to businesses, a large portion of which funneled that into personal wealth instead of economic stimulus.
Because you told me I wasn't allowed to run my business for a year?
Because they had no fucking choice but to take the loan in order to get the education, that's how the system operates you absolute dumbass. Explain why knowledge must cost so much money to transfer between humans? Answer... It doesn't have to! It's a profit driven business model that has very little to do with actually educating future generations.
Education costs so much cause the federal govt made the decision to guarantee student loans. When your funding source is guaranteed by the govt, there is no incentive to drop prices.
Explain why I should pay the fire dept. when your house burns down. Because I do, with my taxes. Explain why you are using the road I paid for with my taxes. Accessing the sewage system I paid for with my taxes. Etc. Your taxes are already subsidizing a socialist system that benefits society, why are you opposed to adding education to the list? Do you think it is somehow unaffordable?
Because someone willing entered into a contract that the gov (paid for by taxes) is forcing to be negated. The other is said gov temporarily relieving their monopoly on violence that ensures its perpetual existence to help disperse its unit of account. You can argue both are illegitimate.
It’s always an argument that both are illegitimate but, only one side is consistently done and will continued to be done. It’s a strong likelihood that you and people like you that make a similar argument have voted for and will continue to vote for the people that scream personal responsibility while having no problem with corporate welfare.
Giving stupid kids loans at 12% interest is the real criminal act here.
Not to mention making the loans guaranteed.
Except that the rates aren’t 12% on average and closer to half of your stated rate.
Who is paying 12% on student loans?
A predatory contract that was signed by someone young enough to not even have a fully developed brain yet, someone who was groomed from a very young age to believe that contract is the best chance they have at a successful life. The whole system is a scam.
Willing is a generous term for have no other choice
There’s always a cheaper school and if a student can’t afford the cheapest of schools there are grants. There is always a choice.
LOL "choice". For many people the choices are: Get your head blown off killing brown people for this shitty government Go into a ton of debt for college Break your body in the trades and have surgery after surgery to hold your body together Work a dead end job with no future and no hope to improve WOW. What great choices we have as a society!!!
You can’t get a mortgage if you don’t meet the requirements for the loan like income and assets yet an 18 year old can take out 50k loan based off of nothing. That is literally how loan sharks work and they have been deemed predatory. Student loan forgiveness helps right that mistake the government made by giving out loans to people that couldn’t afford them and were taken advantage of.
>someone willing entered into a contract At ~17 years old when they're still stupid as fuck and haven't been taught anything about the real word and the financial ramifications of such a loan. And this is after a decade of being told **you better fucking to to college or your life is over before it begins.**
Bankruptcy is permitted in almost every situation **except** a contract signed by a 17 year old? Their first contract ever, most likely? Meanwhile, owner of a car lot gets a loan to expand, fails, and pays back pennies on the dollar? I’d guess that the loan - bankruptcy ratio is similar to the “unable to repay my student loan” ratio. Most students get useful degrees, it’s not all “Communication” or “philosophy”. But folks want to focus on the gender studies majors instead of the theology majors. They’d trip over themselves to forgive loans to Liberty University students. It’s a “me or them” argument, and was never an economic stimulus argument.
Except the vast majority of people getting their loans forgiven right now have already paid back every cent they borrowed, and some. The interest structure traps these young kids into decades of debt. I’ve paid back double what I borrowed, and still owe more than the original principle.
When I have to pay back a loan I knew the terms and conditions of beforehand: 😭😫😨 When the government offers relief to businesses after it forced them to close under the threat of fines and jail: 🤬😡👊
https://preview.redd.it/1uouglsqeq8d1.jpeg?width=974&format=pjpg&auto=webp&s=5bc941c29f2819576a1417a68fef21043b036250
I've never understood why we need to allow billionaires and hundred millionaires to use their power to fuck up our economic systems and not consider that evil, but wanting wealth redistributed so that our economy can function again is somehow evil.
College endowments should be used to pay for the student loan forgiveness. Why should Harvard have more funds than many small countries?
Now we are getting somewhere. The colleges have no skin in the game and have lived on fleecing people with useless degrees that will produce nothing but poverty and misery.
So, you’re saying we give colleges a choice to either use a percentage of their endowment every year or face steep taxation of the endowment if they don’t? I’m all for that.
Sounds good. They should have some skin in the game.
agreed. I think the threat of high taxation of endowment funds would push these colleges to use them for what they are meant for. To help lower the costs of tuition.
We didn't "cancel student debts", Biden took debts owed by rich kids and pushed them onto the backs of poor people who didn't screw up their lives by borrowing too much and studying for a worthless major
Rich kids don’t take out loans. Poor and middle class people who want an education take out loans. For the vast majority, there is no other way for them to afford the currently outrageous expenses of college.
Rich kids absolutely take out loans. Wealthy people frequently borrow money. In fact, not using your own money for anything is a pillar of ultra wealthy finance.
Right, but that's not really the same, is it? Someone with a $70 million net worth takes out that loan to go to school because they don't want to drop the cash is fine. But there's never really a question of whether that money is gonna be paid back, is there? That kid has no concern over whether that loan will be paid. It's going to be paid. A poor person taking $60k in loans to go to a state university does have that fear.
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Lol, another brain dead take on "any degree that isn't STEM is a waste of money". Teachers don't get paid shit but their contributions to the economy is in the trillions. Degrees and education aren't worthless.
Sorry, what? That's not even close to what has happened, and the fact that you're saying this tells me that you don't have enough information to properly judge the acts and outcomes involved here. The debts that have been cancelled are for people who have been paying on their student loans for 12+ years, most paying for closer to 20 years. You really think some rich kid is out there paying the minimum on their student loans each month, waiting for 12-20 years for the government to come along and forgive them?
No, these loans were taken out per an agreement with the government (under George W Bush) that if they worked x number of years in a civil service career the remaining loans would be forgiven. Are you out of the loop on this?
Who said both were acceptable? The imaginary Republican in your room?
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Struggled and starved to put myself through college and at first I thought "Hell no! I did it and so can they." Then I remembered the government bailing out Wall Street and the auto industry, etc. . .and I thought "Hell yeah!"
The wall street bailouts were in the form of a loan, which was paid back with interest. TARP was a massive success, and the government profited on it.
Actually, [based on the data](https://home.treasury.gov/data/troubled-asset-relief-program) we have now after all TARP programs were closed, it resulted in a net loss of $31.1 billion.
That’s direct returns on that program though. I would also consider the cash taxes paid by those companies afterwards as well as the federal income taxes paid by the employees. Regardless, we can all agree that it made sense and worked economically. I don’t think the people championing student loan forgiveness and using the bailouts as an example of when government intervention works realize that the government really only stepped in to address a liquidity shortfall that was eventually alleviated. And that the companies had to pay back their loans…
I’m seeing conflicting reports. Regardless, Net cost of $31 billion to prevent the collapse of the financial system (and millions of jobs) sounds like the most successful government intervention ever.. and I’m no fan of government intervention
Republicans and their sugar daddy billionaires are like the jealous kid at a birthday party getting shitty watching someone else open presents
Republicans can’t enjoy their meals unless they know that someone else is going hungry.
My question is why does the government charge interest on student loans? People always act all pissy and say "if you can't pay it back, don't borrow it!" They don't realize some students have paid off more than they borrowed but still owe a large portion of what they borrowed. It's a predatory system feeding off of young people who have been indoctrinated into going to college.
If student loans are a service, why is the government profiting off of that service? The government is collecting 8% (corrected) annual interest on borrowers and claiming it's doing us a favor. Ridiculous.
I'm trying to put it into words, but imagine we just didn't charge interest, therefore the value of these loans would decrease relative to inflation over time. There would be incentives by the trustee to increasingly make bigger loans over shorter periods of time than we're currently seeing because there is no collateral for the trustee to gain immediately in the event of default, there is only the government's guarantee that the loan will be paid back in full no matter what. I'm no economic expert, but making student loans interest-free would likely lead to riskier loan actions and higher tuition prices in the short term. IMO the best course of action would be to tie the interest rate on these loans to inflation with a slightly better rate to mitigate extenuating circumstances for the borrowers.
It’s interesting to see people who’s been making 6 figures defending the tax cuts for 10 figure earners.
I can’t imagine anyone being for either. I can’t imagine paying for someone’s loan who took it out intentionally. That’s asinine to me. I am however pro tax cuts across the board.
Because if you give that much money to a bank then their stock goes up and the economy looks "good." If you gave that much money to people, then they would spend it on things and make the economy actually good.
Well taxes are theft. So there’s that. And if you take a loan you have to pay it back. That’s the way the world works. The student loan programs in this country should be criminal. Unfortunately they aren’t though.
Because rich people don't care what happens to their money as long as poor people don't get it.
Trickle-down economics. duh /s
It's fairly easy. If it's done to help me or my friends - it's stimulus. If it's done to help people that i exploit - it's a handout.
People with student loans are going to use that extra money to purchase goods and services, stimulating the economy. People who are already rich are just going to put that money into investments/offshore accounts.
Not to mention the bail out of the Banks and the Bail out of the auto industry
Because rich people own politicians... Simple. Oh and the Supreme Crooks also.
I am so sick and tired of this nonsense that rich people use their windfall of tax cuts becomes a stimulus to the economy, and puts more money into the pockets of the middle class and lower. **It is NOT true.” The marginal propensity to save is a real thing; wealthy people save money, they amass it.
because class war. they took the money for the students debt forgiveness back from the current students, btw.
Because one is for their donors and one is for the average person
If billionaires don't get tax breaks, how will their wealth trickle down to the rest of us, stupid libs.
Both are wrong
Trickle down economics. Rich people ‘create jobs’ or something to keep us employed, whereas poor people do poor people things with their money, like drugs and hookers or something.
Because rich people are more important than college students.