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Sorry I'm on a trip and wrote this from a phone, hence the typos

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That so many in the comments here are furious about forgiving a very small amount of student debt is, to me, a sign of how reactionary the comments have become here.

Which is too bad.

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Ultimately, what it really comes down to is this bootlicking and bootstrapping neo-Puritan mindset.

Debt forgiveness is wrong because the people who need it are unsuccessful losers who deserve to own the consequences of their mistakes. Meanwhile, the wealthy deserve more rewards because they were clearly virtuous and hard-working enough to obtain their wealth in the first place.

Ditto for those who decry minimum wage increases, housing support for the homeless, unions for Starbucks workers - but not CEO pay inflation, private equity gobbling up homes, and business “unions” like the Chamber of Commerce.

Many Americans simply hate “losers” and think they deserve to suffer just for being losers. This pervasive notion that financial hardship is a moral failing precludes us from having nice things.

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Is forgiving 10k in student loans good policy? Does it add to or take away from the problems of out-of-control school costs and predatory lending? Is is a net positive or net negative for society? These are good questions! And hard ones! And a wonky discussion of the policy is worthwhile!

Is forgiving 10k in student loans good politics for the Democrats? Will it lead to a net gain or a net loss in votes? Also a good question, and a complicated one! Discussing the political strategy of it is worthwhile!

Was the PPP program a good program? Looking back now, did it do what it was intended to do, or did it just line the pockets of the already well-off with wasteful spending? Good question! One that will lead to some nerdy economic theory debates that have been going on for decades.

These are all good questions to discuss! Hard questions, and probably no clear answers.

But you know what is easy? To reduce it down to a moral debate where people can comfortably fall back into their culture war talking points and make it about “greedy billionaires” or “people mooching off society”.

I don’t know... I just feel like the way we discuss the hard questions about “what is the most just for society?” or “what will do the most good for society?” is not healthy at all. These are super-fucking hard questions, but if the discussion is playing out primarily through meme wars... that’s not good.

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Aug 26, 2022·edited Aug 26, 2022

Thanks for that. I may need the ammo here behind the Orange Curtain (LoCali people will know where). The debt relief is a manifest blessing. My wife and I long ago committed to paying our kids’ loan costs. We’re comfortable middle class but not wealthy and have always tried to be smart about expenses. As a 30-year teacher I will collect a liveable pension in a couple years.

My 3 children all went to state schools, and two spent half their undergrad time in jr. college. Those 2 finished in Cal St. schools while the other was all 4 years at a UC.

When my wife and I went to the same places in the 70s & 80s a semester’s tuition for a full course load at a typical CSU campus cost about $120. My wife graduated debt free; I went from CSU to a UC and finished w/about $3k to pay off.

9 years ago we started tackling our kids’ payments. The CSU attendees would eventually accumulate $35k+ and the UC student about $42k+. So, there’s your measure of what’s happened to college costs over a generation. Suffice it to say the new debt-relief is most welcome.

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So, I am personally modestly in favor of student loan forgiveness, but I think the comparison to PPP is pretty dumb. Here's my best explanation for why.

The purpose of the PPP was to incentivize certain behaviors that the government believed were socially beneficial. Specifically, the loans were designed to give employers the resources necessary to keep employees on payroll through a pandemic, and were structured to strongly incentivize that usage with forgiveness if certain terms were met.

Student loans also have the purpose of incentivizing certain behavior, specifically the socially beneficial behavior of going to college. The structure of these loans was less forgiving than the structure of PPP, but this makes sense, as PPP was a desperate emergency measure, whereas student loans are a much more measured long-term policy.

I think both of these programs have some pretty serious flaws, but they also clearly, on some level, work to encourage the sorts of behavior they were intended to encourage.

The thing is though, when you go back and modify the terms on student loans after the fact, there is no first-order incentive effect. The desired behavior (going to college) already happened. So forgiving the loan isn't saying "you do this good thing and we will reward you," it's just a straight giveaway. That's not necessarily a bad policy! I think straight giveaways are often good. But the comparison to PPP is inapt, because the PPP was not simply a straight giveaway, but was intentionally designed to incentivize a specific desired behavior (perhaps badly, but that was clearly the intent).

That said, I think being full of shit is part of politics, and the white house dunking on PPP recipients probably plays well to certain audiences. But we should understand that as (beneficial) propaganda that is nonsense under the covers.

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Not sure why there’s already such assumption that only rich Ivy Leaguers took out student loans. I’m willing to bet that many, if not a majority of these debtors are the poors who got convinced they needed postsecondary education to be competitive in the workforce and were never told how universities or the workforce actually work, and are now saddled with tens of thousands of debt dollars on $0 annual IBR plans.

Plus, this won’t really affect inflation! Banks will take a hit on their profit margins and the government will take a hit on interest profits. Universities’ for-profit incentives have not budged and the most the public will likely see out of this is a marginal tax hike (this is not the same as what controls inflation).

This debt relief act is broadly something that will gently help those who are worse off economically the most, but it will still not eradicate their debt (and sure, while the wealthier students may also receive a break, they fair better in this situation for other reasons than have nothing to do with helping poorer students).

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The primary purpose of these loans was to forestall layoffs and business shutdowns during the government's (terrible) C19 public policy blunders.

Whether good or bad policy, PPP does strike me as being far more defensible than the odious (and likely unconstitutional) student loan "forgiveness" announcement this week, and signals what is likely the most cynical regressive wealth transfer in the history of American politics.

Rule by, and for, the Professional Managerial Class sucks, and the Democratic party will learn how deeply unpopular this notion is in November.

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Over and over we hear that college grads make more money. "Go to college so that you can get a good job and make more money". Is that true or isn't it?

What's more college grads live longer. At the same time the life expectancy for people with only a high school diploma has DECLINED in the United States recently.

There is no funding provision for student loan forgiveness. It is reasonable to assume that everything will come out of the general fund. We are talking about getting people who lead poorer, shorter lives to pay off the debt of the rich.

That is absolutely grotesque. Has government produced anything more disgusting and shameful in recent years? If the knock on PPP was that it went to line the pockets of the rich how is this any different?

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founding

I agree that many PPP “loans” were cash transfers to the wealthy. At the same time, I have no hope that these arguments will ever make a dent in public perceptions of student loan forgiveness.

Government spending is obscenely unfair. Same with tax policy. But student loan forgiveness, unfortunately, is unfair in a way that is easy for ordinary people to grasp.

Loads of people don’t qualify because they never went to college (the majority), or they already paid off their loans, or they have private loans, or they refinanced to private, or they make too much money. All of these people can easily understand, and resent, how their friends got $10k and they didn’t get shit. It’s just terrible optics.

I support forgiveness, and I’m relieved for a family member who really needs it. But I still feel resentful. I can’t help it. We started with $350k in student loans from my wife’s medical school education, and we pay (literally) about $48k per year. We had to refinance because the government interest rate was 6-8% -- we were basically coerced into making them private.

But the public loan I brought to the marriage (now down to $4k) would have qualified except that we make too much in household income, barely. We would easily qualify if you subtracted what we pay in loans.

I wouldn’t prioritize us for government spending. We are better off than most people, despite the $4000 we send to Sofi every month. But student loans have been a huge source of stress for our family for almost 10 years, and our total burden is fucking ridiculous. It will be almost $500k by the time that we’re done, thanks to interest. The psychological impact of “student loan relief is here, but not for you” just feels shitty even though logically it makes no sense to fixate on this. So I can imagine how it feels for people who are struggling to pay their bills.

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this discourse really is plagued by hippie-punchers memory-holing the socioeconomic catastrophizing re college vs non-college, from lowly high school guidance counselors all the way up to Bill Clinton, in the 1990s.

i grew up working class, single parent, attended a decent HS. at this point my sister and one cousin went to college, that was all the college in my family. i could've went to Mason but hyped myself into Georgetown and paid dearly for this blunder in my 20s, I'll hold that L. i learned to live in shitty low-rent apartments while saving aggressively, it's ultimately worked out.

but goddamn. ppl talk about this issue like everyone w substantial student loan debt is some political cartoon: a trust fund dipshit w six advanced degrees in gender studies and a conscientious objection to any sort of adversity or discipline or hard work. that so many ppl seem to sincerely believe this is the scope of the student debt problem is infuriating. talk about out of touch. it was often working class families, more than anyone, that saw college as a make-or-break prospect. the idea that working class families don't care about student loan debt or have no stake in relief and reform is ABSURD.

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I wish Biden would just say fuck it and just forgive everyone's loans, cap interest rates for future loans, and let the ball roll as it may.

I have little fucks to give about "wasted US tax dollars" after the 2008-2009 financial crisis, trillion+ on useless wars, farmer handouts (that primarily help corporate farms) and rich people tax cuts.

At least this would truly help a big chunk of Americans and free them from a yoke of debt and allow people to consider buying a home for themselves, have kids and overall stimulate the economy more than rich corporations doing stock buybacks after fucking over their employees in a 'crisis time'.

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Aug 26, 2022·edited Aug 26, 2022

I'm all for student loan forgiveness. I've heard many stories about how the interest rates are so jacked up that even if you're diligent with your payments, the loan stretches on and on seemingly forever.

The thing that annoys me most is the "DURRRRRRR the Left got too Woke so I changed all my opinions on Literally Everything and became a conservative and wont admit it" crowd. For example: https://mobile.twitter.com/RealKeriSmith/status/1562506708332982272

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You forget that a lot of the money went to businesses like mine, a small veterinary clinic. I got $66K. We had a COVID outbreak and had to shut down for 10 days. Although it cost me far more than the $66K, that money allowed me to pay my employees uninterrupted and retain them, which was the point. I don't know the percentages of how much went to millionaires, but would like to know. Some businesses were shut down for months....for a large business, if they retain payroll, that could easily cost millions...the devil is in the details, not in the obvious answer.

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In my view governing by executive order is worse for the country than forgiving student loans. But that pandora box isn’t going to be closed anytime soon

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While I hate the unfairness of Biden’s giveaway to everyone who honored their commitments (or made hard life choices driven by financial realities), what REALLY bothers me is that a supposedly liberal administration chose to go this route rather than, say, seeking to ease the debt burden on low income people by paying off $10K of their car loans and consumer debt.

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