A Giveaway That Will Hurt The Working Class
By John J. Duncan Jr.
The publication Advisor Perspectives on Bloomberg News called President Biden’s plan to forgive student loan debt a “costly mistake” and “a giveaway that harms working-class and poor Americans.”
This August 25th column by Advisor editors added: “With one announcement, Biden has undermined any commitment to fiscal discipline, reinforced his party’s reputation for catering to elites, created a significant moral hazard, and likely made higher education less affordable for a generation.”
Even some Democrats question the plan. Congressman Tim Ryan, the Democrat U.S. Senate candidate in Ohio, said it “sends the wrong message to the millions of Ohioans without a degree working just as hard to make ends meet.”
Congressman Chris Pappas, a Democrat from New Hampshire, said “this announcement by President Biden is no way to make policy, and sidesteps Congress and our oversight and fiscal responsibilities.”
Democrat Sen. Michael Bennet of Colorado said the White House should have further targeted the relief and proposed a way to pay for the plan. He said “one-time debt cancellation does not solve the underlying problem.”
Perhaps you have seen on television after the announcement a clip of Nancy Pelosi from a few months ago when she said the president could not do this alone without approval from Congress. Now, of course, she is going along with doing it by Presidential Executive Action.
The highly-respected Committee for a Responsible Budget said the cost to taxpayers will be approximately $500 billion over the next 10 years and “will likely cost more than double the amount saved through the recently passed Inflation Reduction Act.”
Of course, many were very skeptical of the projected “deficit reduction” in that so-called bill anyway since most of the “savings” came in the last few years and came from early-year tax hikes that will hurt the economy.
It never has made any sense to increase taxes during a recession, and we are in the midst of a recession under the traditional definition, but the Biden administration has attempted to change that definition.
While this loan forgiveness is bad for the country and especially for those without college degrees, it is very good for 30 senior White House staffers.
Phillip Wegmann writing on the Real Clear Politics website said these top 30, on their financial disclosures, show total student loan debts of $4.7 million.
Wegmann also wrote that there is “more outstanding student debt in Washington than any other city in the country” and that according to business analyst Advisor/Smith “the average D.C. debtor owes $54,982 in unpaid student loans.”
While I don’t particularly like Sen. Mitch McConnell, he very accurately said this is “a slap in the face to every family who sacrificed to pay for college, every graduate who paid their debt…” and is “astonishingly unfair”.
Erielle Davidson of the George Mason University Law School wrote in the New York Post, that the Biden plan “sticks it to the little guy” and is “yet another example of a misguided and dangerous policy initiative masquerading as a public good.”
According to the National Taxpayers Union, the average burden per U.S. taxpayer will be $2,503.22.
Oren Cass, a policy analyst and Harvard Law School graduate, wrote in Politico that the plan is “absurd” at least in part because so much of the relief is going to people who don’t need it.
He added: “The cognitive dissonance between the unquestioned commitment to extravagant spending on college and the questionable value of that spending is what yields America’s bizarre discourse around student loan debt – and leads to irrational policy moves like Biden’s.”
Finally, as I mentioned in an earlier column, Mark Cuban once said, “If you want to make college really expensive, make it free.”
This is because of the very simple fact that when government subsidizes anything, most of the incentives and/or pressures to hold down costs and operate efficiently are removed and costs just explode.