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PaperclipPerfector  1yr ago (text post)   28280 thread views

Culture War Roundup for the week of June 3, 2024

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How will Republicans responds to Biden's student loan giveaway?

Even though the Supreme Court scuppered Biden's plan to forgive student loan debt without congressional approval, he is apparently doing it anyway. So far, it would appear that 4.75 million people have had loans forgiven for a total cost of $167 billion.

Here's a link to a recent Biden administration press release.

I will admit, the devil is in the details. I am not going to comment on the constitutional legality, the many ways to qualify for forgiveness, nor the amount given to high-income earners, which some have claimed is substantial.

But the total cost is staggering. It amounts to over $1000 for every American who pays income tax.

Clearly, this money has electoral implications. The base of people who have large student debts is presumed to be mostly Democratic voters. By giving this group a mean payment of $35,000 each, the Biden administration hopes to increase their enthusiasm to vote. Even the ones who do lean towards Trump might view Biden favorably after getting (almost) enough money to buy a new Tesla Model 3.

Buying votes goes back as far as democracy does. Famously, Julius Caesar was forced to conquer southern Spain after going broke buying votes to become Pontifex Maximus. In recent times, some have argued that farm subsidies amount to vote buying. But, while special interests have always played a large role in American politics, student debt forgiveness is possibly the closest thing to naked vote buying we've seen in our lifetimes.

So... how do the Republicans respond? Whose votes should they purchase with a fig leaf of social justice? I'd propose a group that honestly needs it and creates a lot of value for society: blue collar workers. People who work 30 hours a week or more and make less than $30/hour should get an "earned income credit" of $10,000 a year.

If we're going to just be giving money away, give it to the workers, not to excess elites.

One thing that confuses me as a non American is the details of how Biden ignored the Supreme Court here... did he find a loophole, or did just a drive a bus through the ruling and dared them to do something?

Surely it must be the first and its loopholery, but I'm not entirely sure how the rules work in these cases. For example it certainly seems like the court gets de facto ignored with New York gun laws, with high degrees of non cooperation from lower courts and law enforcement. To what degree can people just ignore the court and get away with it? That seems... odd.

When you own Harvard Law, everything you do is legal. The DNC owns Harvard Law.

The loan forgiveness discussed in the press release are based on different programs than the loan forgiveness struck down by the supremes.

For example, the press release is announcing $7.7 billion more in loan forgiveness. $5.2 billion of that are based on the Public Service Loan Forgiveness program (basically requires making payments for 10 years while working a government job, with the balance forgiven at the end of the 10 years), a program expressly authorized by statute with some administrative adjustments implemented by the Biden administration.

That is in contrast to the program the supremes struck down(basically a flat $10-20 thousand in forgiveness if your income is below some threshold).

It should not be surprising that striking down the latter does not effect the former.

That does sound more reasonable, is there precedent that the president does have the power to make this forgiveness without involving congress?

It seems risky if this becomes the norm from an outside view, and could well lead to tit for tat... is it just because they're technically loans (you owe the federal government) rather than a literal targeted payment from the federal government to a group chosen by the president? In economic terms they're kind of fungible, but I assume there's fewer special interest groups to neatly forgive so it constrains the president at least a bit...

Of the $7.7 billion in recent forgiveness announced in OP's press release, $5.2 billion is based on a law passed during GWB's administration, and the first grants of forgiveness would have gone out during Trump's administration. So sure, precedent, but also statutory grounding.

If this surprises you, perhaps you should consider whether OP's post faithfully characterized the situation.

I have to admit my belief in this being "bullshit porkbarrel politics" has dropped from a 80 to 20 on an indexed basis, based on your comments.

I do think that if Trump tried anything like this, especially following on from a similar policy being slapped down by the supreme court, there would be far more protests. However, that's kind of hard to prove.

Plus, loan forgiveness still seems a fairly bad idea, independant from if it's legal...

For what it's worth, I don't wish to convince anyone this isn't porkbarrel politics. I think it is.

I simply take issue with the framing here that the Biden administration is ignoring and overriding the supreme court with this recent loan forgiveness.

Plenty of bad executive actions are perfectly legal.

And sometimes a first attempt at a goal is struck down, and a later, different attempt at the same goal is not. Trump's early travel restrictions in particular come to mind.

$5.2 billion is based on a law passed during GWB's administration

"Based on" in the sense that a certain genre of Hollywood drama is "based on a true story".

Most of the forgiveness is coming from a change in how the rules around repayment. The biggest shift is the terms of repayment - both parties when they've been in power have introduced various forms of repayment plans based on income, ability to pay, whatever, the normal administrative stuff.

The shift Biden's done is the newest plan drops the term to when previously, under certain plans, if you paid for 20 years, even if you didn't pay it off, the loan was forgiven (this was true under prior admins as well), they changed the terms to 10 years, and then, basically, anybody who has paid for 10 or more years now is getting their loan forgiven.

My understanding was that it is only up to a certain amount like 10 or 20k on the new 10 year plan, so not anyone for any amount. PSLF already was ten year, it was just a cluster till this admin fixed it.

it is much more restricted:

Thanks to this Administration’s efforts more than one out of every 10 federal student loan borrowers has now been approved for some debt relief. This action builds on President Biden and his Administration’s efforts to provide debt relief to as many borrowers as possible as quickly as possible.

just one out of 10. Originally Biden tried to invoke the 2003 HEROES act to cancel debt, which was much more comprehensive and entailed an near-unconditional $10-20k of loan forgiveness. This was an egregious arm-twisting of the original legislation so it didn't have much footing. The new proposal is more restricted, requiring 10 years of repayment to qualify, and falls under the PSLF Program, which was established under the College Cost Reduction and Access Act of 2007. The first one was much more like a handout compared to the second.

The supreme court can't send people to enforce the law. It has no enforcement arm of its own. If the agencies that control all the people with guns choose to ignore them, there isn't really any recourse.

I wish everybody could see what the life of a university student looks like right now.

The dorms have morphed into all inclusive luxury apartments. “Student loans” are spent on food delivery, and fast casual restaurants like chipotle.

Go visit a college town and look at the apartments and the restaurants and everything around it. It’s unsettling.

A university should be surrounded by dive bars. Dorms should continue their long tradition of being just barely habitable, and students should have jobs that they use to pay for their tuition. Anybody who can do basic math saw that as the availability of money increased (unsecured student loans), the cost rose to meet it. There is no gating function on university cost. It will continue to go up until it either reaches infinity, or until we stop giving unsecured loans to children to pass on to these massive multi billion dollar institutions.

“Forgiving” these loans is insane. We’ve robbed billions and billions of dollars from the American people and given it to a small minority of elite wealthy children and massive real estate investment firms which also happen to teach a few worthless classes.

I like the proposal to have the universities act as guarantors of the loans of their students. They have control over how employable their students will be, over how much debt they will accrue in tuition and over how long the ones who will fail will stay on before being failed.

If a university then decides that that they can not provide a course at a cost where the students can on average pay back the costs, then it seems reasonable to conclude that their course is not a sound economic investment. They might still attract students who are independently wealthy and just want to study something for fun, but there should be no student loans for such courses.

Of course, over here in Germany, we don't have tuition. Bafoeg, our student loan system (used by 20% of the students) is capped at some 900 euros a month (most of which will go towards rent, in the big cities), and you have to pay half of it back. Universities don't have famous sports teams here.

“Forgiving” these loans is insane. We’ve robbed billions and billions of dollars from the American people and given it to a small minority of elite wealthy children and massive real estate investment firms which also happen to teach a few worthless classes.

I actually agree that what happened was awful, but I don't think the students are the people who deserve blame and financial punishment. The people who actually profited off all these dodgy loans are not just still there, they're insanely rich - just look at the immense amount of money in University endowments.

Personally, I think that non-performing loans should be clawed back from the educational institutions that actually profited from the whole affair. Many of the students with these shithouse loans are victims living in poverty and deprivation while the people who scammed them are still flush with cash. That's where the money actually went, and that's who should be paying back those loans. I can't really see any other reason to go after the victims (many of whom have qualifications that are either useless or actively harm their job prospects) and further depress fertility rates when the people responsible for all this wasted money are still enjoying the profits they made from it.

I can't really see any other reason to go after the victims (many of whom have qualifications that are either useless or actively harm their job prospects) and further depress fertility rates when the people responsible for all this wasted money are still enjoying the profits they made from it.

The "victims" spent 4 years partying at government expense without thinking much about what would happen when the loans came due and they had a degree in something either worthless or harmful. Personally I'd leave them on the hook for some reasonable value of 4 years of partying and take the rest from the universities, but either way, there's no reason to worry about their fertility rates: depressed rates are negative eugenics in these cases.

What are you talking about?

I graduated from a state school in the 2010s. Our dorms had been standing since the mid century. They did demolish some even older ones to put up new dorms, and those fit your description, but nobody wanted to live in them because they were too expensive. I think they were either a donor earmark or part of the athletics rat race.

I paid $400/mo for my room in a bedsit, and it showed. Could have gone cheaper, too, in one of the complexes with a reputation for fire risk. I only wish my current town had anything close to those prices.

Most people I know either worked, or had parents rich enough to pay their way. Occasionally both. The best scholarships (outside of athletics) just wiped out the outrageous out-of-state tuition without covering housing or the ridiculous fees. Wait, unless you were Native American, in which case they gave a better stipend as a mea culpa.

Boomers like to complain about Chipotle or whatever. Sure, I guess the standard for fast casual raised a lot. Want to take a shot at how many burritos it takes to meet the average $11,000 tuition?

Nobody did delivery, either. If we really needed to get off campus, we walked to the shitty Asian restaurant across the street and came back with fried rice, as God intended. Same goes for the bars. They probably made most of their money on game day, anyway.

I graduated from a state school in the 2010s.

Two things:

First, depending on if you were at the beginning or end of the 2010s, there will be a vast difference. The money pouring into luxury (by any stretch of the definition) is staggering. By the time I left my alma mater we had completed 2 brand new dorms that competed directly with off-campus apartments, and a new fitness center with golf simulators, rock walls, and the best equipment money could buy. When I visited 10 years later, even more new dorms, stone buildings, and high-end food options were available - with the dive bars replaced by chains and uber-high-end apartments. The story is the same at many other formerly sleepy state schools.

Second - it still varies. The first school I went to for 2 years had far more rudimentary accommodations and we typically ate at the dining hall and that was it. Our dorm bathrooms were communal, there was one tiny kitchen to rent per 400 person complex, and "Luxury" was renting a ratty ranch house that still smelled like Natty Lite but had enough space, or a postage stamp of flimsy new-construction apartments. There was one nice dorm that you could get into, in theory, but that was about it. The dive bars were still losing ground to chains but....

And as I talk about this I'll revise a little. Three things, then!

I wish I had gotten student loans and spent a little more. I can't imagine what it would have been like to be able to take women out to eat, go on weekend trips since I could afford gas, and work out at that gym instead of slaving away at some fast food joint. It would have been un-fucking-believably fun. It also appears that there would have been virtually no consequences for it - either the government would have paid for everything, or I would still have been able to afford the ~$50k in loans at the end of it pretty easily.

This may seem tongue in cheek but to put it another way, I have enough money now I would kill to go back in time and give 20 year old me a ton of cash, even with a penalty. I think there's a lesson there about living beyond your means a bit when you're at the apex of your youthful vigor, even if getting taxpayers to pay this shit instead of people's future selves is disgusting.

And, to note- students can opt out of cost disease. This isn’t a ‘no starter homes available’ situation. You can live with your parents, go to community college for 2-3 years, and then transfer to podunk state school of commuting for 1-2 years, and get a degree for like 1/8 the cost. This is the less popular option.

At some point, controlling the student loan problem requires either underwriting that will automatically get blown up into an algorithm based on throwing money after Shaniqua or reinstitution of sumptuary laws. Simply… cap the conditions available on campus. Require food halls to serve exactly the same food as the nearest prison, ban individual dorm rooms(and for an added bonus, require one-locker-room-per-floor level facilities), prevent the use of student loans for off campus expenses, etc. You want better than that, you pay with cash.

And, to note- students can opt out of cost disease.

You can also opt out of a lot of problems by going and living in the woods like the Unabomber. Why are people complaining about inflation when they could simply opt out to go sharpen some sticks and hunt rabbits in the forest? There are incredibly severe outcome differences between someone who goes to Harvard or Yale as opposed to podunk state school of commuting and I feel like it is dishonest to claim that they're equivalent.

I, at 17, toured three local universities that obtained a substantial number of their students transferring from community colleges. These were large podunk state schools, and they were quite clearly 2-star resorts with colleges welded on. Oddly, the tour focused on things like having a five star chef(this is probably less impressive than it sounds) in charge of the dining hall and nice, new dorms with individual bathrooms.

The median student taking on debt for a bachelors degree is not going to Harvard, they’re going to a second or third tier public school. The difference between a state flagship’s commuter school satellite campus and podunk state, the hotel in nowheresville, is functionally nonexistent on your resume; I would actually imagine it runs the opposite direction when there is one.

This isn’t a ‘dodge rising gas prices by becoming Amish’ idea. This is a ‘you’re going to podunk anyways, just don’t party while you do’.

There are incredibly severe outcome differences

The outcome differences are primarily due to the kinds of people who go to podunk state vs harvard. Once you control for that, the differences are pretty slight.

I think the estimate of the breakdown of the private returns to college education from Bryan Caplan (not a huge fan of the status quo) was around 50% ability bias ("the kinds of people who go to podunk state vs harvard"), but also 40% signaling (even if you're smart enough to go to Harvard, can you prove that to employers without the diploma?) and 10% human capital (Harvard actually does have some classes that teach you more because they don't need to worry about the slower kids keeping up). If he's right then you still want to steer clear of podunk; the net return to education is still too huge to throw away half of it lightly.

You're misrepresenting Caplan. That's his breakdown of returns to college education vs a high school diploma, not Harvard vs Podunk state.

Sure, but when I can't take a derivative I'll still prefer a finite difference over nothing. How would you think those estimates change when we reduce the delta?

I think the answer depends on what you think is the margunal value of Harvard over Podunk state, which is the very question we are discussing.

More comments

A lot of that is path dependant though. 20 years ago you could control costs by keeping with cheap low level accommodations and facilities and declining to build luxury. But now, the luxury is built. What are you gonna do, demolish it to build shitty dorms? You can stop building more luxury and try to bend the curve back down, but you are starting from the new high level, getting back to old low level may be impossible at this point.

The problem is that parents want their kids to leave and are happy to pay the tuition, availing themselves of the generous aid and other programs too. It's a win for students and parents. Boomers and gen-x parents have tons of $ specifically earmarked for college.

Ok, so they do, but if you cap amenities available to students, then colleges have to compete on price. Or on educational quality, which unlike luxuries is a reasonable thing to spend more money on.

When I graduated in 2014 from a large state university (not my undergrad, mind) I was already wondering how much further it could go.

The campus had its historical parts that predated the civil war which maintained their classic look, but massive modern facilities were popping up on the periphery, and new 'luxury' apartments and home rentals were being added with dizzying rapidity. And while I attended classes in a classic/historical part of campus, they renovated the interior with furniture that cost upwards of $1500 a piece.

And of course my membership to the huge gym/recreational facility and campus life buildings and events and bus transit was all included too. I intentionally sought out bottom-of-the barrel accommodations, but every other aspect of the experience seemed designed to get you to blow out your budget on frivolities, even if you weren't actively partying.

The downtown area was a mix of dive-bar-esque independent establishments but well known chains were encroaching. There was a single lone strip club that was holding out on a side street. A quick google search shows that it is still there, though.

It was readily clear that the college was an anchor for the whole area in terms of funneling student loan funds into the school's coffers and tons of local businesses who were aggressively optimizing for getting naive students to spend more than they needed. The only constraint keeping the school from capturing all that money is that they couldn't build new facilities fast enough.

I think this has had the additional effect of giving college kids hugely elevated expectations as to what real life is like and how they can expect to live unless they snagged one of those FAANG tech jobs right out of school, at which point those expectations are probably accurate. Also they probably get used to having a billion subscriptions for things that simply don't require them and outsourcing all kinds of labor they could economically perform themselves.

And this helps explain why kids getting out of school get the 1-2 punch of realizing how all that consumption during college was financed by debt they now have to pay, AND realizing their standard of living will be slashed by like 40-50% unless they're willing to KEEP financing it on debt for a while.

When I graduated in 2014 from a large state university (not my undergrad, mind) I was already wondering how much further it could go.

Tuition will keep rising, as will debt, as long as college grads continue to earn a significant wage premium, which they still are. The gap stopped widening since 2021 or so, so that is some progress finally . There is so much aid , scholarship, discounts and other programs. Parents are happy to dump their kids off at a university whilst taking advantage of these many generous discounts. If college tuition were like any other big-ticket consumer good, maybe things would change.

https://pbs.twimg.com/media/F2VANdobQAAVTvl.jpg:large

heavily subsidized items in which there is a the greatest disconnect between the price and what is actually paid, have seen the most inflation

Yeah, and I suspect colleges can keep adding amenities indefinitely because even if various individual students never take advantage of a particular feature, those can be a major selling point when competing to get more students to attend. So yeah, go ahead and add a rock-climbing wall, a beer garden, a third swimming pool, not like that money is doing anything useful anyway.

There's literally nothing stopping a college from competing on price by offering a stripped down experience (or use the Spirit Airlines model of charging piecemeal for each amenity) so students can see what exactly they're paying for, but there's simply no incentive that I can see for doing so. Price-conscious students aren't the ones they want attending, anyway!

I think the biggest threat to their model right now is, ironically, AI, both because it enables rampant hard-to-detect cheating and because AI will probably be able to replace most instructors in the extremely near future.

A university should be surrounded by dive bars.

In the US, increasing the drinking age and enforcing it ruined that.

How will Republicans responds to Biden's student loan giveaway?

I will admit I'm slightly surprised the Republicans haven't tried to weaponize student loans the opposite direction (just observing, not encouraging). For one, it seems they could probably convince fiscal conservatives to shoot for some kind of clawback for loan forgiveness: why should universities with huge endowments and non-profit status get to keep the tuition paid by students who haven't found value in their degrees? It seems easy enough to extract some fraction of that debt (not all forgiveness is the fault of institutions, like the disability claims) from future loaned tuition to those institutions. This would seem to be terrible for places like small liberal arts colleges and in general for specific programs ("X Studies") that the right has an axe to grind against.

The other avenue would be to use the threat of withdrawing funding against the institutions themselves: "Columbia University has garnered enough DOE complaints about national origin discrimination that we are reconsidering the eligibility of its students for federal loans starting with the incoming class in the fall of 2025." You don't have to screw over existing students: just the hit to the admissions pipeline from such a threat would probably be devastating to academic rankings.

Inez Stepman's recommended taxing university endowments, but I haven't seen it become a wider talking point.

Republicans lack the power to do that. They're not in charge of the executive OR the legislature, they have only a bare majority in one house.

I've advocated leaning into student loan forgiveness, on the condition that most of the funds are seized from university endowments and heavy taxes on the parties who benefit directly from the loans over the decades.

Or, if that angle somehow does not pass muster, then yeah, federal funds to university get cut until the balance is paid off.

Perhaps even better, if you're forgiving student loans, then also create a one-time tax credit applicable to anyone who successfully paid their loans down WITHOUT forgiveness. And then give a one-time payout to anyone who paid their own way though college out of pocket.

AND then provide some incentive/reward to people who eschewed college and went to trade school or hopped right into the workforce. Just full on jubilee, baby.

Just go absolutely ham on handouts ONCE, and try to shift as much of the 'burden' to the lefties, blue cities, and elites that brought stuff to this point.

And finally, tie the package to a requirement that student loans going forward are eligible for discharge in bankruptcy AND add in that no President can unilaterally discharge any such loans without approval from, say, 2/3 of congress.

You have to actually stitch up the gushing wound up after you've performed the lifesaving procedure.

heavy taxes on the parties who benefit directly from the loans over the decades.

I look forward to this meaning those of us who paid off our loans but are in the wrong industries get hit by this twice and those that didn't and are in the right industries get a double boon.

I look forward to this meaning those of us who paid off our loans but are in the wrong industries get hit by this twice and those that didn't and are in the right industries get a double boon.

The only way you could end up in the "wrong industry" under this policy is if you are actually taking part in the rent-seeking credentialism that these policies are trying to stop - in which case you actually deserve the penalty. But furthermore, keep reading the post - there's a tax credit for those who paid their loans back.

I've advocated leaning into student loan forgiveness, on the condition that most of the funds are seized from university endowments and heavy taxes on the parties who benefit directly from the loans over the decades.

I don't think that the universities with large endowments to raid have many highly indebted students.

Apparently in improv comedy, they have a rule that you can never say "no", you can only say "yes, and".

I feel that politics works the same way. One group comes begging for a handout. You can't say no because then you're the mean bad guy. So you say "yes, and", then give your own group twice as much.

I agree with everything you said. The floodgates have opened and it's time to "yes and" some payouts to actual workers at a rate much higher than we compensated the slackers. And universities should pay for it.

Republicans got the nickname “party of no” for this reason. They’re the only adult in the room when it comes to not spending ourselves into exponentially untenable inflation (aside from a few irrelevant third parties).

They’re the only adult in the room when it comes to not spending ourselves into exponentially untenable inflation (aside from a few irrelevant third parties).

This is a bald-faced lie - the GOP love spending the US into exponentially untenable inflation, they just prefer to do it by throwing tax-payer money into the MIC.

Yes, I’ve heard the “but what about military spending” gotcha plenty. Defense spending is currently the lowest it’s been in over 3 decades by percentages, between 11 and 13%. Socialized medicine and welfare comprise close to 50% of federal spending. And with new proposals to tax unrealized gains gaining momentum, going to war with the federal government over a 2% luxury tax on tea feels quaint by comparison.

The Iraq war came to 1-2 trillion though. That at least puts it (viewed as a single policy) in the same order of magnitude as the "inflation """reduction""" act"

Over how many years?

Reading the details, this strikes me as reasonable on the part of the Biden admin.

Two major caveats on what you've written:

  1. The news in the press release is about an additional 7.7 gigadollars for 160 kilopeople. Your figures are for the total over his entire term.
  2. This is, like all previous loan forgiveness by Biden, not a giveaway so much as letting people qualify for forgiveness programs for which they fell through the cracks. E.g. from here

Automatically cancel debt for borrowers who would otherwise be eligible for loan forgiveness under income-driven repayment (IDR) plans, like the SAVE Plan, or Public Service Loan Forgiveness but are not enrolled in those programs.

It's also forgiving loans for people on permanent disability. That one's a little more questionable - I imagine some "permanent disabilities" are sketchy at best. But, still not "free money for all."

I think it's important to acknowledge that this is (afaik) very much not a giveaway to all or even most loan holders, including those doing well. I'm against executive orders/overreach, and I want to see the government stop giving out loans for underwater basket weaving as much as the next Mottizan, but this is just much less crazy than it seems at a glance.

I'm against executive orders/overreach

The government gave out 167 billion dollars in free money entirely based on executive fiat.

Joe Biden tweeted this:

https://x.com/JoeBiden/status/1795969437595500905

The Supreme Court tried to block me from relieving student debt. But they didn’t stop me.

I’ve relieved student debt for over 5 million Americans. I’m going to keep going.

But it's not just the Supreme Court he is defying. The English common law system is based on the legislative branch controlling the purse. Joe Biden is overriding both of the other branches of government to reward a small subset of the American public. This is the definition of executive overreach.

The government gave out 167 billion dollars in free money entirely based on executive fiat.

The Public Service Loan Forgiveness program was authorized by congress in 2007.

It seems that this is a small sliver of the forgiven loans.

https://en.wikipedia.org/wiki/Public_Service_Loan_Forgiveness

OP's press release announced $7.7 billion of new forgiveness, $5.2 billion of which was PLSF.

I doubt PLSF represents 67% of the cumulative amount of forgiveness, but it doesn't seem to me like a "small sliver" based on the only evidence cited here.

OP says $167 billion have been cumulatively forgiven. My 2nd google result suggests that $53 billion had been forgiven based on the PLSF program by January 2024. So at worst 30% of the forgiveness, which is not a "small sliver".

https://americorps.gov/blogs/2024-01-12/five-things-know-about-public-service-loan-forgiveness

So only 120 billion of unconstitutional spending?

But I said I wasn't going to get into the weeds on this and I regret doing so. The fact remains that nearly $167 billion of government money was spent over the counterfactual of a Donald Trump presidency. In my opinion, this money was wasted in the worst way, giving large sums to people who are often quite privileged, rewarding them for their bad decisions. It was also a naked political attempt to win votes.

Future vote-buying attempts should focus on people who need it more and contribute more to society. Fortunately, we have lots of these people. Let's start with the working poor. Especially working poor people with children.

Perhaps 120, but maybe less. Those other programs might be constitutional as well. You assumed the full 167 wasn't, and look where that got you. Maybe we should look at the specific programs and the justifications behind their implementation by the executive rather than just assume whatever provides us with righteous anger.

I guess that would take too much time.

Edit: I think the original loan forgiveness program was a stupid, regressive waste. But your effort to draft is quite offputting. Doesn't feel like an honest sales pitch.

If we're going to just be giving money away, give it to the workers, not to excess elites.

It's not really going to elites. It's going to middle-class young women. They are both the beneficiaries of the loans (being the ones getting worthless humanities degrees) and the ones who's salaries are being paid with the loans (being the ones working in education and education administration).

The industries of choice for middle-class young women are 1. Education, and 2. Health Care. A few rhetorical discussion questions:

  • Where does government money seem to be flowing these days?

  • Which industries are being ravaged by cost disease?

  • What demographic forms the base of the Democratic Party?

I am not sure at the moment which way causality flows, but I do not believe these things are unrelated.

Yes, middle-class women are the modal beneficiary. One of the worst parts of the bailouts is that they discourage a lot of useful "women's work" the most useful of which is of course motherhood.

Just for a quick clarification, by "excess elites", I mean that they are not elite. They are aping the values of the elite, but there is no more room in the elite class. A true elite can spend 6 years studying literature at Williams and not need a government bailout. The same behavior is bizarre among non-elites and should not be subsidized.

I’m with Tomato. Assuming this is constitutional (apparently a big ask), it’s just as legitimate as tax cuts or farm subsidies or energy credits or every other education program. The minarchist pipe dream of a government without redistribution is not and never has been on the table.

It’s not ascribed to social justice, either. Sometimes that shows up, because it is fashionable, but messaging like the linked press release have nothing to say about the subject. No, it’s framed as relief for economic hardship.

Many of these loans were taken out with the expectation of securing a valuable job. If that didn’t materialize, who’s to blame?

  1. The lender, due to irresponsible bets
  2. The lender, due to bad luck
  3. The borrower, due to bad luck
  4. The borrower, due to being a dumb idiot who doesn’t know that history is a fake degree

If you believe 1 or 2, you have an excuse to support redistribution. Even if you subscribe to 3, there’s a possible justification; the government does have an interest in an educated populace. I think it’s the most compelling out of these, because teaching a generation that aspiring to a better job will actually prevent them from affording kids is burning the candle on both ends.

But it’s 4 that underpins the opposition. For those who believe that the beneficiaries are stupid, there’s barely any reason to soften the blow. And if one thinks they’re malicious, abusing the system to get an education they never intended to pay off…well. Might as well take one’s own slice, right?

That’s not to say I actually agree with the policy. It sucks and it only has the thinnest veneer of a justification outside of the class warfare. If nothing else, it’s contributing to the credential inflation which devalued degrees in the first place.

But throwing helicopter money at some other group? That’s the worst option. There’s no reason to do it unless you’re playing tit-for-tar against the least charitable version of your enemies. At that point, it’s all over but the crying.

Many of these loans were taken out with the expectation of securing a valuable job.

Expectations aren't the basis for loans. Do we think mortgages are invalid if the house burns down?

No, but loans are often granted only when the lender agrees to insure themselves against the house burning down. A world in which every high school graduate gets to see the insurance market's actuaries' estimates of their future income conditional on their resume and choice of school and major would be a much more interesting world.

Assuming an insurance market was allowed to exist, of course. I fear most voters still don't really get the concept of insurance as a way to pay E[X]*(1+p) for a benefit of X, rather than as a weird form of potential charity that would let us squeeze money for poor people from evil corporations instead of from government coffers if only we were brave enough to pass the right laws.

Sure they are. Expectations are definitely the basis for loans. Would people take a mortgage if they expected to be left footing the bill after a fire?

But that’s what I’m trying to get at. Imagine some city in California becomes uninsurable against fire. By default, the demand curve for homes will move left as fewer people are willing to risk holding all that debt. That drags down the clearing price of housing.

I can think of several reasons why the government might step in and put a finger on the scales. Some of them might apply to college debt, too.

[Edit: unclear wording]

It’s not a real expectation based on real data on the part of either party.

The student at least the ones I know are not looking at data, the expectations of employers in the field, the number of graduates per opening, or their own talents. Just for a trivial example, we graduate more BS in Psychology students every year than there are working psychologists in the USA. And it’s been that way in a number of fields for some time. Other fields have a very tiny demand for phd students, and no other real demand. Some teach skills that one can learn on their own by simple practice and peer review (mostly the arts). But I don’t see demand for poor bet degrees falling. People are still going to school and “expecting” to get a good job after graduation. Likewise, they’re not really being honest with themselves about what they can actually achieve. C students in high school and college simply are not going to stand out enough to get the internships they need to get the kind of jobs allow them to afford to repay that $40K a year in tuition loans. You aren’t going to do well in engineering if you’re not doing A to high B in physics and high level math. The thinking here isn’t based on reality but simply fantasy.

On the lender end, getting a student loan is much much easier than getting any other kind of loan. If you want a home loan, you need to have a good job, have had that job for a number of years, have excellent credit, and even then you’re limited in what you can get. You might only get approved for a small amount based on history. If you want a business loan, you need the steady income and good credit, but you also need a business plan, and one that makes sense to the bank. If you want a student loan, you just get one. No credit checks, no need for a strong work history, no grade requirement, no thought as to whether a major in X is worth the investment. Just sign here and take out the loans.

What I think the issue is coming from is the government backing of these loans. If the law were changed to allow defaults in limited cases, or after a given time frame, I think it would set both things to right. Kids would have to think, really think, about what they’re going to do after high school. If they want college they’d have to work to get in, work to keep grades high to keep their loans, and so on. They would be forced into getting useful skills in college rather than doing whatever sounded fun at the time.

Sure they are.

https://www.consumerfinance.gov/ask-cfpb/what-should-i-do-if-my-house-is-destroyed-in-a-natural-disaster-en-1521/

After a disaster you still have to pay your mortgage. Start by contacting your insurance company and mortgage servicer and if necessary, seek help.

Right. The usual way this is handled is the mortgagor takes out insurance, and not only that, they are required by the terms of the mortgage to insure against destruction of the property. If they don't, the mortgagee will buy insurance for them (usually at a very inflated rate) and charge them for it.

Sorry, I wasn’t clear.

Expectations are the basis for loans. People would take smaller mortgages if it wasn’t for insurance coverage. I’m not claiming that mortgages would be invalidated.

The minarchist pipe dream of a government without redistribution is not and never has been on the table.

Aside from when the Republic was founded, you mean. The question of “redistribution” was barely a question until the 20th century and the unionization of massive segments of the working population.

Hm. Perhaps the Articles of Confederation avoided it. If so, it’s only because they assumed states would handle the process.

You’re defining the term too narrowly. Think “40 acres and a mule”—the government has always sent people out to develop land in its interest. Maybe the 40 acres don’t count, if they weren’t taken from other citizens, but the mule? The garrisons, the infrastructure, the subsidies? They blur the line between buying favor and provision of public goods.

When we broke free of Britain, we spent American lives to give others a more favorable regime. When we bought French territory, we used American tax dollars to procure new land for our expanding population. By the middle of the century, we’d decided to redistribute the Southern economy rather drastically.

Governments exist because they provide a service which is otherwise hard to coordinate. Within a state, that implies redistribution.

Many of these loans were taken out with the expectation of securing a valuable job.

Were they?

I sincerely doubt that CS or EE majors are anything but underrepresented in the recipients of these bailouts. Which does point to a third possible party who has at significant share of the blame: universities themselves. They encourage students to take massive loans of dubious benefit with false advertising. More economically advantageous majors are often even limited in enrollment.

I don't hold the student loan debtors too responsible for the issue. They're young idiots who are told by pretty much everyone that it's a good idea to go on what's effectively a four year party vacation because they'll automatically get a good job afterwards. It's akin to someone who doesn't understand how interest rates work taking out a payday loan. But we really should be punishing the institutions that put them in that position.

those who fail to get jobs or only get low-paying jobs simply do not pay anyway. the bulk of payments is by people who get decent jobs.

Even if you subscribe to 3, there’s a possible justification; the government does have an interest in an educated populace.

credentialism is not the same as education. Below-market rate loans with extremely lenient repayment terms are the only way to make it affordable without having to impose price controls or controlling credentialism. Both sides like credentialism: employers get a large, prescreen population for hiring purposes, and the left gets to force their courses and ideology on the population. So the result is a distorted market.

Even if you subscribe to 3, there’s a possible justification; the government does have an interest in an educated populace. I think it’s the most compelling out of these, because teaching a generation that aspiring to a better job will actually prevent them from affording kids is burning the candle on both ends.

I think this one is wrongheaded and it's why the Republicans need an equal and opposite stimulus to undo the damage, and then hopefully, reach an armed truce.

The country doesn't need the kind of education that these loans are paying for. In fact, one of the criteria for forgiveness was the uselessness of the degree. From the press release:

Helping borrowers who enrolled in low-financial-value programs or institutions

We need people in the economy working, or studying for the purpose of that work, not studying useless things.

This is where the humanities professor says something like, "life shouldn't be all work and no play". And I agree! That's why we need relief for workers. Because workers deserve more pay, fewer hours, and better benefits. And all of this is harder to achieve if we pay and reward people for doing useless, even counterproductive, things.

We've already reached the point at which further education is mostly a net negative. I'm okay with it as a luxury good. But asking workers to pay for it is too much.

Is student debt forgiveness “buying votes” any more than tax cuts are? (I think both are bad at the current status quo).

Let's bring back stimulus check discourse.

Tax cuts represent income that was already earned, whereas student loan foreverness is more like a gift. But, agree they are similar in spirit

Would a student loan tax credit with identical bottom line implications be more legitimate than direct forgiveness?

No, but a reduction in marginal rates would. Lump-sum tax credits are basically welfare, with neutral or harmful incentive effects, while reductions in marginal rates have beneficial incentive effects.

The thing that's especially bad about blanket student loan cancellation is that it can't really be justified on either incentive or distributional grounds. That is, it doesn't encourage working harder or saving more, the way marginal rate cuts would, and it isn't targeted to people who are in particular need of help, the way traditional welfare is.

I think this is much worse for a few reasons:

  1. It was done unilaterally by the President without the authorization of Congress. It may even be unconstitutional.

  2. It was done in an election year, shortly before the election

  3. As opposed to tax cuts, which merely reduce one's obligation to the government, this is a gift. A person could have received this gift even if (in fact, especially if) they never paid any taxes at all

Obviously, vote buying is a spectrum and it's always part of the sausage. But this was an escalation, and the Republicans now need to match in kind.

This is kind of off topic, but... what reallly strikes me about that link is that the Department of Education has that great classic old seal with a tree on it that looks just fine, but instead of putting that as their logo on the website, they went with this terrible logo that looks like something you'd create in photoshop in 5 minutes.

the Department of Education has that great classic old seal with a tree on it that looks just fine

This is the Dept. of Education logo.

This is what it means to me.

Normally, when the government uses ugliness to flex on the public it looks like this.

I'm glad they can also do it in MS Paint.

I kind of like that building. It’s certainly not the worst brutalist design.

I was struck by this one when visiting Boston because of the effect it had on me. The picture doesn't do it justice. It really does loom over the vicinity in a menacing way, especially in contrast with the beautiful colonial buildings nearby.

Like, if a visitor came from the Middle Ages, he would probably assume that the Government Service Center was a fortress with a dungeon full of prisoners.

he would probably assume that the Government Service Center was a fortress with a dungeon full of prisoners.

Well, part of it was a psychiatric hospital back in the day.

...Okay, wait, what?

With a romanticised view of mental illness, Rudolph made the building “insane” in the hope that it would sooth those who dwell in it by reflecting the insanity they feel within.

Huh?

Straight out of Lovecraft...

shakes head

Okay, never mind, shit’s got to be haunted.

It's like the apartment building in Ghostbusters.

Honestly would make more sense for them (both politically and fiscally) to “buy” votes through raiding their political opponents. University endowments and cutting welfare are the obvious targets, but it might be interesting to see taxes on childless couples (framed as a general tax increase, but with exemptions for those with at least two kids).

Raiding university endowments makes a lot of sense. The academy is already so captured by the left that Republicans wouldn't lose many votes. It would also be tough for the left to oppose. "We're taking 10% from the rich and giving it to the workers."

A tax credit for the working poor who ALSO have dependent children might actually be the secret sauce. If we're going to buy votes, I think that group of people is possibly the most deserving of help.

For an added bonus, parents tend to vote much more republican than the general population, and it's unclear how much of this is mom's voting like their husbands and how much of this is differential fertility and how much of this is normal getting-more-conservative-as-you-age.

Okay, who are these “workers” you have in mind? Because looking at the press release, it’s something like 10% of loan holders. Not much spread across…welders. Or baristas, or whatever.

I'm not sure what you're referring to.

My original proposal was to give money to people who work 30 hours a week and get paid less than $30/hour. Because if we're doing payouts to random people, actual workers should get it, not people who took out ill-advised student loans and may often be quite privileged.

Giving it to workers with kids is even better. We need more workers with kids. We need less students pursuing useless degrees. Because, as you point out, few of the student loan forgivees will be doing anything useful like welding.

Raiding university endowments would be a wonderful way to pay for some of the cost.

Your proposal is starting to sound like an expansion of the EITC that excludes those with college loans.

That sounds like something Democrats might support and Republicans would never support.

My original proposal was to give money to people who work 30 hours a week and get paid less than $30/hour. Because if we're doing payouts to random people, actual workers should get it, not people who took out ill-advised student loans and may often be quite privileged.

Umm. Unless that 30h/week is the maximum, I fall into both groups. And while my home is ... unflattering, I do own it and the land its on, which makes my <$14/h paycheck go pretty far.

Biden already refunded most of my college debt in the first round, which ... made me kinda uncomfortable. As much as I'd like a raise, and maybe a big pile of money to fund personal projects, something about getting pander cash handouts from both parties ... makes me want to quote HPMoR Quirrell's reply to Hermione when she told him he was evil. I think something that ends in me wanting to quote Voldemort says something about either myself or the scenario; I'm just not sure which.

OK, OK, so I'm going to try and rationalize all this pandercash on the grounds that I'm probably going to be trying to recruit blind people for accessible gamedev work, so much of it will get redistributed to blind people with less economic power than me. ... Still feels sketchy.

As much as I'd like … a big pile of money to fund personal projects,

This is the point, right? If we’re going to splash the cash, let’s give money to people we know are working and productive and might use a bit of slack to do good things.

getting pander cash handouts from both parties

Rejoice. You are the ideal citizen ;-)

Can you link the speech?

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