Half a trillion to buy votes?

WSJ Freelink Redistribution to the wealthy

Leaving aside the morality of indebting those who did not incur debts to buy the votes of those who did, where does Biden get the authority, absent an act of Congress, to give away half a $trillion of the public’s money. Even Pelosi says he doesn’t have the authority.

Go ahead, tell me how this isn’t wrong.

44 thoughts on “Half a trillion to buy votes?

  1. I am generally in favor of loan forgiveness, and not just student-loan forgiveness. My model for thinking this way is based on the economics of the ancient practice of debt jubilee (see Wikipedia).

    Joe Biden’s student-loan forgiveness bears no resemblance to a debt jubilee. A true jubilee would erase debts across a whole economy; erase, not pay off. Biden’s plan will erase the debts of only a very small part of the economy and it will do so by paying off the selected debt with taxpayer money (or deficit spending). No debt will be canceled outright.

    In fairness to Stumble Joe, it is probably impossible to implement classical debt jubilees in modern economies which have never known them. Creditors would howl, for one thing, and there are few national leaders today with the absolute power of a king to overrule creditors’ objections. Also, it would take time for a modern economy to learn how to accommodate occasional or recurring debt cancellations across the board as a matter of standard practice.

    Rulers of the ancient world learned that debt, especially debt that must be repaid with interest, tends to enslave and subjugate persons. Eventually, enough people become trapped that the economy begins to falter. At that point, it is better to take the pain of debt cancellation than to suffer continuing economic decline.

    Biden’s student loan plan seeks to avoid the pain of debt cancellation, but there is no real avoidance in it. Instead, the plan will buy the happiness of a few citizens today, while debt enslavement continues to expand throughout our economy, leading inexorably toward a debt crisis for us all.

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  2. Yep, Biden bucks flow like water through the liberal vote buying hands. It is a disgusting display of throwing money we don’t have to play political grandstanding at the expense of those who were responsible or didn’t go to college at all. If these “college” students made a contract with the government make them pay their debt whether they overspent or not. You buy it, pay for it!!

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    1. There’s a lot of unfairness in the Biden plan. For example, some college students paid their own way through school to graduate without debt. Do they qualify for a reimbursement from Biden? If not, why not?

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  3. RE: “where does Biden get the authority, absent an act of Congress, to give away half a $trillion of the public’s money?”

    Good question.

    There’s a theory that the HEROES Act gives the Department of Education “broad authority to waive or modify student loans to alleviate hardships brought on by national emergencies.”

    https://nypost.com/2022/08/24/pelosi-flip-flops-on-bidens-student-debt-forgiveness-plan/

    I don’t buy it, though, on the principle that no one has the right to do wrong. Biden’s plan is wrong in and of itself. Therefore he has no authority to implement it.

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    1. The memo is interesting in a number of ways.

      First, it documents an instance in which Congress ceded its constitutional authority to the Executive.

      Second, it establishes that the Department of Education may cancel student debt categorically, not just on a student-by-student basis.

      Third, it says nothing about DOE’s authority to reimburse creditors for their losses due to categorical debt cancellations.

      The third point is significant because normally all appropriations must be specifically approved by Congress. Here the loans being canceled are federally guaranteed loans, so while the necessary appropriation may already be on the books, I wonder whether the guarantee can be applied on a categorical basis.

      If that is the presumption, it is a very sloppy way to run the government.

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      1. Well, I am sure that the Biden government is prepared to address and defend any and all legal aspects of this program. Politically, they will undoubtedly welcome such challenges from the Republicans.

        FWIIW, my children finished their education without debt through work and my help. Personally, I was paying on student debt for more than a decade. None of them nor I feel aggrieved that others are getting the help we did not get. I believe, given what a mess student debt has become, helping in this way will be seen as the right thing by most people and especially by young people. The cost to all of us is a fraction of the cost of tax giveaways by previous Republican administrations. If we could afford that, we can afford this. IMHO.

        Liked by 3 people

      2. RE: “None of them nor I feel aggrieved that others are getting the help we did not get.”

        FWIW, your virtue is not the issue. I’m sure there are many families that paid off a child’s student debt who now feel very differently about it than you do.

        Apart from the legal and governance questions Biden’s plan inspires, the basic economics is not favorable. One could clean up the mess simply by cancelling the loans, but paying them off redistributes wealth from one part of the economy to another for no good reason.

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        1. RE: “You don’t think much of people do you?”

          Non sequitur. As stated, I don’t think much of your virtue.

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    2. So the responsible people in the room are whiners and haters? Nice start to an immature tirade. So when all of these poor college students, who supposedly couldn’t understand the contract they signed for student loans, decide to spend beyond their means again and buy a Mercedes or $70G Tesla, are you suggesting taxpayers should bail them out of that too? Poor sweethearts…

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        1. So you and Adam can only reply to questions or opinions you dont like with angry, immature and ignorant retorts of hater, whiner and racist? Is that all you have your extremist left wing socialist bag of babble? Got it…

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      1. I guess we will see.

        As I said, such court challenges whether successful or not will be a political win for Presiden Biden. He ran on a promise to do something about the ruinous debt millions of younger people are struggling with. They will remember who was for helping them and who was not.

        Liked by 1 person

  4. Were you equally aghast when the government “forgave” Wall Street with TARP? Or when PPP loans were all wiped away? (Both of which “cost” more than the current student loan plan)

    I’ll also remind you all that much of your wealth is in the value of your home(s). That wealth is contingent upon someone theoretically being able to purchase it from you. Forgiving student loan debt creates an entire generation of home buyers who buttress your retirement.

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    1. I very much was pissed about TARP. You might remember that I suggested bankruptcy for the TARP recipients.

      PPP is different, as people were forced to close their businesses by the government against their will .

      Student loans are different. You shouldn’t take one unless the degree increases your earning power enough to pay it.

      Someone who borrowed money for a degree in cat gender studies deserves his problems

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          1. I know you’ve seen all the same charts I have—the ones where cost of living and university tuition are growing rapidly while wages remain stagnant. Those are government decisions. Just like it was a government decision to double the interest rates on all of our loans after the 2008 mess. They’ve been subsidizing the wealthy and unilaterally altering our loan details to plug the gap.

            Liked by 1 person

          2. “Natural risks can be insured against”

            The insinuation in your statement is that the government was responsible for COVID. Seeing as it happened on TFG’s watch, Maybe we can agree. 😇

            Liked by 1 person

      1. “ Someone who borrowed money for a degree in cat gender studies deserves his problems.”

        Funny, but here is the thing. Basic research is the keystone for much of what we cherish. The seemingly unrelated science often evolves into medical and scientific advances we all enjoy and benefit from.

        If we only value MBA’s and finance degrees, we are just churning money for profit. All well and good as far as it goes. Investors won’t like cat gender research until suddenly it opens the door to solving a human issue, like dysphoria. Hypothetically, of course, in this example. But certainly not out of the realm of past successes.

        As I posited earlier, reducing the costs of higher education is much better than loan forgiveness. Loans make scam schools profitable. Subsidies to schools can at least require accountability and accreditation.

        Think GI Bill. Without discrimination, of course.

        Liked by 2 people

        1. The artificially high demand for college resulting from cheap and possibly forgiven loans, and subsidies like Pell Grants is the reason for high costs in secondary education.

          If we truly need experts in cat gender studies, that is a field to be filled by trust fund kids or scholarships from cat food companies,

          Education loans should go only toward degrees that have a commercial value.

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          1. Some does, but that isn’t where the excess costs come from.

            There are too many students who don’t belong in college pursuing degrees that have no career value.

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          2. Possibly. But since WW2, there’s been drumbeat for a college degree as the goal of success.

            So many comments over the years from conservatives have charged that low income folks in menial jobs need to study hard and get a degree.

            We all know that college is not for everyone. We all know that financial rewards can and do come from skilled work such as electrical, welding, plumbing, baking etc. Yet, as a country we saved our best respect for the degrees that lead to professions.

            Marketing took care of the rest.

            The problem of student debt has a lot of parents. I seem to recall the comments of leaders and pundits saying the big hidden bomb we have is student debt. This program should help defuse that somewhat.

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          3. You said commercial value, not career value. Basic research has no commercial value per se. Until it does, which could be years or even decades down the road. But the scientists who work in that field need to be highly educated with masters and doctorates. Expensive education to be sure. But the pay is not Harvard MBA level by any means.

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          4. Yea, what percentage of college graduates actually accomplish anything like that?

            How many poly sci and journalism majors, much less cat gender studies graduates contribute anything useful with their expensive educations?

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          5. We could use a lot more poly sci and journalism majors judging by the quality of both in todays political climate.

            IMO

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          6. That’s absurd. If demand is strictly a function of price, as you suggest, why would demand have grown once college got expensive vs a few decades prior when it was basically free (or actually free in some states?) The demand came from your generation stripping the copper from the walls of any labor protections, well paying jobs, or safety net this country may have had (including affordable education), and then telling my generation we had better go to college if we wanted even a glimpse of the middle class.

            Incidentally, do you happen to recall how much a semester of dental school cost when you were attending?

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          7. Less than now. I got a loan, but from a private bank and the loan officer looked into my academic history to be sure I was capable of completing the curriculum and that there was enough need for dentists that I would be able to repay it.

            The Federal program does none of that.

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          8. Didn’t say that’ what it cost, said that’s what I had to borrow. I worked my ass off during and before going to dental school to minimize borrowing.

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          9. We ALL did that. The difference is, your wages were significantly higher, and your tuition significantly lower. And did your loan holder double your rates on a whim to make up for deficits elsewhere in his balance sheet? Because mine did.

            It’s $10k, man. That doesn’t even cover the interest that has accrued on my loans since I started paying like 10 years ago.

            Liked by 1 person

          10. Nobody ever asks about inflation when they’re cutting taxes for rich people, increasing defense budgets, or giving money to one of our many puppet states abroad—only when we’re talking about something that helps working people.

            Also, that’s 43 million people that now have money to spend on actual things in the actual economy.

            Also, Goldman of all places has said they don’t expect this to have any effect on inflation.

            Liked by 1 person

      2. Without TARP, bankruptcies would have made little difference to the thieves at the top. In fact, often those who are credited with the “taking us out of bankruptcy” make even more money.

        The “screwees” would be the millions of workers, small businesses and retirees who would suffer huge losses. That, in my opinion, was the leverage for investment institutions like GS who were made whole, as in 100%, by the government. “Too big to fail” was the mantra.

        Rock and a hard place. Perversely, we had to pay off the ultra wealthy to keep the rest of us from destitution.

        In a nutshell, of course.

        Liked by 2 people

  5. A recent editorial I saw in passing said that it is better to take care of the expenses of higher education up front than forgiving huge loans after the fact.

    We did something like that with the GI Bill that turned a generation of young men and women (White, since Blacks could not choose most schools) into college educated professionals, engineers, financiers, etc.

    Subsidies for state colleges and universities have dropped evidently, so all the costs need to be recouped via students and their tuition and fees.

    That being said, I am sure that most of the large, well reputed schools can cut costs dramatically. We are no longer in the “rah, rah sis boom bah” heyday of frats and affordable education.

    Liked by 3 people

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