The same can be said about financial sector bailouts, agricultural subsides and the outrageous 800 billions for “defense”.
Cancelling student debt is a lot cheaper than the F-35 program, more democratic and has a better return in terms of welfare.
I am all in for a more streamlined and lean State, but until that time, I think that Raytheon stock holders and Wall Street can share a bit of the current pie with the People
> and the outrageous 800 billions for “defense”. Cancelling student debt is a lot cheaper than the F-35 program
I think you are greatly underestimating or at least greatly under-appreciating the role of USA defense on the world stage. Why do you think EU and other USA allies can get away with spending so little on defense? They are basically outsourcing defense and weapons development to us. F-35 development went way over budget, but actually making one now is relatively cheap and will continue to get cheaper - cheap enough that an ally like Israel could purchase a dozen as a part of their smaller defense budget in the coming decades like they currently do with F-16s. Why is the global shipping industry so much lower risk that it was in decades past? The US Navy protecting shipping lanes is largely to thank.
I'm sure US DoD is worthy of many of its criticisms, including high budget, but it irks me to see the baby so eagerly thrown out with the bathwater at every opportunity.
> Cancelling student debt is a lot cheaper than the F-35 program
What math are you using? From wiki: "F-35 program's expected acquisition costs to $406.5 billion, with total lifetime cost (i.e., to 2070) to $1.5 trillion in then-year dollars which also includes operations and maintenance" [0] whereas there is currently $1.75 trillion student loan debt [1].
1.5 trillion in 2070 dollars is less than 1.75 trillion in 2022 dollars and the latter doesn't include the next 50 years of higher education funding.
> The same can be said about financial sector bailouts, agricultural subsides and the outrageous 800 billions for “defense”. Cancelling student debt is a lot cheaper than the F-35 program, more democratic and has a better return in terms of welfare.
The two have nothing to do with each other.
I am against the financial sector bailouts as well, but it's important to note that the 2008 $700 billion bailouts were paid back
>> Early estimates for the bailout's risk cost were as much as $700 billion; however, TARP recovered $441.7 billion from $426.4 billion invested, earning a $15.3 billion profit or an annualized rate of return of 0.6%, and perhaps a loss when adjusted for inflation.[3]
> I am all in for a more streamlined and lean State, but until that time, I think that Raytheon stock holders and Wall Street can share a bit of the current pie with the People
The people that will pay is taxpayers and consumers through higher prices. I'm fairly sure Wall Street will be fine
Regardless of the morality, SCOTUS will strike this down if and only if a litigant with standing files suit.
The speaker of the house herself affirmed recently that the president does not have the constitutional power to do this, and the court will likely agree. The president is using 9/11 educational legislation signed by Bush that focused on military and disaster victims for this blanket debt cancelation. It is a dramatic expansion of power that was never intended.
However, the court cannot consider the question unless someone can show actual harm by the president's action, and thus prove standing.
That standing may be denied in the trial court, but after a raft of appeals, SCOTUS may grant standing and remand. Then the trial begins, and we will have another set of appeals before us (and perhaps an injunction) when the trial concludes.
It will be a long and bitter road, strewn with disappointment, either way.
maybe. If it becomes normalized, it would alter the cost-benefit dynamic in degrees even more and not place as much pressure on pursuing a more valuable degrees. Hopefully this is a one-and-done and we can be more creative going forward, like providing more grants for deeper, more fundamental degrees like chemistry, math, computer engineering, manufacturing, etc.
> same can be said about financial sector bailouts, agricultural subsides
agree. we need to let companies properly decompose. It unintuitively creates more growth, and new companies are created from the ashes. Injecting old companies with formaldehyde creates sclerotic monoliths.
"I am all for a streamlined and lean State, but until that time, I'm happy for my side of the political aisle to waste money to accomplish its objectives."
You might as well have just said that. How about we say all the things you listed are bad and we should fight against all of them, and not justify any based on the others?
"Two wrongs don't make a right" - every parent to their children, basically.
$800 billion is high for defense, it's nowhere close to outrageous given the responsibilities the US has as the world's only superpower (see: helping Ukraine defend itself with an inevitable $100+ billion in funding), along with having the world's largest economy and the economic interests that go with that.
3% of GDP is not unreasonable for US military spending. US GDP is estimated to be around $25-$26 trillion for 2022.
What's outrageous are countries in Europe spending sub 2% of GDP on defense and relying on the US to defend Europe from Russia.
And where is the welfare return? It is a transfer of wealth towards a lucky and already privileged subset of the population, paid for by present and future taxpayers, many of whom are underprivileged.
The idea of welfare is wealth transfer from the more to the less privileged. But this seems like the opposite.
I'd say bailing out financial sector for fiscal imprudence was not right either?. On a grander scheme of things wouldnt making student loans normal like any other loan (ie death isn't the only way to get out of it) be the less predatory and ethical thing to do?
> More money available to debtors means more money to pay for rent, cocktails and avocado toast. So this could drive inflation. It won’t necessarily drive inflation but increasing disposable income of young people without much savings will likely increase their spending and the overall price levels.
Seems like this is the stuff that the economy is built on. The inclusion of "avocado toast" makes me think I know exactly where this guy stands on basically every political issue without looking any deeper into him, though.
> Or it could inflate asset prices as we’ve seen with the $12 trillion from Covid relief.
I'm not an economist (thank God), but there's no way that's what happened here. Asset prices increased due to restricted supply. There's no way that lumber prices tripled in mid 2020 due to "covid relief funds".
Besides, a ton of people were suddenly able to work from home and couldn't go out for fun. That meant saving huge amounts on gas and wear and tear on vehicles (or public transportation) and no more fun nights out to spend money on.
The inflation thing is hugely complicated. People like to blame it on the COVID checks like giving people a couple months rent over the course of 3 years is really sufficient to have a large effect on the economy.
In reality COVID stimulus didn't help (inflation specifically), but you can't just look to individual stimulus to see it, you also have to look at all the stimulus targeting businesses. Even then it's just one small factor. Supply shocks, Russia, sudden changes in consumer behavior, low interest rates and more all play in. It's not a simple problem with a single cause, but it's more satisfying to point and blame one factor some else is responsible for, so most discourse on the topic, even from those we'd hope would know better since they are in charge of fixing it, is worthless.
Anytime the government spends money on anything it prints money to do so. This is how governments work.
You aren’t against the government printing money. You are against why they are printing money.
It makes sense to print money and spend that money into the economy to accomplish a task if the result of that has a positive ROI.
Can we debate the ROI of the activity, rather than “inflation bad”, “printing money bad” or “politician bad”?
Using monetary policy as your point of disagreement is intellectually dishonest when your actual problem is with what the government is spending money on… and not the fact that the government is spending money at all.
> Anytime the government spends money on anything it prints money to do so. This is how governments work.
I'm sorry but this is complete, total and utter nonsense.
The government is supposed to work by collecting taxes and then spending these taxpayers dollars.
If the government wants to invest in something (like big infrastructure stuff), it's supposed to borrow money (for example by emitting bonds) and then pay that money back (even under keynesianism).
The European Central Bank's mandate specifically says that the ECB's role is to keep inflation in check.
Nowhere is it explained that any government spending can be realized by the government(s) printing money at will.
>Anytime the government spends money on anything it prints money to do so. This is how governments work.
That's just flatly untrue. This is one of HN's favorite misunderstandings about governments. If this were true, why would governments bother raising taxes or issuing bonds?
> Anytime the government spends money on anything it prints money to do so. This is how governments work.
According to some economists. Not all economists agree with this.
> Can we debate the ROI of the activity, rather than “inflation bad”, “printing money bad” or “politician bad”?
Essentially you are asking everybody to accept the debated point that you are making (Modern Monetary Theory) and then argue for their position while accepting yours as fact.
I disagree that government must print money in order to spend. We could use a system of private banks and physical backing as a medium of exchange instead of government money. Some countries transact trade in the US dollar. Are those mereley vassal states of the USA?
Traditionally US government proposes a spending program and some means to pay for and congress votes on it. How you pay for it could be through debt, existing funds or increase in taxes. This is something different.
It also muddies the water because it's not explicit how much it will cost, who will bear the burden not to mention no congressional oversight. This isn't like proposing a budget to build bridges. The is unilateral action by one person with unknown consequences.
I don't think govt. spending is always printing. Normally it spends tax money. I do am against govt. motivated printing (govt debt buying by central banks). As European I've seen my savings decimated last year, +18% yty cpi forecast in UK. When in the road to Venezuelan's 3000% inflation do we realize modern monetary "theory" (read 'agenda') implications?
It is insane how much more expensive college is now than when I went to college back in the 90s. I was able to pay off my student loans within 10 years of graduating because they were so much less than what current students are graduating with. And salaries certainly haven't increased enough in that same time span to make the pay off equivalent.
But, I think $10k or $20k is not enough. I think they should have looked at how much the cost of college has increased over the past 2+ decades and forgiven that percentage from every student loan.
Then they should fix the cause of tuition inflation by getting rid of the federal student loan program.
> But, I think $10k or $20k is not enough. I think they should have looked at how much the cost of college has increased over the past 2+ decades and forgiven that percentage from every student loan.
Your assumption is they were trying to fix a problem with tuition costs. They aren't. Fix the root problem to stop the bleeding and then treat the existing injuries.
This would be unfair to students who were frugal and chose a 20k-25k/yr COA state school with the assumption that their debt must be repaid.
Going to college is an investment that you ideally should plan for and weigh the benefits of the education vs the cost. If you don't think it's worth the 20-25k/yr COA at state schools (or whatever ridiculous amount at private schools) than just don't go. It absolutely is, but okay. This is an incentive to make good choices about college and be educated and productive post-college. But cancelling more debt would remove this positive externality.
> Then they should fix the cause of tuition inflation by getting rid of the federal student loan program
The problem with this is that it then returns college to being something that only those already financially well-off have the opportunity to take advantage of.
What's needed is either a more nuanced approach, or a more radical one, simply funding the colleges directly so that they don't have to charge tuition.
>> I think they should have looked at how much the cost of college has increased over the past 2+ decades and forgiven that percentage from every student loan
At which point colleges will raise tuition by that same amount.
To me what is missing from this debate is the long time effects of letting this increasingly loose wheel of education for profit gain further momentum.
If you let your educational institutions squeeze every last penny of your future well-educated doesn't that also limit your countries ability to innovate?
If my paycheck would go entirely towards rent and debt payments, I for sure would look for a high paying corporate job instead of startup or freelance work.
To me what is missing from this debate is the long time effects of letting this increasingly loose wheel of education for profit gain further momentum.
What are you talking about? For profit education is nearly dead - ITT, etc., Do you mean private schools?
No one can predict with certainty what's going to happen -- but I find that a LOT of these discussions are not very smart, owing to missing basic theoretical considerations.
The only thing that matters is goods and services. People getting stuff they want or need, the rest is accounting. So then:
When the government "prints money" (which happens a LOT) watch who it's going TO. If it's e.g. these larger biz PPP loans, probably not helpful because the rich get richer. Student loans? Will probably go to real people buying real things, so probably a better idea. Still might be long term problems eventually, but historically -- no one (especially economists) has ever actually been remotely accurate in being able to predict this.
I had an opportunity to go to college, and decided to do my own thing. This cancelling of student loan debt plan, although I understand the plight of young people in debt, it is also infuriating.
Myself: Was in college, left, did my own thing, becoming successful, now am paying taxes for everyone else who is getting bailed out. I already have state income tax to pay as well, and with housing prices and inflation being insane, saving for a down payment is miserable enough!
Everyone else in college: Often didn't know what they were doing, get free money that myself and others are paying for. Most people in my college weren't there for STEM.
Anyone who paid off their debt within the last few years: Screw you. Didn't matter if you were eating ramen to pay off that $10K for a few years, we just took care of it!
Future generations: Where is my bailout? They were so lucky a few years ago!
Colleges: Let's raise prices to get another bailout! In fact, let's repeat the cycle, feed the fire, and hope the government just starts handing out free universal college money every year! Then, we'll just adjust prices higher to compensate, the real college price will be basically the same, but our margins will be bigger!
It's bonkers. I don't like the debt, but this is a terrible plan. Why not (for example), just declare no federal income tax on a single cent of earned income for people making under $100K a year who have student loans and pay promptly? Or, let's say the degree I took has not been working out and I'm not getting jobs, maybe after a certain point I can declare bankruptcy on that debt. There are plenty of other methods to help.
That's perhaps my biggest problem with the bailout proposal. It targets the symptoms, not the cause, which makes it a de-facto Band-Aid on cancer.
I’ve said it before and I’ll say it again: Not every program has to be for everybody. People with apartments pay for first time homeowner benefits. Young people pay for Medicare for our seniors. People who take public transit pay for car infrastructure.
Maybe student loan forgiveness doesn’t impact you. That doesn’t make it bad. I am sure there are certainly other things that student loan borrowers’ taxes pay for. We can do good things and reject the scarcity mindset that says doing something good for someone else comes at the cost of something for ourselves.
An example: If a person is blessed enough to be in a position to have paid off their loans, maybe they have a home now and benefitted from first time homeowners programs that people crushed by student loans help subsidize when they aren’t able to buy a home because of student debt. It all comes around. It’s okay. We can support things we won’t directly benefit from.
Tuition increases have been ticking at around 2x-3x inflation for the past 25 years. It's not like the 70s or 80s when you could work during the summer and cover most of your expenses and then possibly take out a modest loan to cover the shortfall.
There ultimately needs to be some form of price control on tuition. Otherwise it just turns into, "well elite schools charge X so if we don't charge X*.95 people will think this is a school for rejects" since the only real signals in the market place are the price, average standardized test scores, and "prestige." Maybe in exchange for getting government grants and loans, they have to negotiate tuition rates with the federal government. They would be in a much better position to collectively bargain on behalf of the students, since the only option now is to either withdraw or grin and take it when they decide to hike the tuition.
Employment outcomes and default rates could be used in these negotiations. Lower than average employment prospects should be tied to lower than average tuition. Also, the overhead rates could be considered. This would put pressure on universities to curtail the sprawling administrative industrial complex.
You've introduced several hoops to jump through. And in order to make sure no one is cheating, you're going to need people to investigate. You've basically created a shadow welfare system. Because that's going to require people and training. The government will have to pay people to make sure the "wrong" people don't get money. You think a one-time payment of $10k to $20k is bad but want to replace it with yearly $50k payments. Every employee will have to find 3 to 5 fraudulent claims per year to just break even.
And why should you only get to discharge the debt if you don't get a job? What if you can't get jobs in the field your degree is mostly related to? If you get a job in an unrelated field, we could argue that your degree was also "meaningless" in that fashion. Although whether or not we should be treating college as "white collar vocational training" is another story.
You are paying taxes because that's your dues for living in the USA. You get things you want, I get things I want, they get things they want, and they're not all the same things. But through pooling our money and leveraging collective bargaining, we can make all of these things not only cheaper, but possible.
Even though I will not be benefiting from this student debt forgiveness, I support it.
The past generation or two of students essentially had the rug pulled out from under them — they were told by all the adults around them that going to college was the surefire path to a well-paid job in a world where well-paid jobs were becoming increasingly rare, making racking up the debt to do so worth it. So they went to college and took on that debt since that was the "right" thing to do, only to come out on the other end to find that getting a degree had little to no bearing on their ability to find a quality job after all and dooming them to working minimum wage jobs and barely scraping by for an indefinite period.
The biggest problem is that it isn't being paired with strict price caps on higher education, or at least restrictions on financial aid that render schools with unreasonable prices ineligible. Without that we're going to have another batch of kids-turning-adults in the same pickle in a few years.
As many of the comment here point out, you can view ALL government spending as money creation and All taxation as money destruction. The total money supply is the balance between the two. Except that banks and other credit issuers also generate new money. So there's that.
The whole worried hand-wringing over student debt as being terribly bad, but tax cuts, industry subsidies, and rich people loan forgiveness being intrinsically good is all very classist if you ask me.
This guy is very wishy-washy with his definitions and research, considering how strong his headline is. In order to fully answer the question of how cancelling student debt actually impacts money supply over the full lifetime of the loan, we'd have to know how exactly those loans were granted, as well as how the proceeds from collection are generally being used.
If those loans were granted through banks (effectively, regardless of what the sticker said) and those loans won't be repaid after the cancellation, then yes, this would be inflationary. If, however, the loans were originally paid out from the federal budget and the proceeds also went into the federal budget, then effectively this would result in an increase government deficit (resulting in an increase in government debt or reduction in government spending, or both, depending on your behavioral model of the government). The same goes if the loans were initially granted through banks and the government repays the bank loans even after cancelling the debt - it's not inflationary, it's deficitary.
Yes, it is. But keep in mind that the USA traditionally has been able to print a lot of money without having horrible inflation. USA can get away with this due to the petrodollar system and the fact that it's the world's reserve currency. Defense companies are an integral part of the petrodollar system: Iraq priced its oil in Euros, look what happened to them.
The one sentence of this article I zoom in on is that this increases the money supply over time. Well...yes it does, but that's not bad. The question is how much, who is getting that extra supply, and how is that changing things?
I have no problem with people under lots of student debt getting a 10k shot in the arm. We've spent more on projects that feel less good than this. However, it won't affect consumer behavior any time soon. Unless people's debts are ended, their spending habits won't change and this won't stimulate the economy. However, it does sound like democrats followed through on something, so it's a great political gimmick during election season. I say this as someone who tends to vote democrat.
Except due to the nature of student loans, it's possible an amount equal to the principal has been paid by now. Especially for those who have been paying for a while. Capitalization, deferment, the initial high interest rates, and the focus on "income based repayment" are a recipe for "forever loans". Which would please the lenders to no end.
But we don't talk about that when we talk about cancelling student debt. Because doing so points out just how fucked the entire racket is.
This is not allowing various companies to essentially seek rent in perpetuity from people. It's putting people's production back into their own hands.
One is not able to bankrupt out of student loans, unlike any other loan in existence.
So the problem is not the student loan amounts. It's how they're treated.
Life is long and filled with unforseen circumstances, that's why bankruptcy exists.
Businesses bankrupt all the time, Trump bankrupted I think 7 times?, We bailed out the banks for their faulty financial decisions.
But somehow we think it's ok to trap students who made the decision at a young age, and needed an education/job skills to survive, into a world of debt?
I understand that it's a way to be able to give loans to young people with low or no credit.
However, there's so many OTHER ways to deal with this, other than making students slaves to debt for a huge part of their life.
There's a bill introduced to address exactly this.. however it's been stuck in committee for over a year and is probably pretty hopeless.
On one hand you've got a generation that is being held back by these loans. The very people that are supposed to be starting businesses/building up capital/starting families and whom are the foundation of the future economy. When you view it through the lens of being an economic stimulus, it's actually a pretty good one and will likely be a net-positive in the long term.
On the other hand. While everyone is focused on the people who already paid theirs or who didn't get student loans to begin with, no one including this author ever properly addresses the impact on future students. As far as i can tell all future students are still going to have these huge loans (likely bigger) and this is a one time payout for current loan holders only. Those students are going to look back to now, see we got a one-time 10k payment courtesy of the taxpayer (which will be them) and rightly demand the same treatment. If they don't get it, they will view us as being just the same as the boomers were, cradle robbers that take advantage of the system and then take away the ladder once they are done.
We've essentially set in stone one of 3 paths. One, we periodically do these bailouts, probably blowing up tuition prices further so the students don't really benefit and the only winners are the loan companies+universities. Two, we commit to heavily reforming the system and fully paying for higher education. Or 3, we never do the bailout again and have future students not only pay for their own loans but service the debt we created just for ours as well. While i'd like for us to go with option 2, i don't think this is the likely path, it's too difficult and controversial to be done in the current political climate. The likely path, is that we're going to end up being just as morally bankrupt and selfish as the boomers collectively were.
College tuitions and the special nature of student loans vs all other loans have been printing money.
A correction is not only fair but overdue.
The only thing unfair about it is what about all the people that were more responsible and determined that they can't afford it and went without rather than go into that much debt? It does flatly screw them.
And as one of them, I still say do it, because that's still better and more fair than what been going on for the last 20 or more years.
[+] [-] elzbardico|3 years ago|reply
I am all in for a more streamlined and lean State, but until that time, I think that Raytheon stock holders and Wall Street can share a bit of the current pie with the People
[+] [-] umvi|3 years ago|reply
I think you are greatly underestimating or at least greatly under-appreciating the role of USA defense on the world stage. Why do you think EU and other USA allies can get away with spending so little on defense? They are basically outsourcing defense and weapons development to us. F-35 development went way over budget, but actually making one now is relatively cheap and will continue to get cheaper - cheap enough that an ally like Israel could purchase a dozen as a part of their smaller defense budget in the coming decades like they currently do with F-16s. Why is the global shipping industry so much lower risk that it was in decades past? The US Navy protecting shipping lanes is largely to thank.
I'm sure US DoD is worthy of many of its criticisms, including high budget, but it irks me to see the baby so eagerly thrown out with the bathwater at every opportunity.
[+] [-] mrep|3 years ago|reply
What math are you using? From wiki: "F-35 program's expected acquisition costs to $406.5 billion, with total lifetime cost (i.e., to 2070) to $1.5 trillion in then-year dollars which also includes operations and maintenance" [0] whereas there is currently $1.75 trillion student loan debt [1].
1.5 trillion in 2070 dollars is less than 1.75 trillion in 2022 dollars and the latter doesn't include the next 50 years of higher education funding.
[0]: https://en.wikipedia.org/wiki/Lockheed_Martin_F-35_Lightning...
[1]: https://www.nerdwallet.com/article/loans/student-loans/stude....
[+] [-] bko|3 years ago|reply
The two have nothing to do with each other.
I am against the financial sector bailouts as well, but it's important to note that the 2008 $700 billion bailouts were paid back
>> Early estimates for the bailout's risk cost were as much as $700 billion; however, TARP recovered $441.7 billion from $426.4 billion invested, earning a $15.3 billion profit or an annualized rate of return of 0.6%, and perhaps a loss when adjusted for inflation.[3]
> I am all in for a more streamlined and lean State, but until that time, I think that Raytheon stock holders and Wall Street can share a bit of the current pie with the People
The people that will pay is taxpayers and consumers through higher prices. I'm fairly sure Wall Street will be fine
https://en.wikipedia.org/wiki/Emergency_Economic_Stabilizati...
[+] [-] chasil|3 years ago|reply
The speaker of the house herself affirmed recently that the president does not have the constitutional power to do this, and the court will likely agree. The president is using 9/11 educational legislation signed by Bush that focused on military and disaster victims for this blanket debt cancelation. It is a dramatic expansion of power that was never intended.
However, the court cannot consider the question unless someone can show actual harm by the president's action, and thus prove standing.
That standing may be denied in the trial court, but after a raft of appeals, SCOTUS may grant standing and remand. Then the trial begins, and we will have another set of appeals before us (and perhaps an injunction) when the trial concludes.
It will be a long and bitter road, strewn with disappointment, either way.
[+] [-] devmunchies|3 years ago|reply
maybe. If it becomes normalized, it would alter the cost-benefit dynamic in degrees even more and not place as much pressure on pursuing a more valuable degrees. Hopefully this is a one-and-done and we can be more creative going forward, like providing more grants for deeper, more fundamental degrees like chemistry, math, computer engineering, manufacturing, etc.
> same can be said about financial sector bailouts, agricultural subsides
agree. we need to let companies properly decompose. It unintuitively creates more growth, and new companies are created from the ashes. Injecting old companies with formaldehyde creates sclerotic monoliths.
[+] [-] PathOfEclipse|3 years ago|reply
You might as well have just said that. How about we say all the things you listed are bad and we should fight against all of them, and not justify any based on the others?
"Two wrongs don't make a right" - every parent to their children, basically.
[+] [-] adventured|3 years ago|reply
3% of GDP is not unreasonable for US military spending. US GDP is estimated to be around $25-$26 trillion for 2022.
What's outrageous are countries in Europe spending sub 2% of GDP on defense and relying on the US to defend Europe from Russia.
[+] [-] jwarden|3 years ago|reply
And where is the welfare return? It is a transfer of wealth towards a lucky and already privileged subset of the population, paid for by present and future taxpayers, many of whom are underprivileged.
The idea of welfare is wealth transfer from the more to the less privileged. But this seems like the opposite.
[+] [-] flashgordon|3 years ago|reply
[+] [-] hahaitsfunny|3 years ago|reply
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[+] [-] larrik|3 years ago|reply
Seems like this is the stuff that the economy is built on. The inclusion of "avocado toast" makes me think I know exactly where this guy stands on basically every political issue without looking any deeper into him, though.
> Or it could inflate asset prices as we’ve seen with the $12 trillion from Covid relief.
I'm not an economist (thank God), but there's no way that's what happened here. Asset prices increased due to restricted supply. There's no way that lumber prices tripled in mid 2020 due to "covid relief funds".
Besides, a ton of people were suddenly able to work from home and couldn't go out for fun. That meant saving huge amounts on gas and wear and tear on vehicles (or public transportation) and no more fun nights out to spend money on.
[+] [-] Volundr|3 years ago|reply
In reality COVID stimulus didn't help (inflation specifically), but you can't just look to individual stimulus to see it, you also have to look at all the stimulus targeting businesses. Even then it's just one small factor. Supply shocks, Russia, sudden changes in consumer behavior, low interest rates and more all play in. It's not a simple problem with a single cause, but it's more satisfying to point and blame one factor some else is responsible for, so most discourse on the topic, even from those we'd hope would know better since they are in charge of fixing it, is worthless.
[+] [-] unknown|3 years ago|reply
[deleted]
[+] [-] kitanata|3 years ago|reply
You aren’t against the government printing money. You are against why they are printing money.
It makes sense to print money and spend that money into the economy to accomplish a task if the result of that has a positive ROI.
Can we debate the ROI of the activity, rather than “inflation bad”, “printing money bad” or “politician bad”?
Using monetary policy as your point of disagreement is intellectually dishonest when your actual problem is with what the government is spending money on… and not the fact that the government is spending money at all.
[+] [-] TacticalCoder|3 years ago|reply
I'm sorry but this is complete, total and utter nonsense.
The government is supposed to work by collecting taxes and then spending these taxpayers dollars.
If the government wants to invest in something (like big infrastructure stuff), it's supposed to borrow money (for example by emitting bonds) and then pay that money back (even under keynesianism).
The European Central Bank's mandate specifically says that the ECB's role is to keep inflation in check.
Nowhere is it explained that any government spending can be realized by the government(s) printing money at will.
[+] [-] NovemberWhiskey|3 years ago|reply
That's just flatly untrue. This is one of HN's favorite misunderstandings about governments. If this were true, why would governments bother raising taxes or issuing bonds?
[+] [-] tiahura|3 years ago|reply
In the US when the government spends on things money it comes from taxes or is borrowed. The Treasury doesn't print money.
Printing money is done by the Federal Reserve, but it is not done to finance general expenditures (bonds are different).
[+] [-] blendergeek|3 years ago|reply
According to some economists. Not all economists agree with this.
> Can we debate the ROI of the activity, rather than “inflation bad”, “printing money bad” or “politician bad”?
Essentially you are asking everybody to accept the debated point that you are making (Modern Monetary Theory) and then argue for their position while accepting yours as fact.
I disagree that government must print money in order to spend. We could use a system of private banks and physical backing as a medium of exchange instead of government money. Some countries transact trade in the US dollar. Are those mereley vassal states of the USA?
[+] [-] bko|3 years ago|reply
It also muddies the water because it's not explicit how much it will cost, who will bear the burden not to mention no congressional oversight. This isn't like proposing a budget to build bridges. The is unilateral action by one person with unknown consequences.
[+] [-] jesuslop|3 years ago|reply
[+] [-] unknown|3 years ago|reply
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[+] [-] fzfaa|3 years ago|reply
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[+] [-] irrational|3 years ago|reply
But, I think $10k or $20k is not enough. I think they should have looked at how much the cost of college has increased over the past 2+ decades and forgiven that percentage from every student loan.
Then they should fix the cause of tuition inflation by getting rid of the federal student loan program.
[+] [-] johncessna|3 years ago|reply
Your assumption is they were trying to fix a problem with tuition costs. They aren't. Fix the root problem to stop the bleeding and then treat the existing injuries.
[+] [-] yeeyeeyee|3 years ago|reply
This would be unfair to students who were frugal and chose a 20k-25k/yr COA state school with the assumption that their debt must be repaid.
Going to college is an investment that you ideally should plan for and weigh the benefits of the education vs the cost. If you don't think it's worth the 20-25k/yr COA at state schools (or whatever ridiculous amount at private schools) than just don't go. It absolutely is, but okay. This is an incentive to make good choices about college and be educated and productive post-college. But cancelling more debt would remove this positive externality.
[+] [-] danaris|3 years ago|reply
The problem with this is that it then returns college to being something that only those already financially well-off have the opportunity to take advantage of.
What's needed is either a more nuanced approach, or a more radical one, simply funding the colleges directly so that they don't have to charge tuition.
[+] [-] rufus_foreman|3 years ago|reply
At which point colleges will raise tuition by that same amount.
[+] [-] drewcoo|3 years ago|reply
Or nationalize some of those state schools and make school free.
If we nationalized some good schools and made them free, it should drive down the prices of the others, right?
[+] [-] WhatsName|3 years ago|reply
If you let your educational institutions squeeze every last penny of your future well-educated doesn't that also limit your countries ability to innovate?
If my paycheck would go entirely towards rent and debt payments, I for sure would look for a high paying corporate job instead of startup or freelance work.
[+] [-] tiahura|3 years ago|reply
What are you talking about? For profit education is nearly dead - ITT, etc., Do you mean private schools?
[+] [-] the_solenoid|3 years ago|reply
[+] [-] jrm4|3 years ago|reply
The only thing that matters is goods and services. People getting stuff they want or need, the rest is accounting. So then:
When the government "prints money" (which happens a LOT) watch who it's going TO. If it's e.g. these larger biz PPP loans, probably not helpful because the rich get richer. Student loans? Will probably go to real people buying real things, so probably a better idea. Still might be long term problems eventually, but historically -- no one (especially economists) has ever actually been remotely accurate in being able to predict this.
[+] [-] gjsman-1000|3 years ago|reply
Myself: Was in college, left, did my own thing, becoming successful, now am paying taxes for everyone else who is getting bailed out. I already have state income tax to pay as well, and with housing prices and inflation being insane, saving for a down payment is miserable enough!
Everyone else in college: Often didn't know what they were doing, get free money that myself and others are paying for. Most people in my college weren't there for STEM.
Anyone who paid off their debt within the last few years: Screw you. Didn't matter if you were eating ramen to pay off that $10K for a few years, we just took care of it!
Future generations: Where is my bailout? They were so lucky a few years ago!
Colleges: Let's raise prices to get another bailout! In fact, let's repeat the cycle, feed the fire, and hope the government just starts handing out free universal college money every year! Then, we'll just adjust prices higher to compensate, the real college price will be basically the same, but our margins will be bigger!
It's bonkers. I don't like the debt, but this is a terrible plan. Why not (for example), just declare no federal income tax on a single cent of earned income for people making under $100K a year who have student loans and pay promptly? Or, let's say the degree I took has not been working out and I'm not getting jobs, maybe after a certain point I can declare bankruptcy on that debt. There are plenty of other methods to help.
That's perhaps my biggest problem with the bailout proposal. It targets the symptoms, not the cause, which makes it a de-facto Band-Aid on cancer.
[+] [-] dctoedt|3 years ago|reply
<quote>
I’ve said it before and I’ll say it again: Not every program has to be for everybody. People with apartments pay for first time homeowner benefits. Young people pay for Medicare for our seniors. People who take public transit pay for car infrastructure.
Maybe student loan forgiveness doesn’t impact you. That doesn’t make it bad. I am sure there are certainly other things that student loan borrowers’ taxes pay for. We can do good things and reject the scarcity mindset that says doing something good for someone else comes at the cost of something for ourselves.
An example: If a person is blessed enough to be in a position to have paid off their loans, maybe they have a home now and benefitted from first time homeowners programs that people crushed by student loans help subsidize when they aren’t able to buy a home because of student debt. It all comes around. It’s okay. We can support things we won’t directly benefit from.
</quote>
https://news-papers.co.uk/news/38704/advocating-for-student-...
[+] [-] ok123456|3 years ago|reply
Tuition increases have been ticking at around 2x-3x inflation for the past 25 years. It's not like the 70s or 80s when you could work during the summer and cover most of your expenses and then possibly take out a modest loan to cover the shortfall.
There ultimately needs to be some form of price control on tuition. Otherwise it just turns into, "well elite schools charge X so if we don't charge X*.95 people will think this is a school for rejects" since the only real signals in the market place are the price, average standardized test scores, and "prestige." Maybe in exchange for getting government grants and loans, they have to negotiate tuition rates with the federal government. They would be in a much better position to collectively bargain on behalf of the students, since the only option now is to either withdraw or grin and take it when they decide to hike the tuition.
Employment outcomes and default rates could be used in these negotiations. Lower than average employment prospects should be tied to lower than average tuition. Also, the overhead rates could be considered. This would put pressure on universities to curtail the sprawling administrative industrial complex.
[+] [-] bena|3 years ago|reply
You've introduced several hoops to jump through. And in order to make sure no one is cheating, you're going to need people to investigate. You've basically created a shadow welfare system. Because that's going to require people and training. The government will have to pay people to make sure the "wrong" people don't get money. You think a one-time payment of $10k to $20k is bad but want to replace it with yearly $50k payments. Every employee will have to find 3 to 5 fraudulent claims per year to just break even.
And why should you only get to discharge the debt if you don't get a job? What if you can't get jobs in the field your degree is mostly related to? If you get a job in an unrelated field, we could argue that your degree was also "meaningless" in that fashion. Although whether or not we should be treating college as "white collar vocational training" is another story.
You are paying taxes because that's your dues for living in the USA. You get things you want, I get things I want, they get things they want, and they're not all the same things. But through pooling our money and leveraging collective bargaining, we can make all of these things not only cheaper, but possible.
[+] [-] kitsunesoba|3 years ago|reply
The past generation or two of students essentially had the rug pulled out from under them — they were told by all the adults around them that going to college was the surefire path to a well-paid job in a world where well-paid jobs were becoming increasingly rare, making racking up the debt to do so worth it. So they went to college and took on that debt since that was the "right" thing to do, only to come out on the other end to find that getting a degree had little to no bearing on their ability to find a quality job after all and dooming them to working minimum wage jobs and barely scraping by for an indefinite period.
The biggest problem is that it isn't being paired with strict price caps on higher education, or at least restrictions on financial aid that render schools with unreasonable prices ineligible. Without that we're going to have another batch of kids-turning-adults in the same pickle in a few years.
[+] [-] Eddy_Viscosity2|3 years ago|reply
The whole worried hand-wringing over student debt as being terribly bad, but tax cuts, industry subsidies, and rich people loan forgiveness being intrinsically good is all very classist if you ask me.
[+] [-] neves|3 years ago|reply
This is an empty argument.
[+] [-] t_mann|3 years ago|reply
If those loans were granted through banks (effectively, regardless of what the sticker said) and those loans won't be repaid after the cancellation, then yes, this would be inflationary. If, however, the loans were originally paid out from the federal budget and the proceeds also went into the federal budget, then effectively this would result in an increase government deficit (resulting in an increase in government debt or reduction in government spending, or both, depending on your behavioral model of the government). The same goes if the loans were initially granted through banks and the government repays the bank loans even after cancelling the debt - it's not inflationary, it's deficitary.
[+] [-] jhallenworld|3 years ago|reply
https://www.cse.unsw.edu.au/~norman/CurrentAffairs/DeeperNew...
https://www.investopedia.com/articles/forex/072915/how-petro....
Anyway, with this as a given, why should only the rich benefit? Printing some money for the rest of us is only fair.
[+] [-] lcall|3 years ago|reply
https://news.ycombinator.com/item?id=32551475
https://news.ycombinator.com/item?id=32584745
[+] [-] ur-whale|3 years ago|reply
And printing money is essentially an invisible (boiling the frog) tax which hurts the lower rungs of society the most.
Historically, it has never ended well, in spite of what all the Krugman sycophant types keep trumpeting to please and enable the power that be.
[+] [-] madrox|3 years ago|reply
I have no problem with people under lots of student debt getting a 10k shot in the arm. We've spent more on projects that feel less good than this. However, it won't affect consumer behavior any time soon. Unless people's debts are ended, their spending habits won't change and this won't stimulate the economy. However, it does sound like democrats followed through on something, so it's a great political gimmick during election season. I say this as someone who tends to vote democrat.
[+] [-] bena|3 years ago|reply
But we don't talk about that when we talk about cancelling student debt. Because doing so points out just how fucked the entire racket is.
This is not allowing various companies to essentially seek rent in perpetuity from people. It's putting people's production back into their own hands.
[+] [-] edmcnulty101|3 years ago|reply
So the problem is not the student loan amounts. It's how they're treated.
Life is long and filled with unforseen circumstances, that's why bankruptcy exists.
Businesses bankrupt all the time, Trump bankrupted I think 7 times?, We bailed out the banks for their faulty financial decisions.
But somehow we think it's ok to trap students who made the decision at a young age, and needed an education/job skills to survive, into a world of debt?
I understand that it's a way to be able to give loans to young people with low or no credit.
However, there's so many OTHER ways to deal with this, other than making students slaves to debt for a huge part of their life.
There's a bill introduced to address exactly this.. however it's been stuck in committee for over a year and is probably pretty hopeless.
https://www.congress.gov/bill/117th-congress/senate-bill/259...
[+] [-] bigdollopenergy|3 years ago|reply
On one hand you've got a generation that is being held back by these loans. The very people that are supposed to be starting businesses/building up capital/starting families and whom are the foundation of the future economy. When you view it through the lens of being an economic stimulus, it's actually a pretty good one and will likely be a net-positive in the long term.
On the other hand. While everyone is focused on the people who already paid theirs or who didn't get student loans to begin with, no one including this author ever properly addresses the impact on future students. As far as i can tell all future students are still going to have these huge loans (likely bigger) and this is a one time payout for current loan holders only. Those students are going to look back to now, see we got a one-time 10k payment courtesy of the taxpayer (which will be them) and rightly demand the same treatment. If they don't get it, they will view us as being just the same as the boomers were, cradle robbers that take advantage of the system and then take away the ladder once they are done.
We've essentially set in stone one of 3 paths. One, we periodically do these bailouts, probably blowing up tuition prices further so the students don't really benefit and the only winners are the loan companies+universities. Two, we commit to heavily reforming the system and fully paying for higher education. Or 3, we never do the bailout again and have future students not only pay for their own loans but service the debt we created just for ours as well. While i'd like for us to go with option 2, i don't think this is the likely path, it's too difficult and controversial to be done in the current political climate. The likely path, is that we're going to end up being just as morally bankrupt and selfish as the boomers collectively were.
[+] [-] Brian_K_White|3 years ago|reply
A correction is not only fair but overdue.
The only thing unfair about it is what about all the people that were more responsible and determined that they can't afford it and went without rather than go into that much debt? It does flatly screw them.
And as one of them, I still say do it, because that's still better and more fair than what been going on for the last 20 or more years.
[+] [-] unknown|3 years ago|reply
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