Joe Biden unveils new plan to saddle Americans with $1.6 trillion in student loan debt
Joe Biden is in trouble. His Democrats are collapsing at the polls based on his disastrous first term and now midterms are around the corner.
What's a failed president to do? Dole out the goodies, of course, some big ones in a desperate bid to win back younger leftist voters.
According to CBS News:
President Biden is looking at different options to forgive an unspecified but substantial amount of federal student loan debt — a move that would thrill some of his most loyal supporters and financially strapped students nationwide, but is a departure from campaign pledges to provide limited relief.
The president shared his plans during a 90-minute White House meeting Monday with members of the Congressional Hispanic Caucus, participants in the exchange tell CBS News. The move could affect more than 43 million borrowers who hold more than $1.6 trillion in federal student loan debt, the second-largest debt held by Americans, behind mortgages.
Legal Insurrection's Mike LaChance summed up the obvious motive in the sudden Biden play to cancel out student debt:
Frankly, considering Biden’s poll numbers, this looks like nothing more than an attempt to buy votes.
What could go wrong with that?
Well aside from the disgust that many Americans would feel at having scrimped and saved to pay off their own student debts as those who took on too much debt get off scot-free -- the delayed home purchasing, the delayed vacation, the choice of a state school over a prestigious private one to avoid taking on too much debt, or the choice to take up a trade instead of a college education, there are also other problems with the entire process.
First, this one would probably bypass Congress. Legal Insurrection, citing CNN, noticed this bit of buried news, emphasis added:
Her comments on the discussion come amid reports that Biden strongly indicated during the meeting that he would take action on the issue through executive authority.
The whole thing would be done with Joe's pen and phone, bypassing the democratic process entirely by getting around Congress, which constitutionally holds the power of the purse.
Congress, as it happens, is starting to reject Joe's huge multi-trillion dollar programs on fiscal discipline grounds, which is why Biden's $1 trillion-plus "build back better" goodie bag of government spending didn't make it out of Congress.
Here's a comparable spending package, and Joe's just going to sign it away.
Here's the beginning problem with it that Joe likely does not understand in the least: In signing away the debt writeoffs, the money doesn't just go away. The banks are certainly going to get paid or they'll go under. The federal government is going to pay -- and it's not the federal government, of course, but the U.S. taxpayer. Americans could actually see a tax hike if Biden declares a writeoff on $1.6 trillion in debt, or a large chunk of it.
That's plumbers and carpenters paying for debt writeoffs of rich law school graduates and unemployed womyn's studies majors whose school work largely amounts to left wing activism and talking points. Sound like a bargain?
The indebted-student borrowers, of course, aren't entirely to blame for this. University costs went up the minute President Obama and Vice President Joe Biden opted to nationalize the country's student loans, while earlier congressional activity made it impossible for students to discharge bad debt in bankruptcies. Universities from that could see those activities that it was open season to hike tuition instead of provide value for the student. Obama's and Biden's acts sent them the signal that they'd always get repaid with interest no matter how much they lent out, so the more they lent out, the better. It was a dinner triangle for them, and they expanded their operations and their diversity bureaucracies and their lavish sports programs with alacrity.
Now Biden is proposing a bailout, with absolutely no changes to this can't lose setup for the universities. If he were a double-entry bookkeeping man, he'd tax the universities and their endowments to pay for this fiasco, but as it is, he just wants the plumbers to pay for it.
Now we get to the bad part:
Not only will plumbers be paying for the educations of rich lawyers and activists with junk degrees, everyone will be paying for it through higher inflation. $1.6 trillion is the kind of number that's been out there in the five or six federal spending packages that Democrats have moved through Congress dating from the Obama era, and the real reason why inflation is so high all over the place. Biden is blaming Putin and Big Oil for the current inflation, but those are smokescreens. Inflation is always and everywhere a monetary phenomenon, as Milton Friedman has famously said, so the $1.6 trillion debt forgiveness will have to be financed by more money printing from the Federal Reserve. Net result? More inflation baked into the cake to filter down through society.
Meaning, Joe's pandering to the far left on student loan debt, and his bid to win back younger voters, who have abandoned him in droves, is an outrageous tax on the rest of us, as inflation always is. Joe isn't interested in alleviating it, he's out to expand it and promote it with this votes-for-debt cancellation. It ought to be fought to high heavens, given how bad it could be. Its nothing but pandering for votes ... on our dime.
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