What if Joe Biden forgives all student loans?

A few days ago, The Washington Post reported that Joe Biden met with House Democrats and hinted that he is willing to relieve student loans.

The Trump administration had imposed a moratorium on paying off student loans due to COVID-19, which put many borrowers out of work, lasting until the end of August.

If the polls and the mood of the nation are any indication, it appears that the Democrats are on track to receive an emphatic shellacking in November's midterms.

Perhaps the Democrats in Washington are beginning to realize that even their base, particularly the old-school Democrats, are turned off by the Democrats' focus on peripheral issues such as climate change, abortion, and transgenderism, while they ignore the record-high inflation that is rapidly draining voters' savings, the supply chain crisis, the influx of illegal aliens, and numerous other Biden-made crises.

With only six months left until the midterms, the Democrats realize that the only way to enthuse and appease their base is to implement some of the very radical items that have always been on their list.  One of their most important voting bases is young voters, who frequently carry significant student loans.  They've been calling for debt forgiveness, which, of course, will amount to a freebie. 

Freebies are often used to bribe voters prior to elections with the hope that a record of misgovernance will be overlooked. 

The Democrat hope now is that the margins of defeat could be reduced, or perhaps victory can be snatched from the jaws of defeat where the races are close, if they can just hand out enough free stuff to get over the winning line. 

The other possible motive is that the Democrats want the consequences of their long-term damage to end up at the doorstep of the GOP, who are likely to take back the House and the Senate in November and the White House in 2024.  This could be a cynical ploy similar to a tenant damaging the house from where he is being forcibly evicted in order that the next occupant endures hardships.  They'd like nothing better than to hand out free stuff with taxpayer money and leave the GOP to pay the bill, in inflation, or whatever negative effects come of it.  Once the crises arise from a huge government giveaway, the Democrats and their media allies can blame the GOP. 

The forgiving of student loans has been on the agenda of far-left Democrats such as Bernie Sanders and Barack Obama since the days of Occupy! Wall Street.

Now that the far left has taken over the Democrat party, leading to the inmates running the asylum, all "centrist" Democrats such as Biden and Senate majority leader Chuck Schumer are compelled to nod in agreement. 

During the presidential campaign, Biden supported a plan of "forgiving student debt for low-income and middle-class people who have attended public colleges and universities" and "cancellation of a minimum of $10,000 of student debt per person" for individuals earning less than $25,000 per annum.

The Biden administration has already canceled more than $17 billion in student loans for 725,000 borrowers through targeted relief, for government bureaucrats in "public service" and for people who are permanently disabled.

It is easy to virtue-signal, claiming compassion and generosity for the downtrodden, while spending other people's money.

The Federal Reserve estimates that over 43.4 million students in the U.S. owe $1.73 trillion in loans.  The average federal student loan debt balance is $37,113.

Perhaps Biden will sign an executive order to relieve $10,000 in loan debts per student?  Perhaps the amount will be much higher?

If a significant percentage of these 43.4 million students who are of voting age vote Democrat, it could help them dramatically.

But someone has to pay for the losses, and hence the burden will fall on, you guessed right, the always exploited taxpayers.

Inflation is one consequence they will have to bear, as inflation comes — it always comes as a result of excessive federal money printing for government spending.  It also comes in the form of straight taxes.

What happens when taxes are raised?

The very wealthy who will be targeted for most of the taxes will reduce their investments in businesses and other ventures that generate jobs.  If matters persist, they will transfer their businesses and finances to business-friendly countries.  The result is that businesses close down within the U.S. or never form, all of which leads to higher unemployment.

For lower- and middle-class people, higher taxes will mean less spending on commodities and consumer goods, which means fewer sales for businesses, particularly smaller and medium-size businesses.  The economy after that is hit badly.

Let's say we go down that road, and the government forgives all student loans, because education is a right.  Why stop there?

Perhaps home loans could be forgiven, too, because every human being deserves to live with dignity under a roof.  Why should only students and homeowners be the beneficiaries?  How about forgiving loans of businesses?  Small businesses in particular suffered losses during the COVID-19 lockdowns, and they deserve to be bailed out.  Why just small, though?  Let's help big businesses, too, because they employ thousands of people.  What about farmers?  They literally are providers of food; why not waive their loans as well?  What about doctors who have set up practices? 

Quite soon, everybody from the big corporate houses to the smallest borrowers begins to feign poverty, because everyone knows that the government will pardon his loans.

What about those who acted with honor and dutifully paid off their loans, working around the clock, doing three jobs simultaneously?  Are they supposed to be the losers because they acted honestly?  Perhaps the government pays them as a token of appreciation for doing the right thing?

The case against forgiving loans weakens considerably when citizens learn of copious, gratuitous, and unaccounted government spending, especially on foreign nations.

Last month, Congress approved $13.6 billion in assistance to Ukraine, but the Biden administration claims that the funds were already used.  Biden is now requesting an additional $33 billion in aid for Ukraine.  The U.S. spending bill has dedicated $370 million to secure the borders of Islamic nations such as Jordan, Lebanon, Libya, Egypt, Tunisia, and Oman and  more than $40 million for "democracy programs for Venezuela."  Military interventions in Afghanistan, Iraq, Syria, and Pakistan have cost $6.4 trillion.

Those struggling to pay their loans have a right to wonder: if their government can spend their money on foreign nations, why not them?

What about helping only those "in need"?

But who decides the factors that qualify an individual as someone "in need"?  For everyone "in need," there will always be another individual in a harder situation.

Perhaps loan waivers should be given only to the very sick, the very elderly, and the disabled, who are struggling financially and really have no way to repay their loans. 

For financially struggling able-bodied individuals, extending payment periods can be an option.  But once again, favoritism toward one group means that those who paid their loans by working around the clock despite financial issues within the stipulated period go unrewarded.

There are no easy answers!

Image: Pixabay, Pixabay License.

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