Most estimates suggest roughly 85% of Americans will not benefit from President Joe Biden’s plan to forgive $10,000 in student loan debt for those who make less than $125,000. The plan is referred to as a “student loan forgiveness plan,” but the actual policy is to take the private debts of individuals and make the American taxpayer cover them. Eighty-five percent of Americans will not qualify for the plan. Of those who do, the majority are already in the upper middle class.
The upfront cost of this debt transfer from private citizens to the taxpayer will exceed all the inflationary reductions made in the Inflation Reduction Act. It will not only make inflation worse but will inflate college prices by providing a disincentive for colleges to rein in their tuition increases. Former President Barack Obama’s own economic adviser noted on social media that the plan will increase inflation by at least a quarter percent. The University of Pennsylvania’s Wharton School estimates the plan will cost each taxpayer in America $2,100 and fully cost $300 billion.
Progressives say taxpayers are not actually going to owe the money. Actually, taxpayers already paid the money to colleges on behalf of college students. Those students, in turn, contractually, voluntarily obligated themselves to pay the taxpayers back with interest. Forgiving that money means the taxpayers will not see a return on their advance. The government will have to cover that deficit by raising taxes, cutting government services or adding to the national debt. The latter will be the easy way out. That will increase debt service payments and reduce services from government over time, hurting the poor.
R&I – FS
RandyMarsh
Article URL : https://www.journal-news.net/an-immoral-and-terrible-public-policy/article_35efa653-8972-5b26-8a7e-5fd50f55f4b2.html