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Student Loans. Medical Debt. Criminal Justice Fees. Cancel It All.
- raxxorrax 5y agoI mean with the amount of state debt many countries have acquired, would it even make a difference? Although admitting that too willingly probably could trigger some form of crash.
- karaterobot 5y agoThe linked article doesn't even attempt to explain how such a plan would work, or could feasibly work. But it does link to at least one more thorough source[1] that tries to rationalize the economics. I'm still not sure I understand how such a plan overcomes the obvious objections, but that source is a bit better. [1] https://www.ineteconomics.org/perspectives/blog/its-time-for-a-debt-jubilee https://www.ineteconomics.org/perspectives/blog/its-time-for...
- cpr 5y agoSure, what could go wrong? Everything should be free... Sheesh, folks, as Maggie Thatcher once supposedly said, the problem with socialism is that you eventually run out of other people's money.
- draw_down 5y agoThe political problem is there’s no constituency or patronage group here. Speaking again just from a political perspective, this is flushing money down the toilet. You’re helping everyone horizontally, not some group that will help you get re-elected or build up political capital you can use later. As opposed to something like canceling student debt which is a more obvious patronage play for Democrats- college grads vote Dem and people with student debt skew younger (more Dems). Debt as a general category is too diffuse. To be clear I’m not opposed but there’s not gonna be a political will to make it happen.
- freddealmeida 5y agoThere is a possible structure that could work. But it would not be a simple add-on. It would require a restructuring. No loans. Medical should be profit free but with investment, and justice, well that needs a complete rethink doesn't it.
- theandrewbailey 5y agoCancelling student debt won't solve the student debt problem, unless we stop giving out student loans.
- newaccount2021 5y agoIts worse than that, its a lottery. Those graduates who have already paid off their debt, lose. Those soon-to-be students who have to pay high tuition, also lose. Indeed, since colleges will see loan forgiveness as an option, tuitions will rise.
- viraptor 5y ago> Those soon-to-be students who have to pay high tuition, also lose. There's a significant number who would not afford tuition and not apply. Universities would lose a lot students unless they changed fees significantly. If it's a proper reset on the debts, we can't expect everything to continue working as before.
- rhino369 5y agoRight, I paid off a balance of 260k dollars in student loans. Former classmates, who make exactly the same amount of money, who instead used their salaries to buy a house get a windfall? How is that good policy? Our current system already allows for cancellation for low income individuals. This is subsidy for the upper half of the middle class.
- D13Fd 5y agoI couldn't agree more. I'm in the same bucket. My wife and I worked hard, scrimped and saved, lived way below our means, and paid off our student debt ~15 years early. But now people want us to have to pay everyone else's debt too, through our taxes? The only way this could possibly be fair is if they offer some kind of credit for loans already paid.
- AnimalMuppet 5y ago
- legitster 5y ago> Historians sometimes refer to it as “jubilee,” a term used for household debt forgiveness decrees in ancient Israel that were similar to debt forgiveness in ancient Egypt, Babylon, and elsewhere. The widespread existence of this type of debt forgiveness in antiquity profoundly attests to the universality and persistence of this debt accumulation issue. It's important to note that Jubilee was not at all the same as "debt forgiveness" or "restructuring". It came in regular intervals and people knew when the next Jubilee was going to be when they entered the loan. This significantly changes the types of loans even offered.
- bluGill 5y agoAt least in the Jewish version the law also said you can't take into account the nearness of the the jubilee to not make a loan. I'm not sure if/how much that was respected though.
- gruez 5y ago>you can't take into account the nearness of the the jubilee to not make a loan What's preventing you from getting a huge loan 1 day before the jubilee?
- legitster 5y agoRealistically you wouldn't.
- bluGill 5y agoI read my bible as a Christian, so I know what it says. However I'm not immersed in the culture as it actually played out in practice. From a reading of the law there seems to be nothing, but I suspect there is something I'm missing. I'm not sure if there is something about who/how you can ask for a loan (thus meaning such a loan couldn't be requested just anytime), or if the culture allowed you to refuse to make big loans then even though the law said you couldn't.
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- _fat_santa 5y agoRight now we have around 1.5T in outstanding student debt. If all of this debt were to be cancelled, who would be left holding the bag? What would that do to the economy? IMO if we cancel all student debt, this would seriously rock our economy because we suddenly decided to take 1.5T in debt assets out of the economy.
- keanebean86 5y agoWould it though? The government paid for my college then wrote down I own them. They want me to give them that money back eventually. Are they using my promise to borrow money somewhere else? Or is it just an expense for a budget year that gets added as income years later? Also how much interest have we paid collectively on that 1.5 trillion? If we've paid that much already then what? Can't we just consider it an investment with a negative adjusted return and move on? In other words macroeconomics doesn't make sense to me in a lot of ways.
- hpoe 5y agoWell it would result in deflation because $1,500,000,000 disappears from the economy overnight. This means that the money supply shrinks and that kicks of a deflationary cycle.
- thatfrenchguy 5y agoI would argue this would actually cause inflation: all of those folks who have to pay for those student loans will start buying more goods, houses and services, increasing demand, which could increase prices in turn.
- hpoe 5y agoWell you would be wrong. Inflation doesn't just happen because people are buying more things. Inflation occurs when more money is brought into the system but the amount of goods remains constant.
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- floor2 5y agoThe terminology of "cancelling" the debt is the most dishonest, twisted abuse of the English language. There is no "cancelling" debt. There's only forcing other people to pay. The incentives here are entirely backwards. All the people who made good decisions around cost-benefit of their education, all the people who made frugal choices, all the people who worked hard for the delayed gratification of their long-term planning get penalized and have to pick up the tab for the people who spent 4 years partying without any concern about cost of their education or lifestyle. This is just so evil, it's insane that people have been tricked by the terminology making it sound it's a morally good choice. Imagine if we instead cancelled car loans or mortgages- everybody who's driving a honda or renting an apartment now (through taxes) shares the burden of paying off the Ferrarri's and mansions, but they're still driving their junker while the people who had chosen to load themselves with debt get to enjoy their sports cars and houses.
- JoeAltmaier 5y agoThat's a lot of supposition. Who has to pick up the tab? Unless you're a large loan conglomerate, I'm not sure you're picking up any tab. In a rational economic system those arguments should hold water. We have nothing like that now. Paying attention to the last 20 years of egregious hoarding of wealth should make that clear. Ignoring the strawmen, the systems at issue (school debt, medical debt and government debt) are nothing like a free market. They are so highly regulated, the abuses so entrenched, its reasonable to consider changing them.
- bluGill 5y agoMy retirement is invested into a large collection of companies, some of which own these loans. I fully expect that this will cost me. If I had instead not invested for my future and just partied hard I'd be better off.
- xienze 5y agoYep, your 401k will be indirectly affected by this. The real fun starts 20-ish years down the line when our elected officials decide to directly seize 401k assets in the name of "equity."
- hedberg10 5y agoOkay, NYT, you start. Make your work free. (It's an NYT opinion piece, so straight into the garbage it goes, but it's written by Astra Taylor, who I value for her contributions to unschooling way back when, but since it's not free, I can't be bothered)
- harimau777 5y agoThe argument is generally not that people should not be paid. Instead the argument is that the terms of the debt are not just or that people did not enter into the debt fully voluntarily (e.g. medical debt isn't much of a choice when the alternative is death/disability, student loan debt isn't much of a choice when low skilled positions don't pay a living wage). The proposed solution generally takes the form of canceling existing debt, reforming future debt, and reforming society so that the debt is less necessary.
- AnimalMuppet 5y agoAnd if we genuinely do the third step, so that we don't repeatedly wind up back in the same place, then we have something to talk about. Without the third step, it's going to work as an invitation to people to get into debt and expect to be bailed out. (You can say that people shouldn't take it that way, but you know that at least some will.) The problem is, while Astra Taylor may get that, I'm not sure that Biden does. I haven't noticed the "reforming society" part in the debt forgiveness proposals that have been floated.
- bassman9000 5y agodebt fully voluntarily If you can vote, you can read contracts. IMHO, we should raise voting age, precisely because of things like this. And because many entering these agreements today would be considered underage, more scrutiny would be expected. But, until then, voting is a golden standard.
- rejectedandsad 5y agoUnlike the rest student loans are taken out by choice (you can’t accidentally be hit by a university or be mistakenly accepted to an expensive school). I don’t see why people that made bad choices should be bailed out while I made better choices yet continue to suffer.
- HarryHirsch 5y agoYou know, there's the local state college here that for all practical purposes has open admission. You can see the advertising up and down the highway. The local kids (black and white, but mostly black) try to get a nursing degree but 70 % fail out. There's verious reasons, crap highschool, need to work to support themselves, also stupidity. They could have failed out cheaper at their community college. What I'm saying is, it's more complex than "choices".
- D13Fd 5y agoI don't see how that is anything but a choice.
- HarryHirsch 5y agoIt's a choice but not a well-informed choice. The fact that too many students have to support themselves while at college isn't even a choice.
- faitswulff 5y agoStudent debt is the epitome of rent-seeking. You can't even discharge it with bankruptcy. Cancel it.
- EvanAnderson 5y agoThe terms and conditions of the debt obligation are known up-front. If the terms of the loan were onerous the borrowers shouldn't have accepted them and declined the loan. Why is poor financial literacy and wishful thinking about future job prospects on borrowers' parts my problem to be left holding the bag for?
- deregulateMed 5y agoI remember being 18 and being the 1 kid in class saying 'Going away to college and spending 30k/yr on a music degree is a bad idea' I was right. They didn't listen. I'm bailing them out today.
- jvanderbot 5y agoPerhaps. The meager amount they are currently paying on loans (if any, given deferrment options) is much offset by public and tax subsidies for low earners. OTOH, I agree. If they are earning income and repaying, then I don't see a reason to nullify any loans of theirs. ( or mine )
- hu3 5y agoAs if students have a choice. Don't like the terms? Sorry, no education for you.
- EvanAnderson 5y agoI'm leaning more towards: "Sorry, no private out-of-state liberal arts college for you..." than "Sorry, no education for you." The free-flowing student loan money has created the same kind of bubble that "stated income" and "0% down" loans created in housing in 2008.
- rjbwork 5y agoGreat let's do it. And of course, my parents, who paid tens of thousands of dollars for my tuition, and I, who have paid off tens of thousands of dollars of student loan debt will be reimbursed for our absolute stupidity in being financially responsible, right?
- jvanderbot 5y agoProponents might say that its not about helping those who have helped themselves, but about helping those who still need help. If you could manage without loans, you aren't in a situation where gov intervention is required. I'm not of that mindset. I'm content with my loans.
- gruez 5y ago>If you could manage without loans, you aren't in a situation where gov intervention is required. This assumes everyone is equally prudent, but I doubt this is the case. For instance, suppose I was frugal, eating only rice and beans so I could pay off my student loans ASAP, while my friend got takeout multiple times a week. In this case, does my friend deserve more intervention than me? If my acts of frugality and sacrifice leads me to not get intervention, what message does that send to society?
- jvanderbot 5y agoThe course to the problem can't be fixed, but the problem might be able to be fixed. You can scold a smoker as much as you want, but we all still pay for their chemo in the forms of health insurance premiums.
- EvanAnderson 5y agoI wouldn't expect a refund for paying off my wife's student loans, or my own medical debt. That seems unfair. I'd expect a refund and interest commensurate with the earnings I lost being unable to invest that money. Were I an amoral freeloader that's certainly what I would have done, rather than living up to my debt obligations.
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- zanethomas 5y agoWhat about those of us who worked our way through school? Can we get a refund?
- tsjq 5y agoyou'd get a bigger tax bill.
- jvanderbot 5y agoNot necessarily. I don't think USA has to cut a check to cancel these, I think they just have to stop asking for repayment.
- diab0lic 5y agoI think you’re right that they just have to stop asking for payment but I assume those payments were included in the budget. The shortfall will need to be made up somewhere. Either higher taxes or fewer services.
- D13Fd 5y agoThere is no difference in practice. Government spending is not going to change, but the amount coming in will decrease. That means either increased taxes or increased government debt.
- gruez 5y agoMaybe the government should do this all the time. Housing crisis? Medical bill crisis? No problem, just have the federal government "loan" them money, then don't ask for repayment!
- rayiner 5y ago“A writer, filmmaker, and activist.” Uh huh.
- deregulateMed 5y agoAnyone else think poorly of HN readers when they see bad articles on the front page. I can't downvote because I use new accounts for privacy reasons.
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- fouric 5y agoI can't read the article (because NYT paywall), but isn't there a second-order effect from cancelling student loans & medical debt, in that loan interest rates will suddenly jump because there's no guarantee the same won't happen again in the future?
- SpicyLemonZest 5y agoIt’s just wild to me seeing how cancelling student debt, a proposal which is effectively targeted towards the middle class and helps the poorest Americans who don’t go to college not an inch, has become seen as a key social justice issue in the same vein as medical debt or criminal justice reform. I understand the incentives, but come on, you’d expect a bit more self awareness.
- faitswulff 5y agoThe kind of moralizing about making the right decisions stigmatizes people who couldn't make it through college for financial reasons and weren't able to find a job afterward and pay off their debt. It stigmatizes grad students who started off with good intentions but couldn't make it through the meat grinder. It stigmatizes first generation college students who had to return home after a year or two. All of these people now face student debts that can't be discharged by bankruptcy. If we agree as a society to invest in war, but we can't invest in our people, then we will reap what we sow.
- rjbwork 5y agoIt also penalizes people who lived extremely frugally after college in order to pay off their debts and delayed starting many aspects of life. I rented tiny rooms and cooked for myself and drove an old used car and skimped and saved on a LOT of things to be able to pay off my student loans quickly. In such a case I would be penalized for being responsible. Reimburse all student loan and tuition payers if you're going to pay off existing debt. Your sentiment simply does not account for individual variation in frugality and responsibility. We do not want to incentivize irresponsible behavior any more than we already do.
- rektide 5y agoI re-watched Adam Curtis's All Watched Over By Machines of Loving Grace documentary again recently. It was a strong reminder that the global financier class has never, ever, ever allowed their investments to fail. The IMF or others have stepped in country after country, time after time, the whole world monetary order has been about putting countries deeply into debt to bail out very large investors when their investments when things start to go wrong. Financial stability has always meant saddling the people of a nation with the responsibility to keep the very wealthy in good positions. The first example is of the Asian Financial Crisis, and the documentary goes on to show how the 2007 US Financial Crisis showed the same playbook in action, of incredibly poorly planned monetary investments going awry & all effort being given to shield the financiers who made these bad decisions from harm. So, like... yeah. We have made investing in markets have no penalty, for some. Deciding to invest in the welfare & improvement of our nation seems only logical, like only a modicum of parity, given the radical ways the world has continued to spend money to protect the vast fortunes of the giant investor class.
- satellite2 5y agoWhile I can appreciate where this is coming from, I can only help but thinking that this is a very poor short term solution. By debt cancelling I expect he means the government / the central bank will pay the lenders. (If not then we will have a massive homeless retirees problem as they are generally the lenders). As an economist, the issue with that is that it will continue incentivize the function of the underlying economic system and the problem will re-appear even faster. In the economic area mentioned by the author, housing, eduction, utilities, justice, it seems clear that if people need to get over-indebted to get basic services, there is a pricing issue. The problem come mostly because usual market arbitration forces are not applying in those areas because of asymetric needs of buyers and sellers. The average renter generally cannot avoid paying or use a subtitute and is generally forced to bear a price augmentation. If the government simply pays the sellers of those services, they have no incentive to provide them at a lower cost. So I believe it's really a pricing issue and only its resolution will allow to resolve the symptoms, debt and poverty, that it creates.
- petermcneeley 5y agoWhile open to interpretation I think some of the famous lines in "The Matrix" are actually about debt. - On modern debt servitude and having debt at the start of adult life "That you are a slave, Neo. Like everyone else you were born into bondage. Into a prison that you cannot taste or see or touch. A prison for your mind." - On Usury and high interest credit. "What is the matrix? Control... To turn the human body into this" * holds up a battery
- willyg123 5y agoThe next time I make the case for accounting to be a required course in high school I'm going to reference to this thread as Exhibit A: Assets & Liabilities Illiteracy.
- skizm 5y agoJust let student loans go into bankruptcy. Most of the problems would be solved. Banks would be forced to actually evaluate someone's ability to pay back the loan after school, they'd give out smaller loans to lower their risk, schools would be forced to charge less due to less people being able to "pay" (people already can't pay without these insane loan amounts). Worse case for students who can't repay undergrad loans is that they're early 30s and starting over with no debt.
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- hackeraccount 5y agoHow would this affect future debt? I would expect it's just raising the risk of default and as a consequence the interest that lenders ask. TANSTAAFL maybe, but more likely the lunch is going to get paid by the future... which is kind of like a loan that no one out there can cancel.
- tptacek 5y agoJust a random note that Astra Taylor's husband is Jeff Mangum, from NMH. He paid her student debt off. There was a recent NYT Argument podcast with her making this case (I don't find it persuasive).
- RickJWagner 5y agoWhy even bother with money? Just let everybody take whatever they want, wherever they can get it. So says the NYT. From behind a pay wall.