4 ms·

I think the best context to this is this earlier discussion of similar analysis: https://www.currentaffairs.org/2019/06/is-student-debt-cancellation-regressive

• twoodfin 5y ago
  Two points on that discussion: - AFAICT, the argument that a massive loan forgiveness would not be regressive rests entirely on excluding from the analysis low-income members of the 25-40yo cohort with no student debt. Sure, that fraction may be smaller than in the past, but it’s hard to see how discounting a bunch of poor folks who would see $0 benefit from this expenditure is intellectually honest. - It’s amusing to see a left-wing analysis complain about policy benefits being described in absolute dollar amounts when it’s a doctor making $250k having $50k of his medical school loans forgiven. As I recall, every tax cut debate of the last 20 years has featured charts in absolute amounts showing the tens of thousands of dollars the average 1%’er would save, not the relatively small fraction of income that represented.
  • dv_dt 5y ago
    The situation is an entire generation of kids from one point forward were systematically misled about the sure thing security of the benefits of taking a student loan investment vehicle in order to secure their education. When the financial sector was misled about the same regarding "secure" mortgage backed securities in 2008 they were completely bailed out - despite being the sophisticated investors that should have known better. To allow the same for entire generations of students affects our society - causing declining birth rates, poorer health outcomes, poorer life quality. And why? To enforce fiscal discipline that we have not enforced even on sophisticated actors that systemically made a poor choice?
    • twoodfin 5y ago
      None of that speaks to whether the proposed $50k forgiveness is a regressive policy relative to other potential uses of several hundred billion dollars.
      • zarzavat 5y ago
        You can say that about anything. Fixing streets is regressive, it only benefits people with cars. Therefore we should not fix streets. It’s laughable to call student loan forgiveness “regressive”. The word “regressive” is supposed to be used for policies that benefit the wealthy people more than average people, not for policies that benefit average people more than low income people.
        • nate_meurer 5y ago
          You have inadvertently undermined your own argument using a perfect example. One of the most effective arguments in favor of gas taxes and road tolls is to mitigate the regressive nature of universal taxation for road building and maintenance. Because yes, "fixing the streets" is indeed a regressive tax burden for people who can't afford a car. > not for policies that benefit average people more than low income people. According to whom? And are you really satisfied to merely debate semantics?
          • zarzavat 5y ago
            I don’t accept that view of how taxation works. Taxes are levied to the extent that they are tolerated, and expenditure is made to the extent that it is demanded. Both are subject to independent political processes. Imagine for the sake of argument that there was a bumper year for vehicle / fuel tax and the tax generated multiplies more revenue than expected. Would the money be spent on diamond encrusted highways or would it instead be spent on other areas that are more in need? Cars are taxed because they can be.
        • salawat 5y ago
          What is the "average person" to a "low income person" if not, relatively speaking, wealthier? You really can't have that both ways. Unless your intent is to partition by +/- orders of magnitude of relative wealth. In that case, we're starting to get into equal protection under the law violation territory.
        • nickysielicki 5y ago
  • Tanjreeve 5y ago
    I think this is post hoc wrapping usury and massive information asymetry in 'some progressiver than thou' language. - if it's about taxing some qualitative value of education then it should be a graduate tax applied equally to everyone with tertiary education. I'd be curious how politicans would manage policies on education and taxes on this value when they are paying it too - if it's not about the qualitative value but about the income, then it should be an income tax. - if it can't be discharged through normal procedures of bankruptcy and terms are rewritten by politicians then it's not 'just a loan' either. In the absence of any of these then these are largely generation taxes in terms of how they fall.
    • twoodfin 5y ago
      It’s really difficult to consider federal student loans as “usurious”. The interest rate is fixed well below market rates for similar unsecured loans. There are numerous income-based repayment & forgiveness schemes that for many borrowers will represent a negative effective interest rate. And no one has had to make any payments on these loans at all for almost two years. It’s also not at all obvious to me how making such loans dischargeable in bankruptcy would actually help borrowers, other than creating a really nice dodge for recent graduates of Harvard Law.
      • Tanjreeve 5y ago
        That's not exactly a ringing endorsement of the system If it's relying on pandemic fiscal policy and/or patchworks of different schemes many operating on political whims to negate fundamental dysfunctional behaviour. The argument for bringing student loans back into line with normal debt is less to do with poverty and more to do with not creating a system that incentivises racking up the price as much as possible and letting debt (and bailouts) patch up the difference when it all falls apart and the product doesn't actually fulfill any of its sales pitch and the price goes up far beyond what any reasonable income expectations can sustain. If the system is fixed for graduates of Harvard law then I don't think that's skin off anyone elses teeth. Bankruptcy is not exactly an easy route into legal practice so I think you're being a bit fixated on a v small edge case.