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I'm sure my wording could have been better, but the thought that student debt is large enough to have material effects on inflation for an economy the size of t

I'm sure my wording could have been better, but the thought that student debt is large enough to have material effects on inflation for an economy the size of the US was a bit of a revelation to me.

s1artibartfast 4y ago
The federal student loan portfolio currently totals more than $1.6 trillion. The federal government receives about $70.3 billion in payments for student debt per year[1]. In relation to the 4.4 Trillion in revenue that is about 1.5% of revenue. What is more meaningful is the total amount forgiven, which is around 300 billion of debt of the students balance sheets, essentially immediately [2] That is about 7% of the entire federal revenue. Essentially folks have 70 billion more to spend this year, and also don't need to worry about payments on 300 billion in coming years. The numbers being thrown around during the pandemic are truly staggering and people don't have the context to judge their size in relation to federal revenue. For example, the US spent about $11 Trillion on pandemic relief. That was more than 3 times federal revenue in 2020, which was already a trillion dollars over budget. https://slate.com/business/2021/03/student-loan-total-annual-government-payments.html https://slate.com/business/2021/03/student-loan-total-annual... https://budgetmodel.wharton.upenn.edu/issues/2022/8/23/forgiving-student-loans https://budgetmodel.wharton.upenn.edu/issues/2022/8/23/forgi... https://www.covidmoneytracker.org/ https://www.covidmoneytracker.org/
- hotpotamus 4y ago
  Yep, on those scales it doesn't seem like much of an issue, does it? Also, essentially immediately seems to be doing some work there - didn't Biden already cancel part of it that was challenged in court? And I assume other parts will face court challenges?
  - s1artibartfast 4y ago
    I haven't followed the the challenges, but I think the sentiment is that it just throwing gas on an existing fire and digging the hole incrementally deeper.

I'm sure my wording could have been better, but the thought that student debt is large enough to have material effects on inflation for an economy the size of the US was a bit of a revelation to me.

s1artibartfast 4y ago

The federal student loan portfolio currently totals more than $1.6 trillion. The federal government receives about $70.3 billion in payments for student debt per year[1]. In relation to the 4.4 Trillion in revenue that is about 1.5% of revenue. What is more meaningful is the total amount forgiven, which is around 300 billion of debt of the students balance sheets, essentially immediately [2] That is about 7% of the entire federal revenue. Essentially folks have 70 billion more to spend this year, and also don't need to worry about payments on 300 billion in coming years. The numbers being thrown around during the pandemic are truly staggering and people don't have the context to judge their size in relation to federal revenue. For example, the US spent about $11 Trillion on pandemic relief. That was more than 3 times federal revenue in 2020, which was already a trillion dollars over budget. https://slate.com/business/2021/03/student-loan-total-annual-government-payments.html https://slate.com/business/2021/03/student-loan-total-annual... https://budgetmodel.wharton.upenn.edu/issues/2022/8/23/forgiving-student-loans https://budgetmodel.wharton.upenn.edu/issues/2022/8/23/forgi... https://www.covidmoneytracker.org/ https://www.covidmoneytracker.org/

hotpotamus 4y ago
Yep, on those scales it doesn't seem like much of an issue, does it? Also, essentially immediately seems to be doing some work there - didn't Biden already cancel part of it that was challenged in court? And I assume other parts will face court challenges?
- s1artibartfast 4y ago
  I haven't followed the the challenges, but I think the sentiment is that it just throwing gas on an existing fire and digging the hole incrementally deeper.