President Biden and his spokesfolks have done their best to blame our runaway inflation on factors outside their aegis such as the pandemic, Putin’s War and the supply chain snafu. And, to a point, they are correct that those events are at least partly to blame in sparking the onset of the problem. What they fail to admit is that their relentless advocacy of high-priced, often misdirected “relief” programs in the midst of the worst inflation in forty years has seriously exacerbated an already deteriorating situation.
Most puzzling of these programs is his executive order mandating student debt relief; one man, our President, has decided to throw several billion dollars at mostly young, mostly self-sufficient former student borrowers. Does he actually have the authority to authorize this level of spending? Shouldn’t Congress weigh in? Can this President, elected by just a little more than half of his constituency and whose performance is approved by less than half of them behave as though he has carte blanche…..Apparently. But his action in this matter is so wrong in so many ways.
First, it suggests to young, often first-time borrowers, that loan contracts are meaningless and that debt is not an obligation to be taken seriously. How many of these people will eventually have to learn the hard way that in the real world of car loans, credit cards and mortgages that there is no amnesty and that credit scores matter.
Second, it violates a moral precept and sets a terrible precedent by painting those borrowers who have diligently paid off their loans as “suckers”. And it encourages future student borrowers to game the system, expecting their debt to be eventually forgiven by presidential fiat or some other beneficent magic.
Third, most of the benefits will go to people of means who need no help making payments; 65% of student debt is owed by those earning more than the national average income; only 12% of the debt is owed by the lowest quartile of earners and, for those who struggle to make payments, there is already a program in place to relieve their obligations. It’s called the Income Driven Repayment Plan (IDR). There are more plan details than can be described here but, basically, it forgives all future interest if the borrower can’t keep up with scheduled payments so the balance never increases. Any remaining loan balance is completely forgiven after 20 years; 10 years if the balance is $12,000 or below. Of course, borrowers must apply for the benefit….how cruel! Does it seem reasonable that a family of two borrowers earning $250,000 annually should get this $20,000 taxpayer largesse; $40,000 if they were both on Pell grants? Whose crazy idea was that?
Fourth, and clearly the greatest threat to the US economy, is the inflationary impact of a sudden windfall in the pockets of borrower/consumers without a corresponding increase in the supply of stuff to buy. This, of course is the same fault found in all the President’s aggressive giveaway programs. His tone-deafness to the serious consequences of his inflationary actions suggests that he never understood Econ 101 or, more likely, that he is simply pandering to voters in advance of the mid-terms; everyone loves free stuff.
At the bottom of this issue is the steady, lethal rise in tuition and board faced by students at nearly every college and university in the country. That rise has propelled concern over student debt to the front of the line and no doubt instigated the president’s executive order. Perhaps Congress should consider a non-partisan examination of those secondary education institutions that receive taxpayer money in any form to understand the architecture that causes costs to rise so much more sharply than consumer prices. I’m not sure that a solution would arise from such a study but it would be useful to know where the pathogens are.
A single court has ruled against implementation of the President’s order; not very comforting. Electing a Republican House now will slow the liberal rush to enact even more poorly-conceived give-away legislation. But I’m deeply concerned that regardless of the outcome of November elections, we’re in for at two more years of economic chaos as this president continues to polish his “legacy” with even more clumsy executive actions.
Bill Barron
Worton
Gren Whitman says
All the conservative arguments against helping people out of debt are served up in this LTE!
No one should have to borrow money to go to college. In fact, it would be in the national interest to pay students’ tuition, room, and board.
The real threat to the economy is not helping young people pay their college costs but the greed of large corporations and the GOP kowtowing to the rich.
Give us a break, Count Barron of Worton, or rather, let’s give THEM a break, eh?
Deirdre LaMotte says
When your GOP stops giving the richest members of our society tax cuts that do nothing for
others, you may have an argument.
Until then, Biden is doing what any
leader not owned by corporations would do:
help those in need dealing with education dept not seen in any other developed nation. It is shameful.
Your argument is specious and neglects the reality of millions of hard working Americans.
Corinne Davis says
While I agree with comments made by Gren, I heartily agree with the assessment of the article’s author. I see this attitude in my own children. My oldest 2 paid their student loans. My younger 2, now in college with a 5-year split between the older 2 and younger 2, feel like their student debt will and should be forgiven and there is a major difference in their attitudes about productivity, spending, saving, and budgeting money.
No candidate or platform is going to resolve the issues. The sooner we stand together and turn our backs on the partisan politics, corrupt government, and election system that is designed to divide us, and we instead make politicians realize that we prefer to pay less in taxes and for their “social programs” that fill the pockets of their groupies (both sides), NEVER resolve the community issues, and instead we agree to be responsible humans in our actions for our families, property, communities and environment, then we will never find common ground. They win by keeping us divided and distracted looking “over here withh poilitics” while doing things behind our backs. Both sides are playing the same game and we are their pawns. Until we get a “NO CONFIDENCE” ballot option where we can show them how little we think of their ability by casting a vote of No Confidence for any of them, I won’t vote. Some would say I am irresponsible not to exercise my vote and impress upon me that I should select a candidate that I feel is the lesser of 2 evils. To those, I would say – I do not vote for evil and will not select any of them to “Lord over me and my family’s resources”. It is reminiscent of scripture when the Hebrews begged for a KING in 1Samuel 8: -you will get the “king” you ask for. When these politicians tell us their decision is “for the greater good” what you must realize is that they are not talking about the masses of citizens. They use doublespeak. They are “the greater”, we are the lesser. The spending programs are for their benefit and the harvest of resources, not for our benefit. Stop the spending programs. Like politics, the education system is largely broken, and throwing more tax dollars at it is not going to fix it and will not raise the next generation to be of the highest character and motivation to succeed and be contributing members of communities and the society at large. We need to stand by each other, not by the politicians.