Re: Bernie's plan to cancel student loan debt.

[Hassin Bin Sober]

Economies do not run your personal balance sheet.

Canceling $1.4 trillion in student debt could have major benefits for the economy

https://www.marketwatch.com/story/canceling-14-trillion-in-student-debt-could-have-major-benefits-for-the-economy-2018-02-07


It’s not uncommon to see student loan borrowers muse about what would happen if their student debt was suddenly wiped out. Whether it’s an unlikely pipe dream or due to legal issues with their college, it’s a life-changing fantasy.

Now, we have a sense of how widespread student debt cancellation would affect even those who don’t hold loans. And it appears, things might actually get better for all of us.

Wiping away the $1.4 trillion in outstanding loan debt for the 44 million Americans who carry it could boost GDP by between $86 billion and $108 billion per year, on average for the 10 years following the debt cancellation, according to a report published by the Levy Economics Institute of Bard College. Getting rid of the debt would also lower the average unemployment rate by 0.22 to 0.36 percentage points over 10 years and could add between 1.2 million and 1.5 million jobs per year, it found.

“That is a dollar for dollar bump up in their net worth,” said Stephanie Kelton, a professor of economics and public policy at Stony Brook University and one of the authors of the report. In addition to becoming wealthier, these borrowers would have more disposable income to spend on houses, cars, vacations and other goods, which could fuel job growth.

[NYC Democrat]

1. If it wasn't backed by a dumbass Financial Transaction Tax I might support it.

But as is, that tax won't raise near as much as claimed, and will affect people well beyond just the top earners. These things have been tried in other countries their just not good policy. There are so many better ways to fund a program like this.

[TexasTowelie]

3. I don't see how Bernie's plan would help me in any manner.

There will be winners and losers according to Bernie's plan. The winners will be those who have their student loan debt canceled. The losers will be those that don't carry student debt, are retired, or are old enough that they've been pushed out of the workforce and that are unlikely to obtain any additional training that would provide marketable skills.

There are plenty of college graduates that are working in jobs that do not require a college education. There are also plenty of college graduates that completed a bachelors degree who did not obtain an advanced degree who only qualify for entry-level occupations that may not provide a similar standard of living than what they previously received.

Is it really practical to expect someone in their mid-50s to return back to college to get a masters or Ph.D for 2-4 years (and probably longer) when they will be expected to retire in 10 years? The labor market will always prefer the younger candidate that is in better health, who can be trained to meet the company standards without carrying the baggage and mindset gained in earlier jobs, and who have greater flexibility and determination since they are at the beginning of their careers rather than at the twilight of their careers.

Rather than selecting winners and losers as Bernie's plan does, I would prefer to see UBI so that everyone gets a piece of the pie. I know too many people who worked 25-30 years and are over 50 years old that are getting laid off from their jobs that will either not find new jobs or will have to settle into occupations where the pay is cut 30%-50%. These are people who have been productive throughout their working careers and paid taxes to educate the next generation that are being tossed aside and told that they don't matter anymore; yet, they can still be productive employees and may actually make greater contributions than a recent college graduate because of their experience.

And yes, I was warned about the possibility that something like this could happen when I was in my early 30s and advised to further my education. While I continued to further my education taking additional computer classes and obtained the equivalent of another associate's degree through a professional certification program while I was working 50 hours a week, the possibility of receiving a post-graduate degree was nearly impossible because of the hours I was working and the availability of programs within 40 miles of my home.

Lowering the unemployment rate by one-quarter or one-third of a percentage point is not going to have an impact on those who can't find a job despite the fact that the unemployment rate is at the lowest rate in decades. We were exploited and disposed of like any other used commodity. How does Bernie's plan address those people in that situation?