Monday, July 3, 2023

There's no such thing as debt "forgiveness", existentially, and why do we never discuss the morality of economics?

I'm continually amazed by how liberal economists actually don't understand economics at all.  It's bizarre. 

Consider this, brought about by the Supreme Court's determination that the President cannot forgive student loans by executive fiat (which is actually what it decided):

Total student loan debt that would have been erased for millions of Americans: $400 billion Total cost of the Trump tax cuts that largely benefited the wealthy and corporations: $1.9 trillion This is what I mean when I say the system is rigged.

Debt isn't really "erased".  It's transferred.  Debt that is forgiven is transferred to whomever extended the credit.

In this case, the student debt would have been passed on to the public, which already is heavily in debt with; 1) personal debt and 2) the debt the government has already imposed upon it.

Which raises this question. Would transfer of this debt have been moral?  

This hardly ever comes up in the context of this sort of discussion, but would it have been?  The general population of the United States would have acquired the personal debt of students, largely unknown to them, for what reason?

Well, the reason is that most student loans are bad investments, not yielding a sufficient return to pay for themselves.  That can indeed be a personal tragedy.  It is one that is encouraged by the student loan system, which no longer makes any sense.  Loans should be subject to more criteria than simply somebody wants one, but that is about it.

The Government indeed has some culpability in this, and perhaps that provides a basis for "forgiveness", but only if the Government seeks to address the underlying problem, for which there is no evidence.

At any rate, all the Court said is that Congress has to do this.  Part of the Court's ongoing reminder to Congress that it has a job to do, and to the general public that it's up to it to elect people.  Liberals hate that as, by and large, the public isn't too keen on stuff like this, and they know that.

As for tax cuts, I agree with Mr. Reich that taxes should be raised, but the President can't do that by fiat either.  Hence, why these two items cannot be compared, and the "rigged" accusation here is subject to a logic failure.

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