they made stupid choices but at the end of the day you need the economy to run. Trickle up economy cant work if nobody can spend any money.
Obama to forgive the student debt of permanently disabled people
- Thread starter RockX
- Start date
they made stupid choices but at the end of the day you need the economy to run. Trickle up economy cant work if nobody can spend any money.
cawacko
Well-known member
It's a stupid decision taking out loans for college?
cawacko
Well-known member
From the folks at Freakonomics for why forgiving all student loan debt is not a good idea.
Forgive Student Loans? Worst Idea Ever.
There’s an argument going around right now that forgiving the country’s student loan debt would have a stimulative effect on the economy. This online petition by Signon.org, an offshoot of Moveon.org, has nearly 300,000 signatures. Its basic argument is this:
Forgiving the student loan debt of all Americans will have an immediate stimulative effect on our economy. With the stroke of the President’s pen, millions of Americans would suddenly have hundreds, or in some cases, thousands of extra dollars in their pockets each and every month with which to spend on ailing sectors of the economy. As consumer spending increases, businesses will begin to hire, jobs will be created and a new era of innovation, entrepreneurship and prosperity will be ushered in for all.
The idea is also being touted by Michigan Democratic Congressman, Rep. Hansen Clarke:
So we asked Freakonomics contributor Justin Wolfers what he thought of the idea. His response is as follows:
Let’s look at this through five separate lenses:
1. Distribution: If we are going to give money away, why on earth would we give it to college grads? This is the one group who we know typically have high incomes, and who have enjoyed income growth over the past four decades. The group who has been hurt over the past few decades is high school dropouts.
2.Macroeconomics: This is the worst macro policy I’ve ever heard of. If you want stimulus, you get more bang-for-your-buck if you give extra dollars to folks who are most likely to spend each dollar. Imagine what would happen if you forgave $50,000 in debt. How much of that would get spent in the next month or year? Probably just a couple of grand (if that). Much of it would go into the bank. But give $1,000 to each of 50 poor people, and nearly all of it will get spent, yielding a larger stimulus. Moreover, it’s not likely that college grads are the ones who are liquidity-constrained. Most of ‘em could spend more if they wanted to; after all, they are the folks who could get a credit card or a car loan fairly easily. It’s the hand-to-mouth consumers—those who can’t get easy access to credit—who are most likely to raise their spending if they get the extra dollars.
3.Education Policy: Perhaps folks think that forgiving educational loans will lead more people to get an education. No, it won’t. This is a proposal to forgive the debt of folks who already have an education. Want to increase access to education? Make loans more widely available, or subsidize those who are yet to choose whether to go to school. But this proposal is just a lump-sum transfer that won’t increase education attainment. So why transfer to these folks?
4.Political Economy: This is a bunch of kids who don’t want to pay their loans back. And worse: Do this once, and what will happen in the next recession? More lobbying for free money, rather than doing something socially constructive. Moreover, if these guys succeed, others will try, too. And we’ll just get more spending in the least socially productive part of our economy—the lobbying industry.
5.Politics: Notice the political rhetoric? Give free money to us, rather than “corporations, millionaires and billionaires.” Opportunity cost is one of the key principles of economics. And that principle says to compare your choice with the next best alternative. Instead, they’re comparing it with the worst alternative. So my question for the proponents: Why give money to college grads rather than the 15% of the population in poverty?
Conclusion: Worst. Idea. Ever.
And I bet that the proponents can’t find a single economist to support this idiotic idea.
http://freakonomics.com/2011/09/19/forgive-student-loans-worst-idea-ever/
Forgive Student Loans? Worst Idea Ever.
There’s an argument going around right now that forgiving the country’s student loan debt would have a stimulative effect on the economy. This online petition by Signon.org, an offshoot of Moveon.org, has nearly 300,000 signatures. Its basic argument is this:
Forgiving the student loan debt of all Americans will have an immediate stimulative effect on our economy. With the stroke of the President’s pen, millions of Americans would suddenly have hundreds, or in some cases, thousands of extra dollars in their pockets each and every month with which to spend on ailing sectors of the economy. As consumer spending increases, businesses will begin to hire, jobs will be created and a new era of innovation, entrepreneurship and prosperity will be ushered in for all.
The idea is also being touted by Michigan Democratic Congressman, Rep. Hansen Clarke:
So we asked Freakonomics contributor Justin Wolfers what he thought of the idea. His response is as follows:
Let’s look at this through five separate lenses:
1. Distribution: If we are going to give money away, why on earth would we give it to college grads? This is the one group who we know typically have high incomes, and who have enjoyed income growth over the past four decades. The group who has been hurt over the past few decades is high school dropouts.
2.Macroeconomics: This is the worst macro policy I’ve ever heard of. If you want stimulus, you get more bang-for-your-buck if you give extra dollars to folks who are most likely to spend each dollar. Imagine what would happen if you forgave $50,000 in debt. How much of that would get spent in the next month or year? Probably just a couple of grand (if that). Much of it would go into the bank. But give $1,000 to each of 50 poor people, and nearly all of it will get spent, yielding a larger stimulus. Moreover, it’s not likely that college grads are the ones who are liquidity-constrained. Most of ‘em could spend more if they wanted to; after all, they are the folks who could get a credit card or a car loan fairly easily. It’s the hand-to-mouth consumers—those who can’t get easy access to credit—who are most likely to raise their spending if they get the extra dollars.
3.Education Policy: Perhaps folks think that forgiving educational loans will lead more people to get an education. No, it won’t. This is a proposal to forgive the debt of folks who already have an education. Want to increase access to education? Make loans more widely available, or subsidize those who are yet to choose whether to go to school. But this proposal is just a lump-sum transfer that won’t increase education attainment. So why transfer to these folks?
4.Political Economy: This is a bunch of kids who don’t want to pay their loans back. And worse: Do this once, and what will happen in the next recession? More lobbying for free money, rather than doing something socially constructive. Moreover, if these guys succeed, others will try, too. And we’ll just get more spending in the least socially productive part of our economy—the lobbying industry.
5.Politics: Notice the political rhetoric? Give free money to us, rather than “corporations, millionaires and billionaires.” Opportunity cost is one of the key principles of economics. And that principle says to compare your choice with the next best alternative. Instead, they’re comparing it with the worst alternative. So my question for the proponents: Why give money to college grads rather than the 15% of the population in poverty?
Conclusion: Worst. Idea. Ever.
And I bet that the proponents can’t find a single economist to support this idiotic idea.
http://freakonomics.com/2011/09/19/forgive-student-loans-worst-idea-ever/
The total of the US National Debt is $18,152,809,942,589.00. That's something a bit different from student loan debt, which is what we're talking about.
According to the Federal Reserve, the outstanding student debt in the US as of March, 2015 was between $1.19 trillion and $1.27 trillion.
Companies holding funds in offshore accounts for the purpose of avoiding taxes figured at $2.1 trillion as of the end of 2014.
cawacko
Well-known member
Ah yes, my bad.
Text Drivers are Killers
Joe Biden - "Time to put Trump in the bullseye."
It all depends. If your major is liberal arts and humanities crap, then yes it's stupid. If your major is STEM, then it makes sense and maybe the kids who got a STEM degree do deserve a break.
Text Drivers are Killers
Joe Biden - "Time to put Trump in the bullseye."
Govt guaranteed student loans are just another example of how govt can't do anything right. It just encouraged colleges to greatly increase tuition and now we have all these kids in debt. When will the public learn - everything is a scam.
Wow you like yelling how dumb you are
ChoppedLiver
New member
That's a lie, you stupid cock sucker.
The fraud issue has already been addressed with substantial facts...
this is true government student loans keeps college prices high because the deman is there. If demand were to drop then colleges would have to price accordingly.
its why we must support scholarships like the Privilege Grant
https://privilegegrant.com/
donate and help poor people attend college without crushing student debt
what happens if no one can afford it?
yes there should be a scholarship for hot girls too.
Stupid question
But they chose to take on the student debt they have. Does being disabled mean they no longer have to be responsible for their choices?
Callinectes
Proud MAGA Semi-Facist
You think CREDIT CARD debt should be forgiven?