Lessons of Biden’s Debt Jubilee

Joe Biden, reeling from consistently low poll numbers, has thrown a Hail Mary pass in the form of limited student loan relief. Like any form of debt forgiveness, it is going to have some unavoidable inequities, not least for those who never had or already paid off their student loans

The Education Bubble

• The entire student loan system is based on dubious assumptions
• More education is always better
• Easily available student loans have led to massive inflation in education far exceeding what we see in consumer inflation
• This inflation is driven by perverse incentives, not least that the universities bear almost no responsibility in cases of default

Bootstraps Conservatism

• Conservatives are generally the hardheaded sort who pride themselves on self-sufficiency. Paying back debts is part of this value system.
• Much of the hostility to student loan forgiveness is generational. The older Reagan Republican types are living in a different universe, one where you could still pay your way through college or make a good living with only a high school diploma (and sometimes not even that).

Public Policy and Public Choice

• In general, we should favor policies that relieve burdens to family formation from talented, high IQ, and productive people.
• The Biden Administration decision was not guided by public policy concerns. Instead, it undertook a cynical giveaway to a core Democratic constituency: young people.
• Biden's policy has a feature that will make it a political winner: student loan forgiveness concentrates benefits and disperses costs.

https://amgreatness.com/2022/08/29/lessons-of-bidens-debt-jubilee/