With today's announcement cancelling up to $20,000 of student loan debt for couples making less than $250,000 ($125,000 for individuals), President Joe Biden gives lie to his stated concern about the Federal deficit. The ceiling is roughly four times the median houshold income in the United States. This program is likely to cost about $500 billion, well above the recently enacted $300 billion tax increase on corporations. Somehow in the eyes of the Biden Adminstration student loan debt is more sacrosanct than other debts contracted by middle-class Americans.Put simply, Biden's actions is a payoff to a noisy Left who doesn't care about the uncredentialed workers who do the day-to-day work of keeping our country running.
As a result the extinguisment of student debt, will likely let loose a torrent of spending just at the very time the Fed is trying to dampen demand to fight the inflation cycle we are now in. Chair Powell's job has been made more difficult.
What is worse is that this is yet another sop to the higher education racket's privileged faculties and its ever growing beauracracy. The reason why student debt is so high, are the rents extracted by those elite groups. By foregiving student loans there is a wink and a nod to incoming students saying don't sweat borrowing the money; it will be forgiven down the line. The solution to the student debt problem is not debt extinguishment, but rather a fundamental reform of higher education.
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