This move would punish workers

By DOUG BANDOW
Posted 5/10/22

By any normal standard Uncle Sam should declare bankruptcy. Publicly held federal debt is more than 100 percent of GDP.

Yet proposals for more spending continue to emerge. Activists are pushing …

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This move would punish workers

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By any normal standard Uncle Sam should declare bankruptcy. Publicly held federal debt is more than 100 percent of GDP.

Yet proposals for more spending continue to emerge. Activists are pushing the Biden administration to wipe away up to $1.6 trillion in federal student loans.

The president says he is seriously considering the idea.

A complete debt erasure would cost $1.6 trillion. A $10,000-per-borrower giveaway would cost $245 billion.

The last hope might be the courts. The Trump administration concluded that the president had no executive authority to write off student debt. Amazingly, so has House Speaker Nancy Pelosi. Last year she said simply: “The president can’t do it — so that’s not even a discussion.”

The argument for state‐subsidized primary and secondary education is that it provides substantial social benefits by preparing people for the essentials of life, and participation in community with others.

But most young people are not college students. Only about one‐third go to university. And that’s probably too many. The economy depends upon ample people trained in practice rather than theory; such jobs provide fulfillment and deserve respect.

However, the pressure to attend university is strong. Some kids go because they believe they are supposed to, their parents want them to, or their friends expect them to, not because the resulting degree offers much value.

Indeed, credentialing inflation has made a university degree a needless requirement for many jobs that mostly depend upon skills which can be taught, and character which cannot. And as more people get baccalaureate degrees, pressure grows to attend graduate school. (The latter now accounts for an astounding 40 percent of educational debt.)

Of those who pursue higher education, many attend community colleges or state schools to hold down costs. Some take their financial responsibilities seriously, living frugally and paying down their loan balance. Doing otherwise and loading up with debts is an individual choice. The alternatives might not be easy, pleasant, or welcome. However, it is not the taxpayers’ job to make them so.

When running for office Pete Buttigieg, now Transportation Secretary, observed: “Americans who have a college degree earn more than Americans who don’t. As a progressive, I have a hard time getting my head around the idea of a majority who earn less because they didn’t go to college subsidizing a minority who earn more because they do.”

Overall, only 22 percent of families have student loan debt. Why should everyone else have to pay their way? Even more unfair is forcing those who sacrificed to pay off their loans to fund a write‐off for recent graduates. Nancy Pelosi grasped this simple concept. You might not be happy if “your child just decided they, at this time, [do] not want to go to college, but you’re paying taxes to forgive somebody else’s obligations.”

And what about today’s students? Why should they pay their debts if those who graduated only a few years before them get a free ride?

Such a step would brand “Blue Collar Joe” as just another prosperous progressive elitist looking after his own.

 

Doug Bandow is a scholar at the Cato Institute (cato.org) in Washington. A longer version of this article appeared in American Spectator (Online).

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