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Now that we have a new thread, in order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a complete and thorough read before posting! NOTE: When providing a source, please provide a very brief summary on what it's about and what purpose it adds to the discussion. The supporting statement should clearly explain why the subject is relevant and needs to be discussed. Please follow this rule especially for tweets.
Your supporting statement should always come BEFORE you provide the source.If you have any questions, comments, concern, or feedback regarding the USPMT, then please use this thread: http://www.teamliquid.net/forum/website-feedback/510156-us-politics-thread |
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Lots of people in the crypto circles are unironically talking about this as a 'good thing for civil liberty' and 'strides towards ditching fiat oppression and financial emancipation via bitcoin.' And I'm not talking about some hardcore libertarians or anything, it's not even the 'taxation is theft' nutters; it's people who are mostly sane otherwise that are somehow finding ways to spin this into a positive thing. Pretty depressing, actually.
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On January 15 2021 10:51 Zambrah wrote:Show nested quote +On January 15 2021 10:49 IyMoon wrote:On January 15 2021 10:48 Zambrah wrote:On January 15 2021 10:47 IyMoon wrote:On January 15 2021 10:45 micronesia wrote:On January 15 2021 10:34 Gahlo wrote:On January 15 2021 10:09 Sadist wrote:
From the beginning its been known that the $600 counted towards the $2000 so this should be known. Also Im not sure if everyone got their checks yet so if they havent they actually would get the $2000 at once.
I dont think this will hurt politically at all.
Yup. I think this is like people going after reactions to the Capitol Hill attack nitpicking about the difference between zip ties and zip cuffs. Yes, they're technically right, but they're being a dickwad and it's obvious. How many of these people do you think there are (regarding the $2,000, not the zip ties)? Even if you are technically right, if there are a lot of them, the event will hurt politically. Messaging is as much about preventing unreasonable criticism as it is being technically correct. As I explained before I haven't been following the issue closely from the beginning so I don't know how clear/obvious it was that the discussions about 2k checks were less the already-approved 600. Maybe we are all more tuned in than most because we post on this blog, but I thought it was pretty fucking obvious the 2k was the 600 + 1400 more. That is why dems pushed a clean bill to just add 1400 to the 600 already passed I have to ask, why was this obvious? I hadnt heard anything about this til I saw the irs website, and lots of people hadnt heard anything about this til Biden's plan was revealed today Because the dems talked about it all the time during the push for 2k? It was to raise the 600 dollars to 2k. Not give 2k on top of the 600. When did they talk about this? I legitimately havent heard anything about this from any Democrat til today. Show nested quote +On January 15 2021 10:50 Gahlo wrote:On January 15 2021 10:43 Zambrah wrote:On January 15 2021 10:34 Gahlo wrote:On January 15 2021 10:09 Sadist wrote:
From the beginning its been known that the $600 counted towards the $2000 so this should be known. Also Im not sure if everyone got their checks yet so if they havent they actually would get the $2000 at once.
I dont think this will hurt politically at all.
Yup. I think this is like people going after reactions to the Capitol Hill attack nitpicking about the difference between zip ties and zip cuffs. Yes, they're technically right, but they're being a dickwad and it's obvious. I don't think this math was known to the public, the number floated has been 2,000 dollars, so thats what people were expecting. This was definitely not something that was commonly understood by the public, the only way I think youd know is if you checked the irs.gov website, because I dont think Biden's full plan was unveiled before today, and hes on record before for 2,000 dollar checks. The number floated was $2000 was before the $600 checks were passed. It seemed pretty obvious to me that afterwards, if there was to be a "correction", it would be in the form of $1400 and not $2000. But why is that obvious, when you have a bunch of Democrats talking about 2,000 dollar checks why is it obvious to anyone that what they actually mean is the culmination of two checks from two bills will equal 2,000 dollars? Democrats are repeating calls for 2,000 dollar checks in the face of this reveal too, https://twitter.com/PramilaJayapal/status/1349845246029537282?s=20https://twitter.com/JStein_WaPo/status/1349864653380268032?s=20https://twitter.com/JamaalBowmanNY/status/1349893645009362947?s=20This doesnt even seem to have been something Democrats as a whole were even necessarily in on?
It's been 2000 in total since the start. The democrats who call for an extra 2000 are being dishonest.
Here's an AOC tweet in December:
https://twitter.com/AOC/status/1343370839673061377?s=20
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5days left for Trump to show his healthcare plan that is so much better than obamacare
Or is it still in 2 weeks ?
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On January 15 2021 22:21 RvB wrote:Show nested quote +On January 15 2021 10:51 Zambrah wrote:On January 15 2021 10:49 IyMoon wrote:On January 15 2021 10:48 Zambrah wrote:On January 15 2021 10:47 IyMoon wrote:On January 15 2021 10:45 micronesia wrote:On January 15 2021 10:34 Gahlo wrote:On January 15 2021 10:09 Sadist wrote:
From the beginning its been known that the $600 counted towards the $2000 so this should be known. Also Im not sure if everyone got their checks yet so if they havent they actually would get the $2000 at once.
I dont think this will hurt politically at all.
Yup. I think this is like people going after reactions to the Capitol Hill attack nitpicking about the difference between zip ties and zip cuffs. Yes, they're technically right, but they're being a dickwad and it's obvious. How many of these people do you think there are (regarding the $2,000, not the zip ties)? Even if you are technically right, if there are a lot of them, the event will hurt politically. Messaging is as much about preventing unreasonable criticism as it is being technically correct. As I explained before I haven't been following the issue closely from the beginning so I don't know how clear/obvious it was that the discussions about 2k checks were less the already-approved 600. Maybe we are all more tuned in than most because we post on this blog, but I thought it was pretty fucking obvious the 2k was the 600 + 1400 more. That is why dems pushed a clean bill to just add 1400 to the 600 already passed I have to ask, why was this obvious? I hadnt heard anything about this til I saw the irs website, and lots of people hadnt heard anything about this til Biden's plan was revealed today Because the dems talked about it all the time during the push for 2k? It was to raise the 600 dollars to 2k. Not give 2k on top of the 600. When did they talk about this? I legitimately havent heard anything about this from any Democrat til today. On January 15 2021 10:50 Gahlo wrote:On January 15 2021 10:43 Zambrah wrote:On January 15 2021 10:34 Gahlo wrote:On January 15 2021 10:09 Sadist wrote:
From the beginning its been known that the $600 counted towards the $2000 so this should be known. Also Im not sure if everyone got their checks yet so if they havent they actually would get the $2000 at once.
I dont think this will hurt politically at all.
Yup. I think this is like people going after reactions to the Capitol Hill attack nitpicking about the difference between zip ties and zip cuffs. Yes, they're technically right, but they're being a dickwad and it's obvious. I don't think this math was known to the public, the number floated has been 2,000 dollars, so thats what people were expecting. This was definitely not something that was commonly understood by the public, the only way I think youd know is if you checked the irs.gov website, because I dont think Biden's full plan was unveiled before today, and hes on record before for 2,000 dollar checks. The number floated was $2000 was before the $600 checks were passed. It seemed pretty obvious to me that afterwards, if there was to be a "correction", it would be in the form of $1400 and not $2000. But why is that obvious, when you have a bunch of Democrats talking about 2,000 dollar checks why is it obvious to anyone that what they actually mean is the culmination of two checks from two bills will equal 2,000 dollars? Democrats are repeating calls for 2,000 dollar checks in the face of this reveal too, https://twitter.com/PramilaJayapal/status/1349845246029537282?s=20https://twitter.com/JStein_WaPo/status/1349864653380268032?s=20https://twitter.com/JamaalBowmanNY/status/1349893645009362947?s=20This doesnt even seem to have been something Democrats as a whole were even necessarily in on? It's been 2000 in total since the start. The democrats who call for an extra 2000 are being dishonest. Here's an AOC tweet in December: https://twitter.com/AOC/status/1343370839673061377?s=20
I thought it was rather clear as well. more money is always better of course but sadly it's not the world we live in.
elaborating on this point, it's very much underreported and underappreciated how terrible the Trump admin was in terms of legacy to the US budget. no matter the admins in the future, cutting spending, tax hikes or both seem to be inevitable.
Trump will have the worst jobs record in modern U.S. history. It’s not just the pandemic.
The national debt has risen by almost $7.8 trillion during Trump’s time in office. via propublica/WaPo
everytime some R budget hawk creeps around the corner, and there will be many in the future to be sure, I would show them what "the greatest economy ever built in the history of the US" actually cost.
and the graphs are eye poppers to be sure.
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United Kingdom13775 Posts
On January 15 2021 20:59 farvacola wrote:
I don't have the numbers in front of me, but it's a mistake to assume student debt forgiveness only benefits young educated people. Many of those folks at the bottom of the ladder, the ones that work at McDonalds and Target, also have pernicious student loan debts leftover from a failed try at community college or the like, and for folks like that, an interest-bearing debt of 5-15k is extraordinarily burdensome, even if only as a massive weight on a credit score calculated using basically no other inputs given how expensive consumer credit is for the poor. That's why Biden has floated the 10k forgiveness plan, it would be a lifesaver for folks like that.
Loan forgiveness only works to exacerbate the fees on loans incentives if it becomes a regular, expected thing and there are no changes made to the federal loan system. The latter must happen, but holding up or ignoring the value of one time forgiveness is not the way to go imo
To the extent that Trump and Obama have taken action on student loans (pre-pandemic), it's been to forgive loans for a favorite group that does not and will not ever have the ability to pay. That's an easy thing to do because it doesn't actually create a hole in the budget, it just writes off the one that already exists. Trump's pet demographic was disabled vets, Obama's was for-profit university attendees. Respectable decisions, but they're low-hanging fruit.
Writing off another one or two of those groups is probably in the cards. But after that you get into the groups where the debt is being paid, perhaps at a great cost to the debtor but the payments are being made nonetheless. Which ends up being an awfully regressive stimulus overall. And any "targeted" attempts seem pretty mediocre at addressing the core problem as well; something like targeting only CC or bachelors debt seems nice, but unfairly excludes the substantial number of people with a poor-performing graduate degree that isn't as wealth-generating as an MD.
The "didn't get their money's worth for their education" group - whether they finished the degree and only found a shitty job, or didn't finish - deserves some sympathy. I'd include your "brief stint in college -> unskilled labor" group there. Helping them via student loan forgiveness is still certainly regressive. If we're talking short-term solutions, cutting them a check for non-loan expenses is more poignant to short-term expenses like rent and groceries. And in the long-term - need to fix the core issue before starting to forgive on a large scale.
I mean, I have my fair share of student loans myself, and I would certainly benefit if they disappeared like magic one of these days. But I'm under no illusion that either I nor the free-money crowd around here are the right people to get that kind of aid. I'll take it if I get it, but I also understand if poor people get more aid than I do given their more significant need.
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I have no idea what you mean when you use the term regressive; as a policy term, it refers to the proportional, dollar for dollar benefit of a policy with reference to a target's income, which is why non-luxury sales taxes are the paradigmatic example of a regressive measure. Blanket forgiveness or cash stimulus that phases out at a higher income are progressive, not regressive, because the proportional value of those measures is inverse with reference to a target's income (a poor person realizes more proportional value from a dollar forgiven than a wealthy person does). If you're maintaining that lower income folks will suffer some kind of downstream economic effect that results from forgiveness, that's something different that isn't readily apparent without some value-based macro theorizing.
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On January 15 2021 17:02 Biff The Understudy wrote:Show nested quote +On January 15 2021 15:59 LegalLord wrote:On January 15 2021 13:29 Mohdoo wrote:
Biden going for stimulus and minimum wage of $15 right out of the gate is great. I’m satisfied so far. Noticeably he mentioned checks, unemployment, foreclosures, and so on... but student loans weren't part of the magic bailout package. I'm all in favour of free education but cancelling student debt right now is NOT a left wing measure. Everyone is hurting right now and what you ask is for the country to make an absolutely gigantic effort - and to its leaders to spend an unprecedented amount of political capital - for a measure that will ONLY benefit the college educated folks, whose level of income is far superior to people without a college degree. Essentially you want to transfer hundreds of billions of dollars to the pocket of the wealthiest and leave on the side of the road everyone else. 15$ minimum salary is much more urgent. That targets the folks who work at Wall Mart and Mc Donalds, and those should be the priority to a progressive. I understand that cancelling the student debt resonated in Sanders campaign because educated young people are the base of progressives and the measure benefits them immensely. And again. Student debt will have to be addressed and education should be free or affordable. But I'm happy that Biden spends his political capital and the ressources of the country to the working class.
Few things:
1. Student loan debt is mostly a problem for people from lower class families, not middle/upper. Out of all my friends who have gone to college, the ones from middle/upper families do not have student debt because their families paid their tuition. Others have very little because their parents paid living expenses or half of all tuition. My friends, including myself, who came from poor families have significantly more student debt because we had significantly less support.
2. Student debt is financed between 3-10% interest rate, which ends up spiraling out of control. Student debt is significantly higher than the cost of tuition. I would argue it is immoral for student loans to have interest rates. For the sake of this conversation, I will assume it doesn't need to be explained why college education is a net positive for society and the government. If it isn't free, it shouldn't have an interest rate. Or it should be like 1%. 5%+ interest rates on student debt is extremely immoral.
3. Young people fresh out of college are among the biggest spenders. They have lives to build and are aggressively working towards home ownership and other "baseline" purchases. These purchases end up being a huge boost to local businesses. People who spend help the economy much more than people who save their money. If that $500/month is being spent no matter what, sending that money to a local flooring company rather than a billion dollar bank is a good thing. Student debt fundamentally involves money going to large banks rather than local, smaller businesses where money spent changes hands MANY more time. Money spent locally is flat out significantly better for the economy than money siphoned by banks.
For these reasons, student loan forgiveness is a large net positive for the country and is an issue that impacts poorer families more than richer ones. Do you live in the US? It is possible you are misunderstanding how many people with college degrees make less than $60k/year. There are an enormous number of people in the US who have college degrees and low paying jobs. Its really bad for a lot of people.
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United Kingdom13775 Posts
It's kind of funny really. Measured by debt to GDP, we spent as much money during the last 15 years on "stopping the Great Depression 2.0" as we did during the Great Depression on handling it after it came around, and then fighting the war that was on the tail end of it. For all that we have a prolonged period of economic malaise and most people being priced out of the economy.
Sometimes I wonder if the liquidationists from the 20s-30s had more of a point than people gave them credit for. Might have been a tad too aggressive, but they had the very problems in mind that we're now suffering from in trying to save a fundamentally failing economy.
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On January 16 2021 00:58 Mohdoo wrote:Show nested quote +On January 15 2021 17:02 Biff The Understudy wrote:On January 15 2021 15:59 LegalLord wrote:On January 15 2021 13:29 Mohdoo wrote:
Biden going for stimulus and minimum wage of $15 right out of the gate is great. I’m satisfied so far. Noticeably he mentioned checks, unemployment, foreclosures, and so on... but student loans weren't part of the magic bailout package. I'm all in favour of free education but cancelling student debt right now is NOT a left wing measure. Everyone is hurting right now and what you ask is for the country to make an absolutely gigantic effort - and to its leaders to spend an unprecedented amount of political capital - for a measure that will ONLY benefit the college educated folks, whose level of income is far superior to people without a college degree. Essentially you want to transfer hundreds of billions of dollars to the pocket of the wealthiest and leave on the side of the road everyone else. 15$ minimum salary is much more urgent. That targets the folks who work at Wall Mart and Mc Donalds, and those should be the priority to a progressive. I understand that cancelling the student debt resonated in Sanders campaign because educated young people are the base of progressives and the measure benefits them immensely. And again. Student debt will have to be addressed and education should be free or affordable. But I'm happy that Biden spends his political capital and the ressources of the country to the working class. Few things: 1. Student loan debt is mostly a problem for people from lower class families, not middle/upper. Out of all my friends who have gone to college, the ones from middle/upper families do not have student debt because their families paid their tuition. Others have very little because their parents paid living expenses or half of all tuition. My friends, including myself, who came from poor families have significantly more student debt because we had significantly less support. 2. Student debt is financed between 3-10% interest rate, which ends up spiraling out of control. Student debt is significantly higher than the cost of tuition. I would argue it is immoral for student loans to have interest rates. For the sake of this conversation, I will assume it doesn't need to be explained why college education is a net positive for society and the government. If it isn't free, it shouldn't have an interest rate. Or it should be like 1%. 5%+ interest rates on student debt is extremely immoral. 3. Young people fresh out of college are among the biggest spenders. They have lives to build and are aggressively working towards home ownership and other "baseline" purchases. These purchases end up being a huge boost to local businesses. People who spend help the economy much more than people who save their money. If that $500/month is being spent no matter what, sending that money to a local flooring company rather than a billion dollar bank is a good thing. Student debt fundamentally involves money going to large banks rather than local, smaller businesses where money spent changes hands MANY more time. Money spent locally is flat out significantly better for the economy than money siphoned by banks. For these reasons, student loan forgiveness is a large net positive for the country and is an issue that impacts poorer families more than richer ones. Do you live in the US? It is possible you are misunderstanding how many people with college degrees make less than $60k/year. There are an enormous number of people in the US who have college degrees and low paying jobs. Its really bad for a lot of people.
Okay, i am constantly amazed at just how shitty some stuff in the US is.
I automatically assumed that student debt was interest free, or at worst at an interest rate tied to some inflation index. I didn't even imagine higher interest rates on student debt as a possibility, especially considering that from all people tell me here student loans are basically impossible to default on.
That is a far more important thing to fix, and should also be much easier to do and justify, while also solving a lot of problems people have.
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United Kingdom13775 Posts
On January 16 2021 00:56 farvacola wrote:
I have no idea what you mean when you use the term regressive; as a policy term, it refers to the proportional, dollar for dollar benefit of a policy with reference to a target's income, which is why non-luxury sales taxes are the paradigmatic example of a regressive measure. Blanket forgiveness or cash stimulus that phases out at a higher income are progressive, not regressive, because the proportional value of those measures is inverse with reference to a target's income (a poor person realizes more proportional value from a dollar forgiven than a wealthy person does). If you're maintaining that lower income folks will suffer some kind of downstream economic effect that results from forgiveness, that's something different that isn't readily apparent without some value-based macro theorizing.
It's regressive in the sense that you're helping those that are better off more than you're helping those that are worse off when you start forgiving loans at any scale. That would certainly be the result of a blanket "all loans are forgiven" strategy, and any sort of attempt to balance that out is going to be by necessity quite complex. A foolish policy to pursue without a long-term plan, to be sure.
On January 16 2021 00:58 Mohdoo wrote:
Few things:
1. Student loan debt is mostly a problem for people from lower class families, not middle/upper. Out of all my friends who have gone to college, the ones from middle/upper families do not have student debt because their families paid their tuition. Others have very little because their parents paid living expenses or half of all tuition. My friends, including myself, who came from poor families have significantly more student debt because we had significantly less support.
Dubious. The middle / upper middle is where parents have enough money to be excluded from financial aid, but not enough to be able to comfortably pay the full bill. Can't pay a kid's $200k tuition bill on a doctor's or engineer's salary, really - you need a rich person's income for that.
On January 16 2021 00:58 Mohdoo wrote:
2. Student debt is financed between 3-10% interest rate, which ends up spiraling out of control. Student debt is significantly higher than the cost of tuition. I would argue it is immoral for student loans to have interest rates. For the sake of this conversation, I will assume it doesn't need to be explained why college education is a net positive for society and the government. If it isn't free, it shouldn't have an interest rate. Or it should be like 1%. 5%+ interest rates on student debt is extremely immoral.
Agreed; it's insane how much higher the student loan rates are than, say, mortgage rates. It's not far from the rates on personal loans.
On January 16 2021 00:58 Mohdoo wrote:
3. Young people fresh out of college are among the biggest spenders. They have lives to build and are aggressively working towards home ownership and other "baseline" purchases. These purchases end up being a huge boost to local businesses. People who spend help the economy much more than people who save their money. If that $500/month is being spent no matter what, sending that money to a local flooring company rather than a billion dollar bank is a good thing. Student debt fundamentally involves money going to large banks rather than local, smaller businesses where money spent changes hands MANY more time. Money spent locally is flat out significantly better for the economy than money siphoned by banks.
For these reasons, student loan forgiveness is a large net positive for the country and is an issue that impacts poorer families more than richer ones. Do you live in the US? It is possible you are misunderstanding how many people with college degrees make less than $60k/year. There are an enormous number of people in the US who have college degrees and low paying jobs. Its really bad for a lot of people.
Writing checks to poors would be a lot better way to fuel a debt-driven spending spree than giving the money to people who have $500 to spare. My heart certainly bleeds for the $60k/yr folks that have a $500/mo hole burning in their shopping budget, but at least they can afford it. There's a lot of bad debt going around, so this one isn't too special.
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On January 16 2021 01:41 LegalLord wrote:Show nested quote +On January 16 2021 00:56 farvacola wrote:
I have no idea what you mean when you use the term regressive; as a policy term, it refers to the proportional, dollar for dollar benefit of a policy with reference to a target's income, which is why non-luxury sales taxes are the paradigmatic example of a regressive measure. Blanket forgiveness or cash stimulus that phases out at a higher income are progressive, not regressive, because the proportional value of those measures is inverse with reference to a target's income (a poor person realizes more proportional value from a dollar forgiven than a wealthy person does). If you're maintaining that lower income folks will suffer some kind of downstream economic effect that results from forgiveness, that's something different that isn't readily apparent without some value-based macro theorizing. It's regressive in the sense that you're helping those that are better off more than you're helping those that are worse off when you start forgiving loans at any scale. That would certainly be the result of a blanket "all loans are forgiven" strategy, and any sort of attempt to balance that out is going to be by necessity quite complex. A foolish policy to pursue without a long-term plan, to be sure. Show nested quote +On January 16 2021 00:58 Mohdoo wrote:
Few things:
1. Student loan debt is mostly a problem for people from lower class families, not middle/upper. Out of all my friends who have gone to college, the ones from middle/upper families do not have student debt because their families paid their tuition. Others have very little because their parents paid living expenses or half of all tuition. My friends, including myself, who came from poor families have significantly more student debt because we had significantly less support. Dubious. The middle / upper middle is where parents have enough money to be excluded from financial aid, but not enough to be able to comfortably pay the full bill. Can't pay a kid's $200k tuition bill on a doctor's or engineer's salary, really - you need a rich person's income for that. Show nested quote +On January 16 2021 00:58 Mohdoo wrote:
2. Student debt is financed between 3-10% interest rate, which ends up spiraling out of control. Student debt is significantly higher than the cost of tuition. I would argue it is immoral for student loans to have interest rates. For the sake of this conversation, I will assume it doesn't need to be explained why college education is a net positive for society and the government. If it isn't free, it shouldn't have an interest rate. Or it should be like 1%. 5%+ interest rates on student debt is extremely immoral. Agreed; it's insane how much higher the student loan rates are than, say, mortgage rates. It's not far from the rates on personal loans. Show nested quote +On January 16 2021 00:58 Mohdoo wrote:
3. Young people fresh out of college are among the biggest spenders. They have lives to build and are aggressively working towards home ownership and other "baseline" purchases. These purchases end up being a huge boost to local businesses. People who spend help the economy much more than people who save their money. If that $500/month is being spent no matter what, sending that money to a local flooring company rather than a billion dollar bank is a good thing. Student debt fundamentally involves money going to large banks rather than local, smaller businesses where money spent changes hands MANY more time. Money spent locally is flat out significantly better for the economy than money siphoned by banks.
For these reasons, student loan forgiveness is a large net positive for the country and is an issue that impacts poorer families more than richer ones. Do you live in the US? It is possible you are misunderstanding how many people with college degrees make less than $60k/year. There are an enormous number of people in the US who have college degrees and low paying jobs. Its really bad for a lot of people. Writing checks to poors would be a lot better way to fuel a debt-driven spending spree than giving the money to people who have $500 to spare. My heart certainly bleeds for the $60k/yr folks that have a $500/mo hole burning in their shopping budget, but at least they can afford it. There's a lot of bad debt going around, so this one isn't too special.
Maybe its not useful to use lower/middle/upper class definitions. My friends from families with money have either extremely little or zero student loan debt. My friends from poorer families have a lot more student loan debt. This trend appears relatively universal. There are a variety of factors that play into that.
I think focusing on what people can pull off isn't quite ambitious enough. We should not say "well this person can afford it, so we're good there". We can do better than that. We should be striving for the best system we can imagine, not leaving a situation alone once it isn't collapsing. The thought of helping people who don't need help shouldn't send a chill down our spines. Fundamentally, the impact of interest needs to be erased from student debt, payments need to be lower and interest rates should not exist.
Sure, someone making $60 with $500/month payments are getting by, but that $500 could be better spent locally. We can optimize this system by helping people who don't need help. Focusing on need rather than benefit is a less beneficial way to frame a problem.
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On January 16 2021 01:41 LegalLord wrote:Show nested quote +On January 16 2021 00:56 farvacola wrote:
I have no idea what you mean when you use the term regressive; as a policy term, it refers to the proportional, dollar for dollar benefit of a policy with reference to a target's income, which is why non-luxury sales taxes are the paradigmatic example of a regressive measure. Blanket forgiveness or cash stimulus that phases out at a higher income are progressive, not regressive, because the proportional value of those measures is inverse with reference to a target's income (a poor person realizes more proportional value from a dollar forgiven than a wealthy person does). If you're maintaining that lower income folks will suffer some kind of downstream economic effect that results from forgiveness, that's something different that isn't readily apparent without some value-based macro theorizing. It's regressive in the sense that you're helping those that are better off more than you're helping those that are worse off when you start forgiving loans at any scale. That would certainly be the result of a blanket "all loans are forgiven" strategy, and any sort of attempt to balance that out is going to be by necessity quite complex. A foolish policy to pursue without a long-term plan, to be sure.
The only way this could be true is if you assume that folks on $0 income based repayment plans realize less benefit from forgiveness than folks whose incomes are higher enough to force them to pay something more than $0. In order for that assumption to hold, you need to also assume that carrying a static student loan debt while making $0 payments costs less than the <$0 payments being made by other, higher earning borrowers. That second assumption is where the adage that it's expensive to be poor needs to be addressed (along with time horizon problems), meaning you need cannot ignore all of the additional, mostly hidden costs of stuff like consumer credit for those with bottom-tier incomes and a student loan debt that won't be forgiven until 20-25 years, and that's all assuming these $0 payors remain poor enough that their payments remain anchored at the bottom.
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On January 16 2021 02:00 farvacola wrote:Show nested quote +On January 16 2021 01:41 LegalLord wrote:On January 16 2021 00:56 farvacola wrote:
I have no idea what you mean when you use the term regressive; as a policy term, it refers to the proportional, dollar for dollar benefit of a policy with reference to a target's income, which is why non-luxury sales taxes are the paradigmatic example of a regressive measure. Blanket forgiveness or cash stimulus that phases out at a higher income are progressive, not regressive, because the proportional value of those measures is inverse with reference to a target's income (a poor person realizes more proportional value from a dollar forgiven than a wealthy person does). If you're maintaining that lower income folks will suffer some kind of downstream economic effect that results from forgiveness, that's something different that isn't readily apparent without some value-based macro theorizing. It's regressive in the sense that you're helping those that are better off more than you're helping those that are worse off when you start forgiving loans at any scale. That would certainly be the result of a blanket "all loans are forgiven" strategy, and any sort of attempt to balance that out is going to be by necessity quite complex. A foolish policy to pursue without a long-term plan, to be sure. The only way this could be true is if you assume that folks on $0 income based repayment plans realize less benefit from forgiveness than folks whose incomes are higher enough to force them to pay something more than $0. In order for that assumption to hold, you need to also assume that carrying a static student loan debt while making $0 payments costs less than the <$0 payments being made by other, higher earning borrowers. That second assumption is where the adage that it's expensive to be poor needs to be addressed (along with time horizon problems), meaning you need cannot ignore all of the additional, mostly hidden costs of stuff like consumer credit for those with bottom-tier incomes and a student loan debt that won't be forgiven until 20-25 years, and that's all assuming these $0 payors remain poor enough that their payments remain anchored at the bottom.
I thought the point was that there is less student debt in the poorer population simply because there is less university educated people there. Like if we assume that the tuition fees are randomly allocated (or near enough) across university attending students then whatever say decile has the highest amount of college goers has the highest debt total. Then cancelling the debt helps that segment the most.
I thinks somewhat reasonable to assume that say parental income is positively correlated with likelihood to attend university. Then flat forgiveness of student debt would help those better off more as they're more likely have gone to university and accumulate some debt as a result. In that sense student debt forgiveness might be seen as regressive and indeed subsidising those who are better off.
However if we only look at those who have some student debt it, then likely forgiving the debt has the biggest impact on those with lowest incomes and/or assets, meaning that it would be a progressive policy. With different framing it changes completely, and I think both are important to consider.
E: But yeah as everyone in this thread have repeatedly said, any debt forgiveness really doesn't make sense anyways without a larger tuition fee reform. If you remove the debt but keep the system that generates it as it is the same problem emerges in a couple of years. Whether it is legislating hard caps on tuition fees or changing the student funding system, something has to fundamentally change.
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On January 16 2021 02:12 JimmiC wrote:
The main issue of forgiveness of student loans is it is a Band-Aid that does nothing to address the problem.
There are many problems. Forgives solves quite a few of them related to helping the economy. It is important to remember that you can solve some problems rather than all of them and still have a benefit. It can be solved through multiple measures over many years. It is not necessary to have a silver bullet before taking action. We can chip away at the issue.
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United Kingdom13775 Posts
On January 16 2021 01:57 Mohdoo wrote:Show nested quote +On January 16 2021 01:41 LegalLord wrote:On January 16 2021 00:56 farvacola wrote:
I have no idea what you mean when you use the term regressive; as a policy term, it refers to the proportional, dollar for dollar benefit of a policy with reference to a target's income, which is why non-luxury sales taxes are the paradigmatic example of a regressive measure. Blanket forgiveness or cash stimulus that phases out at a higher income are progressive, not regressive, because the proportional value of those measures is inverse with reference to a target's income (a poor person realizes more proportional value from a dollar forgiven than a wealthy person does). If you're maintaining that lower income folks will suffer some kind of downstream economic effect that results from forgiveness, that's something different that isn't readily apparent without some value-based macro theorizing. It's regressive in the sense that you're helping those that are better off more than you're helping those that are worse off when you start forgiving loans at any scale. That would certainly be the result of a blanket "all loans are forgiven" strategy, and any sort of attempt to balance that out is going to be by necessity quite complex. A foolish policy to pursue without a long-term plan, to be sure. On January 16 2021 00:58 Mohdoo wrote:
Few things:
1. Student loan debt is mostly a problem for people from lower class families, not middle/upper. Out of all my friends who have gone to college, the ones from middle/upper families do not have student debt because their families paid their tuition. Others have very little because their parents paid living expenses or half of all tuition. My friends, including myself, who came from poor families have significantly more student debt because we had significantly less support. Dubious. The middle / upper middle is where parents have enough money to be excluded from financial aid, but not enough to be able to comfortably pay the full bill. Can't pay a kid's $200k tuition bill on a doctor's or engineer's salary, really - you need a rich person's income for that. On January 16 2021 00:58 Mohdoo wrote:
2. Student debt is financed between 3-10% interest rate, which ends up spiraling out of control. Student debt is significantly higher than the cost of tuition. I would argue it is immoral for student loans to have interest rates. For the sake of this conversation, I will assume it doesn't need to be explained why college education is a net positive for society and the government. If it isn't free, it shouldn't have an interest rate. Or it should be like 1%. 5%+ interest rates on student debt is extremely immoral. Agreed; it's insane how much higher the student loan rates are than, say, mortgage rates. It's not far from the rates on personal loans. On January 16 2021 00:58 Mohdoo wrote:
3. Young people fresh out of college are among the biggest spenders. They have lives to build and are aggressively working towards home ownership and other "baseline" purchases. These purchases end up being a huge boost to local businesses. People who spend help the economy much more than people who save their money. If that $500/month is being spent no matter what, sending that money to a local flooring company rather than a billion dollar bank is a good thing. Student debt fundamentally involves money going to large banks rather than local, smaller businesses where money spent changes hands MANY more time. Money spent locally is flat out significantly better for the economy than money siphoned by banks.
For these reasons, student loan forgiveness is a large net positive for the country and is an issue that impacts poorer families more than richer ones. Do you live in the US? It is possible you are misunderstanding how many people with college degrees make less than $60k/year. There are an enormous number of people in the US who have college degrees and low paying jobs. Its really bad for a lot of people. Writing checks to poors would be a lot better way to fuel a debt-driven spending spree than giving the money to people who have $500 to spare. My heart certainly bleeds for the $60k/yr folks that have a $500/mo hole burning in their shopping budget, but at least they can afford it. There's a lot of bad debt going around, so this one isn't too special. Maybe its not useful to use lower/middle/upper class definitions. My friends from families with money have either extremely little or zero student loan debt. My friends from poorer families have a lot more student loan debt. This trend appears relatively universal. There are a variety of factors that play into that. I think focusing on what people can pull off isn't quite ambitious enough. We should not say "well this person can afford it, so we're good there". We can do better than that. We should be striving for the best system we can imagine, not leaving a situation alone once it isn't collapsing. The thought of helping people who don't need help shouldn't send a chill down our spines. Fundamentally, the impact of interest needs to be erased from student debt, payments need to be lower and interest rates should not exist. Sure, someone making $60 with $500/month payments are getting by, but that $500 could be better spent locally. We can optimize this system by helping people who don't need help. Focusing on need rather than benefit is a less beneficial way to frame a problem.
The "middle" classes are the worst off from student loans, that much is true. Rich people can afford $200k cash for their kids.
The problem with all your "best system possible" is that to do that you need to solve the larger education problem (e.g. why does it cost $30-50k/yr to educate students when there's no fundamental reason for schools to cost that much), and the debt problem. Would you rather pay another $500/mo in taxes instead of paying off your loans, to achieve the same result? Or maybe just add it to the debt and hope it never matters. It doesn't seem like smart policy no matter how you slice it. And honestly, there are bigger fish to fry than making things better for people who don't have it so bad in the first place.
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On January 16 2021 02:20 Oukka wrote:Show nested quote +On January 16 2021 02:00 farvacola wrote:On January 16 2021 01:41 LegalLord wrote:On January 16 2021 00:56 farvacola wrote:
I have no idea what you mean when you use the term regressive; as a policy term, it refers to the proportional, dollar for dollar benefit of a policy with reference to a target's income, which is why non-luxury sales taxes are the paradigmatic example of a regressive measure. Blanket forgiveness or cash stimulus that phases out at a higher income are progressive, not regressive, because the proportional value of those measures is inverse with reference to a target's income (a poor person realizes more proportional value from a dollar forgiven than a wealthy person does). If you're maintaining that lower income folks will suffer some kind of downstream economic effect that results from forgiveness, that's something different that isn't readily apparent without some value-based macro theorizing. It's regressive in the sense that you're helping those that are better off more than you're helping those that are worse off when you start forgiving loans at any scale. That would certainly be the result of a blanket "all loans are forgiven" strategy, and any sort of attempt to balance that out is going to be by necessity quite complex. A foolish policy to pursue without a long-term plan, to be sure. The only way this could be true is if you assume that folks on $0 income based repayment plans realize less benefit from forgiveness than folks whose incomes are higher enough to force them to pay something more than $0. In order for that assumption to hold, you need to also assume that carrying a static student loan debt while making $0 payments costs less than the <$0 payments being made by other, higher earning borrowers. That second assumption is where the adage that it's expensive to be poor needs to be addressed (along with time horizon problems), meaning you need cannot ignore all of the additional, mostly hidden costs of stuff like consumer credit for those with bottom-tier incomes and a student loan debt that won't be forgiven until 20-25 years, and that's all assuming these $0 payors remain poor enough that their payments remain anchored at the bottom. I thought the point was that there is less student debt in the poorer population simply because there is less university educated people there. Like if we assume that the tuition fees are randomly allocated (or near enough) across university attending students then whatever say decile has the highest amount of college goers has the highest debt total. Then cancelling the debt helps that segment the most. I thinks somewhat reasonable to assume that say parental income is positively correlated with likelihood to attend university. Then flat forgiveness of student debt would help those better off more as they're more likely have gone to university and accumulate some debt as a result. In that sense student debt forgiveness might be seen as regressive and indeed subsidising those who are better off. However if we only look at those who have some student debt it, then likely forgiving the debt has the biggest impact on those with lowest incomes and/or assets, meaning that it would be a progressive policy. With different framing it changes completely, and I think both are important to consider. E: But yeah as everyone in this thread have repeatedly said, any debt forgiveness really doesn't make sense anyways without a larger tuition fee reform. If you remove the debt but keep the system that generates it as it is the same problem emerges in a couple of years. Whether it is legislating hard caps on tuition fees or changing the student funding system, something has to fundamentally change.
Sure, if we're defining "regressive policy" as policy that tends to help a group that is better off than the bottom, that makes sense. However, regressive as a policy term tends to be used as a function of cost rather than benefit, which is why consumption taxes, licensing fees, and court costs/bail are the three most common examples of regressive measures; all three are cost events of general applicability that are difficult or impossible for the bottom wrung to avoid.
And yes, it's worth reiterating that piecemeal solutions won't work here, but that criticism applies in equal measure to cash payments as it does student loan forgiveness. Without dramatic changes to how consumer finance is regulated, much of that money will be swept up by all of the ways that the poor are charged extra for their poverty (which is related to why so many stimulus recipients have used the money to simply pay off debts).
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