EPTUS Politics Mega-thread - Page 3404
| Forum Index > General Forum |
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 | ||
|
RvB
Netherlands6297 Posts
| ||
|
Mohdoo
United States15743 Posts
On December 14 2021 15:47 RvB wrote: How will forgiving student loans make education cheaper? You've just given an even larger subsidy to students who will still go to the same university except with more money to spend. You're not adding an incentive for cost control by forgiving student loans. As soon as the federal government forgives student loans, that door is never getting closed. The costs of education will inevitably end up being the federal government's problem eventually. As such, they will work to reduce the cost, since they know they will be paying it. This dynamic can be observed all over the place. The problem is that the wrong people are motivated to fix the problem. The people suffering can't fix it. The people who can fix it aren't suffering. | ||
|
Velr
Switzerland10924 Posts
The price of education in the US seems ridiculous but the people that actually can get these loans aren’t the people truely suffering under this. Aren’t they, after they completed their education, in fact better off than the «average» american? This whole student loan forgiveness thing just feels like some stupid act to try to grab some young voters. | ||
|
RvB
Netherlands6297 Posts
On December 14 2021 16:08 Mohdoo wrote: As soon as the federal government forgives student loans, that door is never getting closed. The costs of education will inevitably end up being the federal government's problem eventually. As such, they will work to reduce the cost, since they know they will be paying it. This dynamic can be observed all over the place. The problem is that the wrong people are motivated to fix the problem. The people suffering can't fix it. The people who can fix it aren't suffering. It already is the government's problem since student loans are subsidised and they don't look at the risk profile of the borrower. I don't agree with your conclusion that if the government pays they'll necessarily try to reduce costs. There are many government programmes where they have no problem funding it with increased lending while letting costs get out of hand. | ||
|
Gahlo
United States35173 Posts
On December 14 2021 19:36 Velr wrote: «Suffering»… I have a hard time believing that the people able to study (and therefore take these loans) are the people that are truely suffering in the US. The price of education in the US seems ridiculous but the people that actually can get these loans aren’t the people truely suffering under this. Aren’t they, after they completed their education, in fact better off than the «average» american? This whole student loan forgiveness thing just feels like some stupid act to try to grab some young voters. There's a lot of people, though maybe not as many right now given the great resignation, that graduate with their student debt and either can't find a job in the field they studied in or become underemployed in that field. The weight of the loan only offsets itself if one can pay it and still have a decent living. | ||
Liquid`Drone
Norway28870 Posts
The discussion feels a bit like ones relating to automation or industries that are disappearing, like coal miners or whathaveyou. So far, I don't think 'just automate and let the workers figure it out' has really yielded ideal results, and in the future, 50 year old truckers can't be told 'learn to code or get a job in health care'. Also feels like all the options have serious drawbacks though, both politically and for society. | ||
|
Mohdoo
United States15743 Posts
On December 14 2021 20:42 RvB wrote: It already is the government's problem since student loans are subsidised and they don't look at the risk profile of the borrower. I don't agree with your conclusion that if the government pays they'll necessarily try to reduce costs. There are many government programmes where they have no problem funding it with increased lending while letting costs get out of hand. The profile of the borrower doesn’t matter because the borrower can never default. If you declare bankruptcy, student loans don’t go away. Either you die or you pay. “Letting costs get out of hand” is not a single scenario. Within the realm of high costs, there are large differences in severity. Your location is listed as the Netherlands. Are you familiar with the specifics of university costs in the US over the last 20 years? Prior to the freeze, we were paying about $800 per month. When we stopped spending that money on loans, we put it into other stuff that, statistically speaking, had a significantly larger impact on the health of the economy. From a purely mathematical perspective, society benefits from student loan payments being frozen. The ethics are up for debate but from a pure growth perspective, student loans being paused is good policy. | ||
|
Oukka
Finland1683 Posts
On December 14 2021 23:39 Mohdoo wrote: The profile of the borrower doesn’t matter because the borrower can never default. If you declare bankruptcy, student loans don’t go away. Either you die or you pay. “Letting costs get out of hand” is not a single scenario. Within the realm of high costs, there are large differences in severity. Your location is listed as the Netherlands. Are you familiar with the specifics of university costs in the US over the last 20 years? Prior to the freeze, we were paying about $800 per month. When we stopped spending that money on loans, we put it into other stuff that, statistically speaking, had a significantly larger impact on the health of the economy. From a purely mathematical perspective, society benefits from student loan payments being frozen. The ethics are up for debate but from a pure growth perspective, student loans being paused is good policy. Student loans being paused is just government borrowing/tax break in terms of national accounting. Of course it boosts demand and growth. However, that doesn't mean that it is good policy. All you've done for now is moved the private debt to being a government debt. It'll eventually be paid back either from the government accounts via higher taxes or from individuals' pockets when payments are resumed and that'll contract demand and slow down growth at that point. Anyways, I think there are better arguments for paying for university education from the public purse than "a tax break for Americans above median wage boosts demand". | ||
|
Mohdoo
United States15743 Posts
| ||
|
LegalLord
United States13779 Posts
On December 14 2021 19:36 Velr wrote: «Suffering»… I have a hard time believing that the people able to study (and therefore take these loans) are the people that are truely suffering in the US. The price of education in the US seems ridiculous but the people that actually can get these loans aren’t the people truely suffering under this. Aren’t they, after they completed their education, in fact better off than the «average» american? This whole student loan forgiveness thing just feels like some stupid act to try to grab some young voters. A monthly $500-1000 payment is hefty even if you do manage to graduate and got a degree in something lucrative and don't end up being one of the many graduates who ends up underemployed due to the relative scarcity of the jobs in said lucrative field of employment. It's worse if you do land into one of those groups of people off the well-beaten path to perfect success. And that's not even mentioning the people that had situations so bad that the government was forced to write off their obviously delinquent loans: for-profit university students, unemployably disabled veterans, etc. I'm definitely not the biggest advocate for student loan forgiveness in a vacuum, as some of my posts from a year ago would show, but I can pretty confidently say that "the people with student loans are the least in need of financial assistance" and any variation on that is both commonly spewed and thoroughly wrong. Student loans are one of the biggest debt traps that exist in the US, and with the special factor of not being able to be discharged in bankruptcy. | ||
|
Velr
Switzerland10924 Posts
On December 14 2021 23:58 Mohdoo wrote: It is a mistake to assume this only applies to people above the median wage. A large number of people have tons of debt while making very little. This just seems to be not true? https://www.statista.com/statistics/233162/us-poverty-rate-by-education/#:~:text=This statistic shows the poverty rate in the,line in the United States. Already a member? There are some well studied (bachelor+, why even bother studying else?) people that have it rough, but they are few and far inbetween when compared with people that couldn't get a degree. Student loan forgiveness would be a present to the middle (and upper middle) class. You can still like it but calling it anything more seems plain ridiculouse to me. And as plenty of people have said, just erasing debt won't do shit all if not some big reform is done about education costs in general. | ||
|
farvacola
United States18866 Posts
| ||
|
LegalLord
United States13779 Posts
This page has a nice graphic to illustrate the point: ![[image loading]](https://i.imgur.com/ghiACwc.png) Here are the income quintiles for reference. Basically, if you're not one of the golden geese that make $100k+ (or like $150k+ in one of the stupidly expensive cities like NYC or San Francisco), student loans kind of really suck. Good luck if you didn't have a picture-perfect post-college career. | ||
|
Mohdoo
United States15743 Posts
On December 15 2021 00:11 Velr wrote: This just seems to be not true? https://www.statista.com/statistics/233162/us-poverty-rate-by-education/#:~:text=This statistic shows the poverty rate in the,line in the United States. Already a member? Well there are some that are poor despite having studied but they are a tiny minority. Student loan forgivness is a present to the middle+ class. You can support that but calling it anything else seems pretty dishonest to me. 4% of BS holders is an enormous amount of people. I don't think you are recognizing how many people that is, how much they are suffering, and what a nail in the coffin student loan payments resuming is for those people. A large number of my friends have a BS and realistically have no path to ever owning a home. Home prices in Oregon are going through the roof at a rate that far outpaces wage growth. It is really a nightmare scenario for many people. Home ownership is a really valuable method of being able to retire some day. Today represents the best this situation will be for anyone who doesn't own a home. Their retirement is slipping further and further away every day. As you pointed out, people sipping martinis don't need to care much about this. Since student loan repayment is based on your adjusted gross income, people who are in high demand jobs can just move out of the country because you are only taxed on income after the first $100k. So as long as my wife and I make less than $200k while living abroad, my payment would be extremely small. I can afford to do that and I work for a company and in an industry where I can essentially choose where I live on a whim and they will always sponsor me to immigrate. In many ways, society has split and it is only going to get worse for the people who didn't manage to hop on the wealth train. Student loans are a brutal punch while being in that situation. I can pay mine or I can even choose to move to Europe and only pay like $100/month. Many of my friends are barely well enough employed just staying in the US. | ||
|
Starlightsun
United States1405 Posts
On December 15 2021 00:20 farvacola wrote: Last I looked, folks who failed to earn a degree accounted for around 23-25% of the total student debt load. Yikes. It just doesn't seem right that teenagers just graduating highschool are being offered these giant loans that have fairly high interest rates to boot. Seems easy for a lot of teens to fall into credit card debt as well. I don't know the merits of blanket debt forgiveness but we absolutely should do more about our society's many debt traps and predatory lending. | ||
|
LegalLord
United States13779 Posts
On December 15 2021 00:33 Starlightsun wrote: Yikes. It just doesn't seem right that teenagers just graduating highschool are being offered these giant loans that have fairly high interest rates to boot. Seems easy for a lot of teens to fall into credit card debt as well. I don't know the merits of blanket debt forgiveness but we absolutely should do more about our society's many debt traps and predatory lending. What's worse IMO is that, unlike for other predatory-and-dischargeable forms of debt like credit card debt and auto loans, kids are told that it's a "responsible" decision to drop $50-200k on an attempt to receive a college degree via a loan that you can't get forgiven. No guarantee of getting that degree or a job that makes it worth it, of course - it's on you to pull yourself up by your bootstraps and beat the odds of landing into a debt trap. | ||
|
JimmiC
Canada22817 Posts
| ||
|
Oukka
Finland1683 Posts
On December 15 2021 00:30 LegalLord wrote: A misleading statistic, to say the least. Yes, it's true that people at/below the poverty line in the US are generally the least educated. That's the people that make just about full-time minimum wage or less and have other constraints. But only slightly above that range, and far more common, is the 80% of the country that makes slightly more money but is buried by just about unserviceable debt. This page has a nice graphic to illustrate the point: Here are the income quintiles for reference. Basically, if you're not one of the golden geese that make $100k+ (or like $150k+ in one of the stupidly expensive cities like NYC or San Francisco), student loans kind of really suck. Good luck if you didn't have a picture-perfect post-college career. So if I understand this graph correctly, the benefits of pausing student loan repayments are very heavily weighted towards the people in the highest two income quintiles. So much so that either of the top two income quintiles alone benefits from the loan repayment freeze more than the lowest three quintiles combined? To me that looks a lot like a tax break for the high earners. If you want to target the low earners then target those. Now lions share of the cash injection from payment freeze seems to go into the pockets of top 40% earners. Obviously cross-sectional data doesn't really show the full picture, for a better understanding you'd need to look at this over lifetime earnings rather than a snapshot in time. | ||
|
farvacola
United States18866 Posts
| ||
|
LegalLord
United States13779 Posts
On December 15 2021 01:24 Oukka wrote: So if I understand this graph correctly, the benefits of pausing student loan repayments are very heavily weighted towards the people in the highest two income quintiles. So much so that either of the top two income quintiles alone benefits from the loan repayment freeze more than the lowest three quintiles combined? To me that looks a lot like a tax break for the high earners. If you want to target the low earners then target those. Now lions share of the cash injection from payment freeze seems to go into the pockets of top 40% earners. Obviously cross-sectional data doesn't really show the full picture, for a better understanding you'd need to look at this over lifetime earnings rather than a snapshot in time. Well, there's certainly a few ways to interpret it, and no one clearly "best" way to do so. I'll at least give a couple of my thoughts on it. - The wealthiest quintile is the only one that has a significantly higher percentage of debt payments than debt outstanding, a good sign of being "on top of" the debt payments. 4th quintile is doing ok, everyone else is doing worse. Pretty consistent with farva's comment that it might be much more significant as percent of income. - Student debt is definitely somewhat top-loaded, but far less so than income & wealth distribution in the US in general. The top 10% owns 70% of the wealth, and the next 10 percent is probably the well-paid specialists who will get more than a fair share of wealth themselves. Far more than the 26% of debt they actually own. - I'd be interested in seeing some depiction like "student loans by income after adjusting for cost of living" since there's a big difference in making $100k in a city where apartments cost $3k versus $1k. That isn't shown here, but let's just say that the opportunity to make student debt servicing money is increasingly limited the further you go from overpriced cities. - Any comparison of student loan debt versus "lifetime earnings" is fraudulent by nature and reminds me of a pyramid scheme. Which is probably what it is. No doubt that student loan forgiveness is a bit more friendly to the wealthy than something like writing checks to poor people. But far less so than some policymakers seem to believe, and at a time like this the only outcome you could expect out of resuming student loan payments is widespread economic pain to everyone except the wealthiest for whom the payment is trivial. | ||
| ||
