US Politics Mega-thread - Page 3405

On December 15 2021 01:29 farvacola wrote:
That graph only provides a portion of the actual equation because it fails to account for the proportionality of payments made to income earned. If student loan payments are proportionalized against income, the benefits of pausing payments to the lower quintiles become more clear.

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.

On December 15 2021 01:49 Oukka wrote:


Yes I have no doubts about the household level benefits for the households in the lower income quintiles or even in the upper income quintiles. However, I have a problem with claiming that it is a good, effective or efficient policy in helping those who need it the most. Change the repayment income-progression, increase any other income based benefits, literally any income targeted intervention seems better at achieving the goal of helping the households with lowest incomes. Now for 73cents out of any dollar spent on this program go to the top 40% earners. You could literally achieve the same impact on everyone below median wage for quarter of the price if the debt repayment was only suspended for anyone making below median wage for example.

On December 15 2021 01:54 Mohdoo wrote:


This isn't an effective way to think of the problem because you aren't accounting for the fact that poor people are running on extremely thin margins. In terms of "benefit to quality of life" it is extremely skewed towards poorer people. Taking away $800 per month from me is significantly less harmful than taking $200 from someone making half as much money as me.



This ignore how government spending money to improve the economy can be a great investment. I think we have a few examples through history where spending money made society better. Every dollar I didn't spend on student loans this whole time got dumped into the economy. There are numerous studies out there which show people paying interest rather than purchasing goods/services is purely worse.

On December 15 2021 01:48 LegalLord wrote:

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.

On December 15 2021 01:54 Mohdoo wrote:


This isn't an effective way to think of the problem because you aren't accounting for the fact that poor people are running on extremely thin margins. In terms of "benefit to quality of life" it is extremely skewed towards poorer people. Taking away $800 per month from me is significantly less harmful than taking $200 from someone making half as much money as me.



This ignores how government spending money to improve the economy can be a great investment. I think we have a few examples through history where spending money made society better. Every dollar I didn't spend on student loans this whole time got dumped into the economy. There are numerous studies out there which show people paying interest rather than purchasing goods/services is purely worse.

On December 15 2021 04:01 LegalLord wrote:

Like... a welfare cliff? Might have to figure out a way to keep my income right below the cliff then. The accountant I'd need to do that would be cheaper than the loan payments. We already have income-driven repayment plans, as my student loan emails make a habit of mentioning; not that it ever gets rid of the debt.

Not that the strategy matters anyways. There are ways to do it that don't have to be either forgive or reinstate-all student loans, but we're well past the point of that being an option that is seriously considered. Crash it all come February 1st, or give it another delay.


I'd say that it's fraudulent because it is fraudulent.

Sure, there's plenty of evidence to show that college-educated professionals earn more money on average than non-college-educated professionals, and you can look at the people who are 70+ today to get an estimate of how much people who graduated 40 years ago did. There's definitely some useful information to be gleaned in such a comparison, but it all goes out the window when you start justifying the validity of a giant expense now against the supposition that by virtue of paying that expense you'll get a benefit that offsets it over the course of the next 40 years. The fact that those two numbers are within striking distance of each other should set off alarm bells in any sane person's head.

Pay $50-200k now, plus 6% or so interest, to buy this College Education Kit that, if you do things right, will give you a tenfold return over your lifetime! If it doesn't work out for any number of reasons (can't finish, no job, career goes off course), it's obviously your fault. Never mind the general decay in the quality of jobs available that drives a glut of college attendance to begin with, essentially guaranteeing that a less than ideal becomes the norm.

If that doesn't sound fraudulent, then I have a shitcoin to sell you. Infinite profit guaranteed™.

On December 15 2021 05:02 Sermokala wrote:
Decideing to kill a major part of consumer spending right as we head into some serious economic issues post covid-19 isn't a smart decision. I don't care how wealthy focused you think pauseing student loan payments are vs the cost of it to the government its undeniable at this point that adding an extra burden to middle-lower class people will represent the same effect as a new tax of $800 or more a month. Thats a margin that will see people become homeless, default on their mortgage, lose their cars, and a ton of other obvious economic effects.

If you really want to make America the nation to start the next global economic downturn then you decide to start student loans. If you want to win midterms in 2022 and avert a massive economic disaster then don't. Corporations and billionaires have already been given an equal amount to just forgive all of it.

On December 15 2021 03:10 Erasme wrote:
The best predictor of wealth is your zipcode. Aka were you born with money ? Congrats, you now have way better chances at anything you do from min 0 of your life. You can be dumb as a rock and you'll still have a higher chance of making it than a 190IQ low income kid.
What was even the point of your post though ? I can't relate it to anything posted before.

Early twin studies of adult individuals have found a heritability of IQ between 57% and 73%,[6] with the most recent studies showing heritability for IQ as high as 80%.[7]

On December 15 2021 05:33 Mohdoo wrote:

To your point, All the money I’ve saved on student loans has gone into making repairs or upgrades to my house. It is actual trickle down. The money I save on student loans changes hands many times. Compared to our (already characterized) impact of it vanishing into the interest void? The whole situation is so wild.

I honestly just don’t buy it. Until my payment is due, I refuse to believe this is their plan. There is no path to 2022 by resuming payments. Maybe their plan is to cut the payment in half. That’s why they are having people recalculate their payment, to emphasize the impact they have by doing something. I don’t know. I just don’t buy it. This can’t be real.

Edit: for anyone who thinks loan payments should resume: do you see a path to democrats retaining control despite resuming payments? What am I missing? How is this not political suicide? If a politician will always protect themselves above all else, how does this selfishly accomplish democrats goals? Aside from obvious “in the pocket of banks” etc

On December 15 2021 04:01 LegalLord wrote:
I'd say that it's fraudulent because it is fraudulent.

Sure, there's plenty of evidence to show that college-educated professionals earn more money on average than non-college-educated professionals, and you can look at the people who are 70+ today to get an estimate of how much people who graduated 40 years ago did. There's definitely some useful information to be gleaned in such a comparison, but it all goes out the window when you start justifying the validity of a giant expense now against the supposition that by virtue of paying that expense you'll get a benefit that offsets it over the course of the next 40 years. The fact that those two numbers are within striking distance of each other should set off alarm bells in any sane person's head.

On December 15 2021 06:10 confusedzerg wrote:

This goes against what the evidence is saying in studys I linked. Maybe I will link more to help.

First if you are born with money that mean you are higher chance to be IQ. Many study have shown it is genetic. Remember how IQ is designed to test independent of an education.
Study, this one very interesting I think you will agree: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4270739/
Study: https://www.nature.com/articles/mp201185
This study uses genome wide-association study which is the best method, most reliable.

You can read more here: https://en.wikipedia.org/wiki/Heritability_of_IQ


I appreciate this discussion. Thank you.

On December 15 2021 09:42 LegalLord wrote:

Which conclusion?

That a comparison of a lump sum expense now to "lifetime earnings" is fraudulent in nature? I assert that to be self-evident. It's the premise of any garden-variety fraud that your investment right now will be paid back many times over, and therefore the sticker shock is misplaced.

That past results are not indicative of future benefit for college education? Yes, I suppose so - a quick search yielded this article that compiles several studies to make the general argument that the overall benefit of college is certainly diminishing and potentially even trending towards negative. I'd make an argument fairly similar to what is outlined there, so it's worth a look.

Nothing here is a major revelation, though - it should be a matter of common sense that if price increases and the outcomes become less favorable, that the return on investment is decreasing on average. It might be the case that everyone is worse off and people who attended college (graduated or not) are on average less worse off, or maybe college graduates really are worse off by virtue of large loans (this one would be a surprise to me if true right now; could certainly see it being the case for very recent graduates studied a decade or two from now). But it takes only very straightforward review of the data to see diminishing outcomes, so much so that asking for "source in literature" seems like little more than a misguided appeal to authority.