The idea of forgiving student loans has been on the agenda of Democrats since the days of Barack Obama and the Occupy Wall Street movement.
In recent times some
progressive members of Congress have been aggressively demanding that Joe Biden
forgive student loans.
The Squad has been
leading this demand.
New York Rep.
Alexandria Ocasio-Cortez aka AOC is among the leading advocates of this idea.
https://twitter.com/AOC/status/1362181256457379846
https://twitter.com/AOC/status/1328397822912237568
https://twitter.com/AOC/status/1328401150186565636
https://twitter.com/AOC/status/1402717790402977796
Minnesota Rep. Ilhan
Omar sent myriad letters to
Biden and his Education Secretary Miguel Cardona, demanding federal student
loan forgiveness. Among the demand was the abolishment
of student loan debt.
https://twitter.com/IlhanMN/status/1299466534360932353
New York Congressman
Jamaal Bowman urged Biden to cancel all student loans.
https://twitter.com/RepBowman/status/1512871719022694400
Michigan Rep. Rashida
Tlaib, is also a staunch proponent of student loan forgiveness. In her blog,
Talib claimed that
canceling student debt is “a racial justice issue.”
Beyond the squad, New
York Rep. Grace Meng, also demanded Biden
forgive student loans “to address racial and economic equity issues”
According to
the Washington Post, the total outstanding student debt is $1.6
trillion with 53% of borrowers owing less than $20,000.
The Biden
administration has canceled more than $17
billion in student loans for 725,000 borrowers through targeted
relief, for government bureaucrats and permanently disabled individuals
So are ‘Squad’ member
demands solely based on compassion for the individual struggling to pay off
their education loans?
Georgia Rep. Nikema
Williams who also supported forgiving students loans made an honest disclosure
that she is still paying her student loan.
https://twitter.com/NikemaWilliams/status/1456096049089720320
So what about the
Squad?
The
Daily Caller reported details about student debt owed by Squad members.
AOC owes up
to $50,000 while Michigan Rep. Rashida Tlaib owes up
to $100,000 in student loans and Minnesota Rep. Ilhan Omar owes up to
$50,000 in student debt.
Rep. Jamaal Bowman
owes between $100,001 and $250,000, this is the highest
amount of student debt among New York representatives.
The
NY Post reported about other Democrat lawmakers with outstanding loan
balances.
Connecticut
Rep. Jahana Hayes and Texas Rep Veronica Escobar owe between $75,005 and $250,000. New
York Rep. Mondaire Jones owes between $15,001 and $50,000. Another New York
Rep. Grace Meng disclosed that
her spouse owes up to $250,000 in educational debt. Connecticut Sen. Chris
Murphy disclosed between $30,002 and $50,000 in loans for
himself and his wife.
Overall 13 Democrat
members of Congress reported that their individual debts range from $15,000 to
as much as $300,000, between 2021 to 2020.
Biden said
he is considering debt cancellation of $10,000 for people who earn
less than $150,000 per year.
AOC who earns
$174,000 per annum doesn’t qualify for the criteria, she lambasted
the idea on Twitter.
https://twitter.com/AOC/status/1530243894587363328
The Federal
Reserve estimates that over 43.4
million students in the U.S. owe $1.73
trillion in loans. The average federal student loan debt balance
is $37,113.
Since the Congress
members demanding loan waivers won’t be the sole beneficiaries, this cannot be
called a case of total conflict of interest.
Self-interest
undeniably is driving this demand. But self-interest or personal
experiences often are the starting point of any movement.
What we must question
is the overall idea and the timing for these demands.
This appears to be
the last desperate attempt by the Democrats to stop their losses during the
mid-terms in November.
The youth are among the most important contingents of Democrat voters. This group often tends to be burdened by student loans. If the Democrats forgive some amount of student loans it could enthuse voters, especially those liberal young voters disappointed with the Democrats' inability to codify abortion rights during the 50 years that Roe v Wade stood or pass legislation for gun control.
Voters who have
recently benefited financially have a tendency to forgive and forget
misgovernance from the past and vote for their benefactor. Pre-elections
freebies are a legalized form of bribe.
A recent poll of
2,066 voters in key battleground states found that 45% of them would be somewhat or much more
likely to vote if the president were to cancel $10,000 for every federal
borrower.
Now let's examine the
concept and the consequences of loan forgiveness.
When a loan is
forgiven, the amount owed doesn’t melt into thin air. Instead, the
responsibility of paying it off is transferred to another party. In this case,
the taxpayers’ pockets are being picked in the form of taxes.
So what happens when
taxes are raised?
The wealthy reduce
their investments in businesses or transfer their money to countries with a
lesser tax rate. The lower and middle classes either reduce or postpone their
spending. Soon businesses either have to cut costs or shut down. The
result is a fragile economy and high unemployment.
Another consequence of
high taxes is the manufacturers and service providers pass the costs
to their consumers. This results in inflation, which is already at a 40-year
high under Biden Inflation.
What about the
criteria of loan forgiveness?
The Squad will tell
you that education is a fundamental right hence, the government must forgive
student loans.
But why stop at
student loans.
Perhaps the
government can forgive home loans because everyone deserves to live with
dignity. Perhaps this should also apply to credit card debts for food items
because everyone deserves nutrition. How about entertainment. Every human deserves
some form of recreation, perhaps the government can fund Netflix subscriptions
and movie tickets.
Perhaps governments
can forgive loans owed by farmers, as
they do in India because farmers are food providers. Perhaps doctors,
policemen, teachers, scientists, armed force personnel, and firefighters
deserve loan waivers because they provide essential services. Perhaps lawyers,
plumbers, carpenters, and masons also deserve forgiveness of loans because they
offer important services.
The question is where does this stop?
Most importantly, what about individuals' responsibility of spending
within their means?
The case against forgiving loans
weakens considerably when citizens learn of government spending for
the welfare of foreign nations and offering subsidies for certain businesses.
The US has spent
over $54 billion on the defense and welfare of Ukraine. Biden
has pledged
to support Ukraine for ‘as long as it takes.
This week the Senate
is scheduled to vote on a
bill that provides $52 billion in grants and subsidies for
semiconductor manufacturers and offers $45 billion to strengthen their supply
chain for high-tech products.
The citizen has a right to wonder if their government can spend their money on foreign nations and on certain private sectors, why not them.
Also appears on American Thinker
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