Obama’s Top Economist Opposes Biden Debt Relief Plan

An unlikely source argues that it's too big and poorly targeted.

Harvard Kennedy School professor Jason Furman “served eight years as a top economic adviser to President Obama, including serving as the 28th Chairman of the Council of Economic Advisers from August 2013 to January 2017, acting as both President Obama’s chief economist and a member of the cabinet.” Yet, in an interview with The Atlantic‘s Annie Lowrie, argues against President Biden’s order wiping out massive amounts of student loan debt.

Annie Lowrey: Joe Biden has just erased the student-loan debt of roughly 20 million people, and decreased monthly payments by an average of $250 for borrowers who will still have a balance on their loans. You’ve criticized the move, but can you give me your best case for it?

Jason Furman: The college-financing system has a lot of problems. We need to make a lot of reforms to it. Could I see a case for some form of debt relief for lower-income people? Maybe, but with a much lower income limit than the Biden administration has chosen.

Which is pretty much where I am. While I’m skeptical about this particular plan, I think there’s actually a strong argument for more targeted relief.

Lowrey: With that, let’s hear the case against it.

Furman: With any public policy, you need to analyze the trade-offs. You can’t just say, “This person gets this, and therefore it’s good.” It’s always better for someone to get something rather than nothing. But that’s not how it works.

If you’re giving $500 billion to one group, where’s that money coming from? One possibility is that the economy grows much more quickly, and so spending that money doesn’t hurt anyone. I think that’s extremely unlikely, given the highly constrained state we are in. And so I think most of that $500 billion that one group is getting is coming at the expense of everyone else.

That doesn’t make it a bad idea. If we were covering a Medicaid-coverage gap, I’d say, “You know what? If everyone has to pay $50 more and poor people get health insurance and the inflation rate is a tenth of a percentage point higher, I’m all for that.” But we’re giving couples making up to $250,000, which is a lot of money, up to $40,000.

This point, by the way, gets lost in press accounts. The focus has been on the $125,000 individual limit but for married couples it’s actually twice that.

Lowrey: So one concern is that this is not targeted toward people who really need help.

Furman: Then, there’s the expectation that debt relief will happen again. That will lead to shifts in the college-financing system, toward loans and away from grants. It will also raise college tuition, as colleges move to capture some of this spending. Our goal should be getting more people into college. It is not obvious that Biden’s plan helps with that goal. It might even hurt that goal.

He returns to this point later but it’s one often ignored in the debate: since wiping out past loans doesn’t solve the problem of future loans—and, indeed, likely exacerbates it—it’s quite reasonable to expect that there will be pressure for future debt forgiveness, which incentivizes more bad behavior.

Finally, I’m uncomfortable with this level of presidential power. You know, President Trump was being pushed by some of his advisers to index capital-gains tax rates to inflation, and do it by executive order. He ultimately resisted. I think the indexation of capital gains is a much worse policy than this one. And it’s possible the legal grounds were weaker. But he actually said, No. I’m not going to just change tax law by myself without checking with Congress. I think that’s a good rule to live by, and one we’ve mostly had up until now.

I’m rather confident that the courts will strike this order down as unconstitutional. I’m also skeptical that Trump thought himself bound by the Constitution or, indeed, any limits.

Lowrey: This is the Biden administration forgiving debt by keystroke, without raising taxes. So how is the burden of that falling on everyone but the borrowers? Why is that problematic?

Furman: One group is getting $500 billion. And they’re going to spend more. They’re going to buy more housing. They’re going to be better off. The problem is that the economy is already producing the most it possibly can. If anything, the Fed wants it to produce less, not more. What will happen is that they will spend more and it will drive up the price of houses and everything else. Due to that inflation, every household will end up spending $200 more a year on what they need.

There isn’t free money out there. There are consequences. Once you frame it as 320 million people paying for a benefit for 30 million people, it makes you think a lot harder. You’re giving a benefit to someone making $200,000 a year. How important is it to give them relief?

I’m actually rather skeptical that this amount of money—massive though it is—is going to have that much inflationary impact given the size of the overall economy. But I agree that giving debt relief to those doing pretty well in that economy makes little sense.

Lowrey: You said one of your concerns is that universities will increase tuition, with the expectation that there’ll be more debt forgiveness in the future. But there’s an argument that this might actually create more pressure to fix the underlying system of financing.

Furman: We don’t control what universities do. They make their own choices, subject to incentives. The incentive of a diploma mill is to tell people, “Hey, you know what, it’s going to cost $10,000—but don’t worry, Biden’s going to do it again next year.”

Which indirectly gets at another point: one of the reforms that desperately needs to be made but has happened only on the margins is that the government should simply not back loans to degree mills. Indeed, to the extent possible, we should highly discourage any lending institutions for backing those loans.

Lowrey: Let’s go back to the distributional consequences. Surely most people who finish college or a two-year degree set themselves on a higher-earnings trajectory. But a lot of people aren’t finding themselves on an upward trajectory, given the pressure on wages in the past decade. And a lot of young people have concerns about taking on debt, given the rising cost pressures everywhere else in the economy.

Furman: I’d go back to the income limits here. If you’re a 24-year-old who makes $125,000 a year, you’re probably going to be okay in life. Even if what you just said was true, that’s an argument for a different plan, not for this plan. Make the limit $62,500 for a single person and $125,000 for a married couple.

I do think there’s evidence the college premium stopped rising. I haven’t seen any evidence that it has fallen. For the median person who goes to college, they are getting an incredible return on their debt. They’re borrowing $30,000. But their lifetime earnings go up $500,000. You just don’t need to do something for them to get relief to people for whom debt is a problem.

Which is weird way for an economist to look at numbers. After all, the borrowed $30,000 will be a whole lot more in payments—especially if the payment gets deferred a lot in the early years before the increased earnings kick in. Which speaks to another way that I’d have preferred the problem have been addressed: we should refinance the loans to something much closer to the prime rate. And make them dischargeable in bankruptcy in at least some circumstances.

Furman counters a familiar trope here:

Lowrey: What about the Black-white wealth and income dynamics? As you know, Black students are more likely to have loans, and their loans tend to be larger. And Black students are much, much less likely to come from family wealth.

Furman: You also need to understand what this does to the wealth of the people who are ending up paying for it. They are disproportionately going to be Black, because a higher fraction of them have not attended college.

And this is fair as well:

Lowrey: Would something based on the familial wealth of a higher-ed student be better? It would be very hard to do. But you could imagine steering relief toward the kids who did not have parents who could help them with school.

Furman: I’m not sure I agree with that. If somebody at age 30 is graduating from law school and is making $125,000 a year in their first job out there—even if they originally went to college on a Pell Grant—that’s someone who’s in a good position to pay their debt back. I’m worried about the 20 percent of students who are in a bad position. I don’t think you have to worry about the 80 percent.

Absolutely. Indeed, the Biden plan is rather bizarre in this sense: it doubles the relief of those who got Pell Grants, despite those folks having already gotten substantial relief at the outset by getting grants rather than having to borrow. And, really, the parents’ income at the time they started college really has little bearing on their own ability to pay back loans after graduation.

Finally, this gets at a thing that’s been bugging me about the whole conversation:

Lowrey: We haven’t talked about the emotional part of this, the human-welfare part. People hate having student loans. They hate having to pay a second mortgage, even if they know it might be working out for them on paper.

Furman: People hate college debt more than they hate other types of debt. It’s not 100 percent obvious to me why. We’re not talking about forgiving car debt or mortgage debt. I do think shifting to a world with more grants, or an Australian-type system—where they collect the [student-loan payment] on your tax return, and if your income is too low, they just don’t collect it—would be better. You barely have to think about it. That would be a really good system, and it would be great to do something like that.

I will say, of all the policy issues I’ve ever discussed, the level of vitriol directed against anyone who disagrees [with the debt-relief plan] is incredibly high. There is something that is so emotive for people. It has made it harder for analytic people to enter the conversation. And I think the odds of bad unintended consequences, imposed on people paying for the policy now or imposed on students in the future, have gone up a lot.

This works both ways, of course. People are much more vitriolic about student debt relief than they are about other forms of relief.

It’s perfectly reasonable for those who sacrificed, whether by living less lavishly while in college to avoid running up debt or living less lavishly after graduation in order to pay off their loans and avoid racking up additional interest, to resent being forced to bail out their peers who didn’t. But there’s more going on than just that.

Part of it’s classist, with resentment of those who went to college—and particularly those who studied something that wasn’t purely vocational. Part of it’s generational, with older folks like me who worked their way through college debt-free resenting having to bail out younger folks who made poor decisions—while mostly not understanding how much more expensive (in inflation-adjusted dollars) it is to go to college now.

Regardless, it’s not just a partisan thing. Furman is hardly a Trumper trying to own the libs. Indeed, while Elizabeth Warren and Bernie Sanders pushed debt relief hard during the 2020 primaries, most of the other Democratic candidates opposed it. Pete Buttigieg and Amy Klobuchar were especially vocal about the fairness aspect and Biden himself was clearly concerned that those who went to public schools, like him, shouldn’t be bailing out the snotty rich kids who went to the Ivies. It’s interesting, then, that he came so far on the issue since.

FILED UNDER: Economics and Business, Education, US Politics, , , , , , , , , , , , , ,
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Scott F. says:

    Counterpoint from NYT Opinion writer Tressie McMillan Cottom:

    The Student Loan Law Initiative at the University of California, Irvine School of Law and the Higher Education, Race and the Economy Lab analyzed Biden’s executive order. They estimate that around 41 million debt holders will be eligible for some form of student loan forgiveness, and that 25 million of those people will be eligible for up to $20,000 in student loan forgiveness. Twenty million people, including 3.8 million Black borrowers, could have their entire debts canceled.

    That isn’t full debt cancellation, but it will help a lot of people. And the people it will help most are those who got the rawest deal. That includes the millions of people who have debt but no degree — nearly one-third of all borrowers. It also includes people who took on student loans to pay for occupational degrees in blue-collar trades like cosmetology and mechanics. Republicans are criticizing the policy as giving handouts to the rich. They really want to implant the image of a Harvard liberal arts graduate getting a free pass. But cancellation is squarely targeted at the debt that working-class students have accrued to hold pretty working-class jobs. The G.O.P. will have a hard time telling those voters that this relief has not improved their lives.

    Other parts of the policy address underlying problems that created the student loan boondoggle. Millions of people have paid their loans as promised, following the official guidance of student loan servicers, only to owe more than when they started with because of interest. This negative amortization made it nearly impossible for some borrowers to pay off their loans. And documented problems with public student loan forgiveness programs meant that this burden often fell heaviest on people with public interest careers, such as public defenders, teachers and social workers. Now, income-driven repayments for undergraduate loans will be capped at 5 percent of the borrower’s take-home income. If you don’t have a lot of discretionary income, that payment could be low — too low to cover interest on the loan. Previously, this gap added up and increased the total amount owed. Under new guidelines, the government will cover that interest as long as the borrower is making payments. This does not get rid of the scourge of negative amortization for all borrowers. But it does two things: It effectively ends it for public interest workers. That lives up to the promise of public service loan forgiveness, which is that it becomes possible for people to do the work that society desperately needs done without living in eternal debt peonage.

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  2. Michael Reynolds says:

    Every plan elicits the same two reactions: Too Much, and Too Little. The contours of the plan are irrelevant to this dynamic. Whatever decision is made, or not made, it will be either Too Much or Too Little. Goldilocks never says, ‘This is juuust right.”

    If the US government had not repeatedly bailed out the rich the criticisms of this plan might carry more weight. Car makers, bankers, investors, they all get bail-outs. The slippery slope here began with taxpayers giving endless support to our capitalist overlords – in tax breaks and in plain old hand-outs. Student loan forgiveness is the tail of the slippery slope, not the trailhead.

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  3. Stormy Dragon says:

    Well, I’m just shocked that the son of the real estate empire magnate is opposed to student debt relief.

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  4. Stormy Dragon says:

    An unlikely source argues that it’s too big and poorly targeted.

    Also, given that one of the big complaints about the Obama administration is that too many of his finance/econ advisors were drawn from Wall Street circles, is this really that unlikely?

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  5. Jax says:

    I’ve been looking around at the PPP loan program website. Fascinating, really, especially on a local aspect. A lot of the people screaming the loudest around here about student debt relief had no problem taking that free money, and most of it was forgiven, not paid back. In fact, I happen to know that some of them probably fraudulently took that money, because they don’t have employees to pay, and never have. In another instance, a local restaurant that shut down BEFORE Covid took two $75,000 loans….to pay what employees?! The ones that lost their jobs before the lockdowns even happened?!

    https://www.federalpay.org/paycheck-protection-program?fbclid=IwAR3zgF_TuH2JTlqlQlkh3_UCRyIQo70eTd8Hm4hz_AF1DehzvDjCjgBo-9c

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  6. Lounsbury says:

    @Scott F.: One is the opinin of a sociologist which is made essentially in political and social terms. The other an economist’s analysis.

    In any case, it is evident that for the Left the action has become a market of political identity and is ipso facto Good regardless of any cost-benefit analysis so somethat pointless to discuss

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  7. Beth says:

    Ok, I stopped reading this post and I’m not going to read any further comments in it. I’m in public and I almost snapped my phone in half when I got to this (I was pretty irritated by this whole post)

    Furman: I’m not sure I agree with that. If somebody at age 30 is graduating from law school and is making $125,000 a year in their first job out there—even if they originally went to college on a Pell Grant—that’s someone who’s in a good position to pay their debt back.

    I graduated law school when I was 30. Most of my class mates were close to 30 or older when we graduated. About 10-20% never got jobs in the legal field. Less then about 10 made a starting salary of 125k. One of my fiends did. She was a lucky one. She got two raises at a big firm before even starting. Then 08 hit and she got shunted off on to a client. She made out ok, but I’m sure she didn’t work a day at that firm.

    Me on the other hand, with my 140k in debt struggled to get a job. I had connections that were good enough to get me interviews with the City. But I later realized that they all looked so panicked was because they saw that the economy was about to collapse. My first job as a 30 year old lawyer paid me $6 a BILLABLE hour. I worked about 60 hours per week. My first paycheck as a lawyer was less than $50. In 08 I was a lucky one. I worked for that firm and averaged about 44k a year. My loans recapitalized at least 3 times before I could even think about paying them.

    I would gladly drown that economist in a port-a-potty. He can seriously choke to death.

    Dr. Joyner, however, you really seem like a decent, thoughtful guy, but you seem to have this massive blind spot where how you seem to expect that the world operates in some sort of reasonable way that you were told as a child. If you work hard, follow the rules, keep your nose clean, and be responsible, then everything will be orderly and work out.

    It’s seems to me that you can’t comprehend that a whole system was designed to screw people. If I’m not mistaken, we’re both roughly Gen X. You at the beginning and me at the end. I’d be willing to bet that you and I received the exact same middle class lessons and expectations. Work hard, follow the rules, go to school, and then things will work out.

    I was 27 when I started law school. I was going to join the army in what was in reality an elaborate suicide attempt, but I got into law school. I distinctly remember our orientation (remember, my memory is Swiss cheese). In it they had a loan officer step up and give a 5 minute speech about how loans were bad. The dean of the school came up next and gave a half hour speech about how we’re we’re all going to be rich lawyers and life was going to be amazing. We got hosed. By the society that said that if we’re good and worked hard, we’d be ok. By the law school that said we’d be rich. By the government and lenders that said we’d ever be able to pay these loans back.

    I pay 2% on my government backed mortgage on my house that I can discharge in bankruptcy. I pay between 4%-8% in government backed student loans that the lenders will be made while on when I die but are non-dischargeable. I might eventually be able to pay off the initial principle. I will never, ever, ever, be able to pay off all the interest, fees, and nonsense. I did what I was told and got screwed.

    I gets even worse. I defaulted on my private student loans during Covid. I got back on my feet and called them up to see what I could do to clear the default and get back to paying. I’m a lawyer, I work with contracts all day long. They told me there was nothing to be done and I would have to pay the whole thing off to clear the default. I laughed and hung up.

    Two events in my life have told me the socialists are right. The first when I broke my neck and the insurance company that I paid for out of my 44k salary refused to pay for it. The second was that phone call.

    I’ve had some middle class guilt about applying for this program. I make good money now, but these Obama chuds think I’m some sort of queen instead of shackled to this debt. Screw that. Thanks Dr. Joyner, I’m going to apply for it.

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  8. DK says:

    Thoughtful and thought-provoking post, very balanced.

    Part of it’s generational, with older folks like me who worked their way through college debt-free resenting having to bail out younger folks who made poor decisions

    If younger folks bothered to read their Social Security statements, they might resent having to bail out the older folks stealing from the young workers’ Social Security instead of owning the poor decision to vote in bankruptcy via with unfunded wars and tax cuts for the rich.

    Not that we need any more divisive generational warfare, given millennials and Zoomers are rightly furious about their parents’ and grandparents’ votes leaving them with climate disaster, a ticking time bomb unaffordable housing crisis, and resurgent white supremacist extremism.

    @Michael Reynolds:

    Car makers, bankers, investors, they all get bail-outs.

    And farmers, and megachurches, and all the rich businesses and celebrities (and congresscritters) who benefitted from the PPP executive pay slush fund giveaway masquerading as ‘paycheck protection’ for employees.

    If millions in relief to millionaires generated half as much spilled ink as $10,000 in relief to an entry level librarian salaried at $62,000, America might actually stop our slide into third world status.

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  9. Sleeping Dog says:

    Yes, not a solution and may exacerbate the problem, but this is what happens in a scleroic political system where only one party chooses to address issues. The times has a good piece on the subject this morning.

    https://www.nytimes.com/2022/08/27/us/politics/biden-student-loans.html

    Another thing relief is not just going to philosophy and Albanian literature majors, a lot of people that are in blue and pink collar careers are also eligible. Truck drivers, hairdressers, nursing assistants etc, will benefit. So yes the program is too small, too large, not targeted enough and will in all likelihood be struck down by the courts. Far better that Congress would step in and solve the problem, but that can’t/won’t happen.

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  10. Beth says:

    @Michael Reynolds:

    If the US government had not repeatedly bailed out the rich the criticisms of this plan might carry more weight. Car makers, bankers, investors, they all get bail-outs. The slippery slope here began with taxpayers giving endless support to our capitalist overlords – in tax breaks and in plain old hand-outs.

    This. There is tons of money for banks, endless wars, stadiums and every rich bastards wet dream. Nothing for anyone else and we should stop complaining.

    @Lounsbury:

    Screw you.

    I’m out

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  11. steve says:

    Not 100% sure why there is more anger over this (or even sure if there really is) but I suspect it has something to do with the conditions of the loan. It is one of the loans for which you cannot declare bankruptcy. So if you were a rich person, lets randomly choose someone in real estate (LOL), if things went bad you could declare bankruptcy if you were unable to pay off your loans (or just didnt want to pay them off). In fact, you could do this over and over and… well probably at least 6 times. One presumes that the real estate magnate is a lot more knowledgeable about risk than a 19 year old college student.

    The other part is that this smacks so much of the banking crisis. In the banking crisis so many people wanted to blame the people taking out the liars loans and 125% mortgages, but the experts on assessing risk were the lending institutions. By and large they got bailed out and not so much the homeowners. In this case I think it is the schools, not so much the people handing out the loans. The educational institutions should be the experts on whether or not it is likely a student can end up paying back the loan. So the individual schools have accepted students, and their loan money, knowing in some cases that high percentages of their students default, unable to get jobs or jobs that pay well enough to pay back loans. Or schools offer a specific major that has a high default rate. If we keep making the students whole and the schools dont pay a penalty they have no incentive to change.

    Steve

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  12. DK says:

    @Beth:

    My first job as a 30 year old lawyer paid me $6 a BILLABLE hour. I worked about 60 hours per week. My first paycheck as a lawyer was less than $50. In 08 I was a lucky one. I worked for that firm and averaged about 44k a year. My loans recapitalized at least 3 times before I could even think about paying them.

    Explains so well the “vitriol” coming towards wealthy Harvard professors and rich Washington Post columnists who barely spoke two angry words Trump’s billions in bribes to farmers, but who now can’t shut up about student debt relief.

    All too often their commentary ends up showing have little clue about who young college grads are, about the job market they face, or about how two major one-a-century recessions a decade apart have flattened the distinction between working and middle class.

    They still believe the canard the system fed millennials and xllenials were: take this “financial aid” (lol), get that degree, and you’ll get a good job and make a lot of money.

    Well, we found out was feel-good American Dream marketing bunk. But why do folks like Megan McArdle and Jason Furman still not know this?

    Oh, wait: they both grew up in New York City as kids of real estate money (i.e. grew up rich), went to elite private schools, then went to Penn and Harvard respectively. Quelle surprise.

    The “vitriol” Furman references is unfortunate, but it’s not just about opposition. It’s about opposition colored by clueless privilege and the hallmarks of being hopelessly out of touch.

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  13. Scott F. says:

    @Lounsbury:

    One is the opinin of a sociologist which is made essentially in political and social terms. The other an economist’s analysis.

    The other is an economist’s opinion of the political and social terms, if you want be precise.

    And your confirmation bias has you aligned with the economist’s opinion of the political and socials terms, because his opinion supports your thesis that the Left is always so wrong on the politics that it’s pointless to discuss anymore. So pointless to discuss, in fact, that you never miss an opportunity to comment here about the undeniable truth of your thesis.

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  14. DK says:

    @Lounsbury: This action that lifts at least half a million young African-Americans from balance sheet poverty into the black, and it eliminates the debt of half of Latino borrowers. Since a (far) greater proportion of black borrowers have Pell Grants compared to white borrowers, Biden’s doubling of relief for Pell Grant recipients means he deliberately targeted for extra help a demographic made less wealthy by decades of systemic racism.

    For the Right, this is all ipso facto bad, as conservatives cannot possibly support any largesse that doesn’t benefit white people only.

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  15. Skookum says:

    Anyone who posts on this subject, in my view, should explain how they paid for their education to be honest about their bias. Parent’s help, work, loans, grants, military or other government-funded educational programs?

    1. Worked during college, loans, one $1000 grant, and one-the job training programs paid for by my employer. Parents helped during first of college, and I was self-sufficient from then on. Highest degree is a Master’s. Paid off my last educational loan when I was in my 40s. I might add that I did not marry until later in life, and did not have children because I could not afford to while working as a single professional. That’s probably the biggest price I paid for my education.

    2. One of our most significant security risks is not being able to innovate and remain competitive because of an insufficiently educated workforce.

    3. Many of the people who are doing significant work to protect our planet (another vital security issue) or address social issues have advanced degrees and are paid a pittance by the government and non-profit employers.

    4. We have legislators who refuse to take action on many pressing issues–such as seriously reforming the student loan system.

    5. Colleges have incentives that do not prioritize lowering students costs–another issue needing legislative attention.

    6. I strongly believe in supporting students who do not want four-year degrees, but regardless of what careers people choose, lifelong learning to avoid become irrelevant as AI and technology or the types of skills needed by employers evolve is now essential for all workers. Funding education will always be an issue.

    7. I fully support President Biden’s effort to keep his campaign promise reduce the burden of educational debt for those who entered the workforce after the Great Recession, have to survive in a gig economy, and are being left a world that is a mess because difficult problems have been treated like cans kicked down the road while legislators use politics to become rich.

    8. I believe capitalism is the best economic system, but unfettered capitalism is as bad as unfettered communism or socialism. Right now the imbalance of wealth in our society is a powder keg waiting to explode, leading to populism and vicious cycles of poverty which prevent upward mobility into a healthy middle class.

    10. Yes, President Biden’s plan will help those who probably don’t need help or are undeserving in the eyes of some, but must we always denigrate policies that help those in need because, to be fair, those are not in need will also benefit?

    11. Lastly, I have to laugh at Tom Nichols–the person who warned us about the death of expertise–as he lambasts President Biden’s modest attempt to alleviate the burden of student debt for those who sought education.

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  16. wr says:

    @Beth: ” About 10-20% never got jobs in the legal field. Less then about 10 made a starting salary of 125k.”

    Yes, but all the lawyers Jason Furman knows skipped right from Harvard Law to white shoe firms and started pulling down 125K immediately, so clearly this is true about everyone.

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  17. wr says:

    @DK: “But why do folks like Megan McArdle and Jason Furman still not know this?”

    In the words of Upton Sinclair, it is difficult to convince a man of something when his salary depends on his not understanding it.

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  18. Lounsbury says:

    @Scott F.: The economist was discussing rather different analytical factors than the sociologist.

    Having seen the other thread, it is the simple observation that the Democrats Left has already a fixed conclusion on this subject and analytical analysis is utterly besides the point now, it is now a poitn of political identity that this is a Good Thing not subject to cost-benefit analysis.

    The entirity of this comment thread is going to be about political identity rooted arguments and generally non-analytical and rather ironic “what-about the Rich X, Y or Z”

    @Beth: Your habitual Drama Llamaism is rather predictable.

    Illustration of non-analytical identarian flag flying @DK: “This action that lifts at least half a million young African-Americans from balance sheet poverty into the black, and it eliminates the debt of half of Latino borrowers.” The ethno-racial identity of the beneficiaries is touching (and rather illustrative of the discourse that is ensuring evidently the long bleed out of a key dominant demographic for achieving something more than razor thin majorities). It is also appeal to emotion rather than actual benefit analysis as the action rather disproportionately benefits a minority percentage (as a sub-class) of the ethno-racial identity groups… I suppose the non-youth, non-post 2ndary education going majority percentage shall now feel warmer and fuzzier. Bizzare emotional positioning, referencing priviledge for an action overweighted to comparative priviledged sub-sub-group. But such is Populism in operation, with such delicious incoherency.

    @Stormy Dragon: Clearly you need to liquidate the Kulaks as well as the Sons of the Kulaks for the sins of their parents, their blood sin being fundamental.

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  19. Skookum says:

    @James Joyner

    @Lounsbury

    @Beth: Your habitual Drama Llamaism is rather predictable.

    Is overt sexism allowed on this blog? Or may I call Lounsbury what comes to my mind?

    Drama Llama
    drama llama (plural drama llamas) (slang) A histrionic person.

    drama llama – Wiktionary
    https://en.wiktionary.org › wiki › drama_llama

    2
  20. Just nutha ignint cracker says:

    Explains so well the “vitriol” coming towards wealthy Harvard professors and rich Washington Post columnists who barely spoke two angry words Trump’s billions in bribes to farmersagribusiness, but who now can’t shut up about student debt relief.

    FTFY.

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  21. Stormy Dragon says:

    @Lounsbury:

    Yes, because student loan relief is exactly like the Holodomor.

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  22. DK says:

    @Lounsbury:

    The ethno-racial identity of the beneficiaries is touching (and rather illustrative of the discourse that is ensuring evidently the long bleed out of a key dominant demographic for achieving something more than razor thin majorities).

    Razor-thin majorities are preferable to being so despised by youth voters the right is teetering on permanent minority status, having lost the White House, Senate, House, Arizona and Georgia in only four years — followed by running statewide candidates so toxic, bigoted, and extreme Democrats are primed to run the Senate table in a Red Wave year (lol).

    That’s happening because the long bleed out is actually educated whites and young whites fleeing conservatism, joining the supermajority of minority groups who already despise the right. This does not bode well for the GQP’s future, or did you miss Democrats winning a New York swing district House special election lady week?

    The pollsters missed it too.

    It is also appeal to emotion rather than actual benefit analysis as the action rather disproportionately benefits a minority percentage (as a sub-class) of the ethno-racial identity groups…

    1) Emotion is good. It’s a sign of empathy. If Republicans had any left, they might not be losing.
    2) Racial wealth gaps caused by generations of systemic discrimination are as real as privilege, Republican dishonesty and denial notwithstanding. So pointing out how Biden’s student debt relief targets this gap is absolutely part and parcel of any thoughtful cost-benefit analysis.

    Bizzare emotional positioning, referencing priviledge for an action overweighted to comparative priviledged sub-sub-group. But such is Populism in operation, with such delicious incoherency.

    Quoted for bizarre, incoherent, overly-emotional gobbledygook posturing as sober reaction.

    8
  23. Lounsbury says:

    @Stormy Dragon: entertaining misunderstanding.

    First, of course the anti-Kulaks actions =/= the Ukrainain forced famine, Kulak and Sons of Kulak purges (in the plural) was all SovUnion and not merely the Ukraine. And indeed quite creatively applied, one could by all kinds of analogical connection quite become the Kulak, even if you were a Central Asian person.

    But this historical ignorance (or deliberate misrepresentation, one or the other) aside, the ideological ad hominem attack on the fellow because of his parents Class Background is spot on to the Kulaks. As of course his ideologically suspect parentage and learning should be purged, particularly should be make analytical arguments that undercut Party Thought. (Of course I am exagerating for the entertainment of it, but the underlying ideological reaction and familial ad hominem, that’s common roots).

    @Skookum: Sexism, really? Good god, another drama llama. Dear Drama Llama, I am sure you can call me whatever you like, but to be entertaining try to be creative and not boring.

    3
  24. Lounsbury says:

    @DK: Ah the new version of the permanent majority tale. Now it’s youth.

    2
  25. JKB says:

    Whichever way it goes, this college loan “bailout” is going to provoke real discussion on the value of “going to college”. It’s a bad time for colleges that this happens now. The “college experience” is increasingly dystopian with cancel culture, sexual tribunals, etc. Whether those are good or bad, they certainly cut in to the bacchanal reputation of going to college.

    And colleges have not adapted to the new world where what you know is less important being able to use knowledge from the repository. Problem is, college/universities change so slowly. It might take 40 years to get all the faculty on board. In the meantime, many might go around college except when there is a gatekeeping degree requirement for their desired field.

    Here’s a good observation by an econ prof:

    But, I want to go to the other end of the spectrum, which is intellectual services. It used to be, if you wave your Bachelor’s degree, you’re going to get a great job. When I graduated from college, it was a sure thing that you’d get a great job. And, in college, you’d basically learned artificial intelligence, meaning, you carried out the instructions that the faculty member gave you. You memorized the lectures, and you were tested on your memory in the exams. That’s what a computer does. It basically memorizes what you tell it to do.

    But now, with a computer doing all those mundane, repetitive intellectual tasks, if you’re expecting to do well in the job market, you have to bring, you have to have real education. Real education means to solve problems that the faculty who teach don’t really know how to solve.

    And that takes talent as well as education.

    So, my view is we’ve got to change education from a kind of a big Xerox machine where the lectures are memorized and then tested, into one which is more experienced-based to prepare a workforce for the reality of the 20th century. You’ve got to recognize that just because you had an experience with, say, issues in accounting, doesn’t mean that you have the ability to innovate and take care of customers who have problems that cannot be coded.

    –Econtalk podcast with economist Ed Leamer, April 13, 2020

    Colleges in the last 50 years have benefited from the habit of even those who were going to be successful regardless thinking college was necessary. But now the knowledge is out there. Access to disciplined thinkers is easier than doing the professor roulette on campus. Can colleges survive on “we own the labs the vo-tech majors need” or will alternatives appear to that as well?

    Those who insist on knowing have alternatives. College may become the refuge for the rest.

    Real education must ultimately be limited to men who insist on knowing, the rest is mere sheep-herding.
    Ezra Pound

    1
  26. wr says:

    @Lounsbury: “(Of course I am exagerating for the entertainment of it,”

    I do hope it’s yourself you think you’re entertaining, or you are simply one of the least self-aware people on the internet.

    4
  27. Michael Reynolds says:

    @JKB:
    I do love that you end with a snippet from a Nazi poet.

    That aside, I’m sorry, but it was never the case that a BA automatically guaranteed a good job. In 1980-82 I worked at Middleton Tavern in Annapolis where I was literally the only waiter without a college degree. My favorite bus girl was a senior at St. Johns. My wife, BA University of Texas, was moving cocktails at Armadillo’s, two doors down. My people were not running around schlepping trays for tips because they’d just been offered a great gig.

    On the larger point I’ve argued for decades that the college-for-all cure was obviously false and would always be false. College is an experience not suited to everyone, including yours truly. An astonishing number of ‘creatives’ to use that unpleasant word, were high school and/or college graduates. I managed to drop out of both. A partial list just of authors includes Ray Bradbury, Maya Angelou, Mark Fucking Twain, and Faulkner, Dickens and Kerouac who each achieved Cher-level single name status. Also Jack London. You’d like him. He was a Nazi before Nazis were Nazis.

    Even in STEM college has its limit. My eldest daughter who I had to bribe to finish high school and who then dropped out of college (Apple? Tree?) now works for me where among her tasks she’s overseeing a web project being handled by professionals in the field. They fear her.

    That said, we do still need an educated populace, preferably even better-educated than the current crop who are, quite clearly, rather better-educated than we were in the halcyon Boomer Days. The country’s problems come down in very large part to a superstition-ridden, narrow, angry, brittle demographic of which I believe you are a part: the Dunning Kruger brigade of fragile Boomer White men and unhinged White women.

    Maybe a remedial citizenship course?

    3
  28. wr says:

    @JKB: “Those who insist on knowing have alternatives.”

    Why can’t you just be proud of achieving that GED instead of spending so much mental energy hating everyone with a better education than you?

    And if you’re so bothered by your level of education, why don’t you try reading a book written within in the last century?

    2
  29. Scott F. says:

    @DK:

    Quoted for bizarre, incoherent, overly-emotional gobbledygook posturing as sober reaction.

    Sober reaction posturing that is epically myopic when it comes to the commenter’s own political identity. I used to get tweaked by Lounsbury‘s ponderous sanctimonious, but lately I’ve shifted to being bored by his utter predictability.

    6
  30. Andy says:

    There is definitely, at least IMO, a lot more heat than light on this topic. It might be useful to break some of the factors down a bit more to focus on the various issues.

    So I would break this down into three basic parts:

    1. First is the process, and the authority used to make this decision. This is a separate question from the policy itself. In this case, the President’s decision was a unilateral one using an obscure provision in a 9/11 law. More on that later.

    2. The immediate effects of this policy. Debate on this revolves around who gets the benefit vs. who doesn’t, and various viewpoints about whether that is fair or justified or not. At this point, I don’t believe there is much use debating these points as there is little objectivity since views on this are formed by values, experiences, and highly subjective notions of what is or isn’t fair. On this I think it’s best to just agree to disagree.

    3. The long-term effects of this policy. Here the debate is less prone to the vagarities of subjective values, but it is more speculative since we’re talking about the future.

    Now, to lay out my cards here, I am, and have been, mostly concerned with #1 and #3. I would not have made the choices Biden did with #2, but I think most views on #2 are completely legitimate on either side. People have every right to think that the policy is fair and justified or unfair and unjustified.

    In my view, #1 and #3 are the biggest problems with this policy. And these are also the problems that, at least in my experience so far, advocates for the policy don’t want to talk about. And I think the reason is that there are a lot of problems here that can’t be avoided.

    First on the process – or lack of it. It’s one thing if the legislature passes a bill that’s signed by the President. It’s quite another to reallocate hundreds of billions of dollars by Executive fiat. And it’s even more problematic, in my view, that the purported authority for this is based on the dubious use of a 9/11 law and declaration that this action is intended to deal with a “covid emergency” that the Administration has been arguing isn’t an emergency for several months now.

    I have yet to see it, but I would really like to see how this policy’s proponents defend it. Committing the US Federal Government to outlay hundreds of billions of dollars with zero input from Congress seems like a pretty big stretch to me. I’m not aware of any other instance where a President has done something like this via Executive authority. Whatever one thinks of them on the merits, historical bailouts at least had the legislature’s imprimatur.

    #3 is the other massive problem with this policy in view. To begin with, it doesn’t change any of the systemic problems with higher education funding and financing. And, as many have pointed out, it will likely worsen those problems in the future. The perverse incentives are pretty clear, what is unclear is how and to what extent they will manifest. This is also true of the new rules the DOE is planning to make regarding payment terms and limitations, which will have significant downstream effects. Matt Bruenig’s piece here goes over one aspect of that which hasn’t been talked about enough IMO.

    And this highlights the importance of making big changes via the normal legislative process (using regular order) because you have various stakeholders that give input and point out potential flaws, especially those that are likely to manifest in the future. That doesn’t happen when the policy is made largely in secret in the White House and then presented as a fait accompli.

    2
  31. DK says:

    @Lounsbury:

    Ah the new version of the permanent majority tale. Now it’s youth.

    The youth and the semi-fascism, the forced birth extremism, the Trumpism, the white supremacy, the insurrection, the homophobia, the xenophobia, the QAnon, the sore loser election lies, the protecting groomers like Matt Gatez, the climate change denial, the smearing teachers, the antivaxxing, the gun nuttery, the hypocrisy, the vote suppression, the relentless dissemblimg, the Putin apologetics, the hemorrhaging college-educated voters, the bats**t crazy statewide candidates, etc.

    And pray tell, what version of Inevitable Red Wave 2022 are y’all on now? It was down to Red Ripple last week, on to Red Droplet yet?

    4
  32. Ken_L says:

    The problem is that the economy is already producing the most it possibly can. If anything, the Fed wants it to produce less, not more. What will happen is that they will spend more and it will drive up the price of houses and everything else.

    I’ve read several other people making this argument. It’s wrong. It ignores the fact that loan repayments have been suspended since early 2020. Come January, two things will happen: many Americans will have less debt, and all those with student debt will recommence paying it off. The latter means they will spend less, thus lessening inflationary pressure.

    1
  33. James Joyner says:

    @Jax: PPP and most of the other COVID relief programs were rife with abuse. I supported the early ones on the grounds that government ordered businesses shut down for the public good and should have therefore made them whole. But there was a ton of abuse.

    @Beth: But Furman thinks the program should have been targeted to people who aren’t making a lot of money, not that it shouldn’t exist. He realizes that not everyone comes out of law school making $125,000. He just doesn’t think those who do should get a free $10,000 from the taxpayer.

    @Skookum: Getting paid to take a public service job is a very different thing than getting bailed out of a loan.

    @JKB: You really know nothing about college, do you?

    @Andy: Because the legislative process is all but broken, we’ve normalized Presidents simply taking extraordinary action by fiat. I don’t like it one bit but I get it.

    1
  34. Andy says:

    @James Joyner:

    @Andy: Because the legislative process is all but broken, we’ve normalized Presidents simply taking extraordinary action by fiat. I don’t like it one bit but I get it.

    I don’t buy the ends-justify-the-means argument, particularly when reforming education financing wasn’t even attempted and that Biden’s plan likely wouldn’t have passed even without the filibuster.

  35. @JKB:

    The “college experience” is increasingly dystopian with cancel culture, sexual tribunals, etc.

    You really need to get your info from better sources.

  36. Lounsbury says:

    @DK: I am not on any version of inevitable wave of any kind. Quite the contrary (as comments made re selling well the climate bill win rather indicated), although it is so very predictable that you lot collapse any note critical skepticism of your latest tale of demographic truimph into some odd straw man about the opposite of your tale being inevitable.

    Rather simply noting the non analytical cherry picking of the same fashion as the last round of identity-demographic win play.