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Government relief of US college debt...

Have we reached the point predicted two hundred years ago where Congress has figured out how to bribe the American people with the people's own money??

We raise taxes (the people's money) and use it to subsidize everything from cheap oil and computer chips to bankrupt banks and auto makers. We use it to provide economic stimulus payments in down times and now to pay off student debts.

I know I've posted in the past about my support for access to abortion services and my support of marriage equality and transgender acceptance so many of you might consider me to be quite liberal across the board. And it's true that I support many liberal/progressive issues. But when it comes to economics and individual responsibility I tend to the fairly extreme right side of politics.

I don't support government subsidies. Period.

I think oil companies should pay fair market value for the land they drill on.
I think coal companies should pay the full life cycle cost of their ore.
I think solar electric should also should pay its full life cycle costs.
Same with wind.

If your car company can't make a profit, then maybe the guy who buys your factory from the bankruptcy court can.

If your bank is too big to fail, then take better care of it. Don't come to me with your hands out when you screw up.

And, if you borrow money to buy a home or get an education, then have a plan to pay it back.

It's called capitalism and, until it is replaced by something else, it is the system we have in place.

Let me tell you a story about one of my cousins. He's a couple years younger than I am. He's really a second cousin or maybe third, I'm not quite sure how all that works. In any case, he came to me when I was in my second year at university because he wanted to go to college and it wasn't looking possible for him. So we talked about it.

He wanted to go for the traditional four year bachelor's degree. He was really into theater arts and stage lighting and audio production. I asked him a simply question ... In that world would a bachelor's degree impact his income? In other words, how many years would it take for the increased income take to pay off the cost of a four year degree? A simple "return on investment" conversation (and no, I wasn't a business major).

He looked into it. What he found was stunning to us both. In that world, people with a degree and people without a degree made essentially the same money. It was crazy. He decided to take the savings he was able to blow on a first semester and instead bought some equipment. If I remember right, it was a trailer to cart stuff around and a bunch of lights and cables and speakers and some kind of board to control audio ... and he started going around to various venues and bars and clubs and offered to run events for them. He was 18.

My grandfather provided a lot of really good business advice and today he is 26 and has three crews running around Boston doing corporate events during the day and evening events at bars and clubs. No degree, no debt.

My point in bringing him up in this conversation about education debt is because he did assess (at my urging) what the debt of a four year degree would end up costing him and whether the benefit of that degree would support that debt. In his field it would not.

For other's the calculation may be different, but it is a basic calculation that anyone taking on any kind of debt (education, real estate, car, etc) should and could run. This is not advanced calculus.

So when I hear that people are strapped with huge debt and can't make their payments, I do feel bad. But I think it is fair to ask how they got into that situation and whether it is due to matters beyond their control or not.
- Took on loans and then got sick and couldn't finish school? Okay, legit issue and maybe some relief should be offered.
- Took on loans without thinking of payback and now don't make enough to support the debt? We have a process to handle this already in place. It is called bankruptcy. It comes with consequences, but it works and is fair to borrower and lender.

Am I too harsh here? Are we responsible for our decisions?

Edit: I became aware through the comments below and some personal research that student debt cannot be eliminated through bankruptcy. This is crazy. The concept of bankruptcy is critical to the smooth functioning of a capitalist economy. If someone truly took on too much debt through poor planning, then bankruptcy should be available to them and the federal guaranty would kick in and make the lender whole.

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ShadowSister · 51-55, F

@sarabee1995 I'm with @Scribbles on this. Her reply elsewhere was excellent.

I agree with you in principle. It is not right to "bribe the public with the public's money." But no one is being offered a bribe. We're giving help to people who need it. Just like we bailed out the banks after the great recession of 2008. Is it ideal? No, it's not. But the situation we are in requires us to do something, because the alternative is worse.

Usually it is people from my generation complaining about how "kids these days have it so much easier than we did." But the reality is that the costs for a degree are radically different than they were when I got my undergrad.

In a perfect world, we would be offering students more help up front through grants or reduced tuition costs. But we do NOT live in a perfect world. College matters. I will never judge someone who didn't go to college, but I believe education is worth it at any price. College causes you to grow in ways you never would without it. And it's not fair to saddle young people with a debt they will be paying for the rest of their lives.

So I agree, it's less-than-ideal. But it's necessary. Therefore I support it.

sarabee1995 · 26-30, F

@ShadowSister

But no one is being offered a bribe.

President Biden campaigned on forgiving education debt. He literally offered money to young adults with education debt in exchange for their votes. That's bribery.

Just like we bailed out the banks after the great recession of 2008.

Exactly.

the alternative is worse.

This is where we disagree.

In a perfect world, we would be offering students more help up front through grants or reduced tuition costs.

Again, we disagree. In a perfect world the cost of education wouldn't be driven up by government subsidies and universities would be forced to offer more affordable solutions to keep their seats full. And likely their lawns wouldn't be as green.

And it's not fair to saddle young people with a debt they will be paying for the rest of their lives.

One this we agree. It's the solution on which we disagree.

ShadowSister · 51-55, F

@sarabee1995 Politicians make campaign promises and we chose who to vote for. That's how it works. If they agree to put money towards schools, is THAT a bribe? What about spending for the military, or for Medicare? What about infrastructure? I wouldn't call any of those "bribes." Certainly not in the traditional sense.

Most of the time politicians never even follow through on their campaign promises.

In 2008, a shattered economy would have been worse for everyone. Are you arguing that we shouldn't have given the bailouts, leaving ALL of us to suffer? I don't.

In a perfect world the cost of education wouldn't be driven up by government subsidies and universities would be forced to offer more affordable solutions to keep their seats full. And likely their lawns wouldn't be as green.

Like what? Lower standards for teachers so we don't have to pay them as much? Bigger workloads for overworked professors? Do you really think the cost of education is so high because of "lawn care?"

I doubt the answer is either obvious or easily solved.

My support for student loan forgiveness is actually very similar to the reason I voted for Biden. When presented with only bad options, the least of all evils is, by definition, the best answer.

What's your alternative answer? Close our eyes and pretend there's no problem? Thanks but no thanks.

ShadowSister · 51-55, F

@sarabee1995 I'm curious, have you read any Ayn Rand? If so, how do you feel about her?

sarabee1995 · 26-30, F

@ShadowSister Interesting that you mention Ayn Rand. The only thing I've read of hers is, of course, Atlas Shrugged.

So I assume this means you have me pegged as a laissez-faire capitalist? You wouldn't be far off in that accusation.

When I post these things, please know that I am advocating for idealistic positions. And I recognize that you are choosing the least of all evils.

Imagine how much less expensive life would be for all of us if there was no such thing as a tax deduction or exemption? And no business every got to feed at the public trough?

I'll comment more on the rest of the above tomorrow. 🙂

ShadowSister · 51-55, F

@sarabee1995 That's all I've ever read from her either. I thought it was a good book, and I disagreed with her philosophy. It helped me understand her position. For someone who is familiar with her, I find she makes a good measuring stick to see where you agree or disagree with her.

And I think you've made a fair assessment of the difference between our ideals, as well as where I differ from Rand. Reality rarely lines up with idealistic values.

Edit: actually, as I read through the various comments, I realize I bring up Rand because she is my starting place in these discussions. I honestly have not given a lot of thought to broad economic policies because my background with biblical formation taught me to approach these systems through different lenses. So when I do visit these issues, she has been my main conversation partner. Understanding where you stand in reference to her can help me understand which pieces I may or may not agree with you about, and why.

room101 · 51-55, M

@ShadowSister I have read both The Fountainhead and Atlas Shrugged. I enjoyed both immensely, especially Fountainhead. At first glance, I find myself agreeing with much of what she says. The ideals of being true to oneself and of personal integrity are ideals that I have supported and tried to live by for as long as I can remember. However, one only has to drill down just a little bit deeper to find that her philosophy is more about "I've got mine, so go get yours" than it is about any form of personal integrity etc. I was going to phrase that rather differently but didn't want to lower the tone by swearing😉

Like you, I tend to use Rand as a sort of barometer. I tend to not have a great deal in common with people who adopt Rand's philosophy unquestioningly.

sarabee1995 · 26-30, F

@ShadowSister

That's how it works. If they agree to put money towards schools, is THAT a bribe? What about spending for the military, or for Medicare? What about infrastructure? I wouldn't call any of those "bribes." Certainly not in the traditional sense.

Yes, these are almost all bribes. As are subsidies for oil leases and bailouts of banks and car companies and tax deductions for solar panels ... all of it is EXACTLY what de Tocqueville was talking about.

Our Federal Government has a very specific and very limited mandate. It was granted, in its formation, very intentionally limited powers. We are operating today so far outside that original mandate that we approach absurdity in the chasm between the Constitutional definition of the Federal government and the reality of it.

States, in the Constitution, are granted far more leeway in determining their internal culture and laws and economic climate, but the Federal Government is very purposely limited in scope and power.

Imagine a world where the first $XXX of income was federally tax-free and every single penny of income over that was taxed at the same rate. No mortgage deductions, no marriage deduction, no child tax credit, no education deduction, no solar equipment deduction ... none of it. Let's say that initial tax-free amount was something like $50-75k. Big. And tax-free. Then one bracket with no deductions or accounting tricks on every penny over that amount. Something like 10-12% would bring in more revenue than we see today and no billionaires would be paying 1% of net income.

Let's forget for a moment how we get from where we are today to that world and instead imagine that world: EVERYTHING you buy would be less expensive. There would, admittedly, be far fewer accountants and tax lawyers, but the cost of doing business for just about every business would be less.

room101 · 51-55, M

@sarabee1995

"Imagine a world where the first $XXX of income was federally tax-free and every single penny of income over that was taxed at the same rate."

You mean a world like the UK where there is no Fed and State tax. Where everybody gets the first £12,570 of their gross earning tax free. Where earnings between £12,571 and £37,700 are taxed at 20% and further earnings between £37,701 and £150,000 are taxed at 40%. Where the maximum rate of income tax applies to earnings above £150,001 and is at 45%.

Is that what you mean?
Is it close to what you mean?

sarabee1995 · 26-30, F

@room101 No, actually, that is not at all what I mean.

First, you don't have separate sovereign states under the crown, so of course you don't have separate federal and state taxes. That's a silly statement to even make.

Where everybody gets the first £12,570 of their gross earning tax free

We currently get something like this today. I'm not sure the exact amount, but I believe it is higher.

earnings between £12,571 and £37,700 are taxed at 20% and further earnings between £37,701 and £150,000 are taxed at 40%.

Are there any deductions, exemptions, or credits applied to income before determining the income bracket?? This is the biggest problem in our tax code today. It is used as a vehicle to subsidize everything from home ownership to solar rooftop electric generation. I advocate ZERO deductions, exemptions, credits, etc.

Is it close to what you mean?

No, not remotely close. Your current system sounds much closer to our current system.

room101 · 51-55, M

@sarabee1995 It's not "under the Crown" Sara. It's under the UK's Parliamentary system. Remember, the UK does not have a federal system of governance.

No deductions per se. If an employee receives "benefits in kind" eg private health insurance, private gym membership, the private use of a work phone, a company car which is a non-commercial vehicle (ie not a van etc) and can be used for social, domestic and pleasure purposes........basically, anything that one would need to earn money to pay for out of ones own pocket..........all of these items have a "benefit" rate applied to them which is used to reduce the employees tax free base amount.

There are no credits as such. However, employees can claim for child care costs (within very specific parameters); I think it was in 2015/6 (can't remember exactly) employers were required to provide a "work place pension" for all employees. Both employers and employees pay into an accredited pension scheme. These items (and others) are used to reduce ones tax liability at source ie on ones monthly (or weekly) payslip.

As with many European countries, the UK uses a PAYE (Pay As You Earn) system. This means that the vast majority of the population is not required to provide annual tax returns. Which ticks your box vis-a-vis fewer accountants etc.

If the UK system is close to the US system, can you please flesh out your idea a little bit.

room101 · 51-55, M

@sarabee1995 Also, the UK has no deductions for mortgages etc. You want to buy a house or an apartment? Down to you to pay for it from your net earnings.

Local and national grants are available for sustainable energy sources (solar panels etc). However, a home owner will typically find a supplier and if the item meets with the grant parameters, the grant is either paid direct to the supplier or to the homeowner. The intention is to encourage people to utilise "green" sources of energy. It has nothing to do with taxation as such. Although, come to think of it, some of these items may attract lower rates of Value Added Tax (ie sales tax). Not sure about that but, again, it's an incentivising method to go "green"🤷‍♂️

sarabee1995 · 26-30, F

@room101 Okay, so with your additional details I would say your system is halfway to where I would go as Sovereign. ;)

I both love and hate the pay-as-your-earn scheme. On the one hand it greatly simplifies life and that is good. On the flip side, it lowers the "perception" of how much tax you are paying and makes it easier for the government to tax more without too many complaints from the People.

In my world, I would eliminate all government meddling in the marketplace. Here in the US, the petro-chemical industry ("big oil") is hugely subsidized by the government. As is the renewable energy sector. I would eliminate all subsidies at the federal level to both. And to all private industry.

Research grants to universities are about as far as I would go in terms of "encouraging" adoption of new tech. A business is either viable or it is not. If it is not, then that is not my problem.

sarabee1995 · 26-30, F

@room101 Btw, I used the phrase meddling in the marketplace because here we do it through the tax code and the annual tax filing process and evidently you guys do it differently. At the end, it is the same thing.

And yes, I know you have a Parliament and that it would not tolerate meddling from the Crown. But the fact remains that on paper, Parliament's power and authority is granted to it by the reigning monarch who derives her power and authority from God above. I'm not a fan of such systems as you know.

ShadowSister · 51-55, F

@sarabee1995 So how does schooling work under your system? After all, that's what this is all about. You said you are not going to cut funding for public schools. Except that I don't see how that fits with the rest of your logic. Either it's the government's place to provide things like schooling or it's not. If it is, then the discussion is about if and how university fits into that. If it's not... well quite frankly, I don't want to live in your world because denying kids a basic education would seem to perpetuate poverty.

I feel like the reality of your system entails all sorts of consequences that would be extremely hard for any of us to swallow. And for what? For purity of adhering to a philosophy of the role of government?

Let's say that hypothetically there was a way for the federal government to spend X to increase the economy, and by doing so, the economy as a whole would gain X + Y. Under your system, even though doing so would objectively promote the greater good, you would not do so as a matter of principle. Have I understood you correctly? I don't want to misrepresent your view.

sarabee1995 · 26-30, F

@ShadowSister I've not been entirely consistent, have I ?? It's like I have these different sides of me that constantly tug at my opinions. I absolutely lean heavily libertarian; you know this. But I also have a great deal of compassion for people and want to support them.

I just hate surprise bailouts. Of anyone for anything. Most especially private businesses, but really anyone so that includes over-extended students.

So, if I could waive a magic wand and install myself as Sovereign over all and magically transform society (without having to go through the pain of transition that I know my philosophies would impose on our current world), then the world would look like this:

- All would have protected, unalienable, inviolate, natural rights protected by all governments around the world.

- In addition, but separate from the concept of "rights" above, all societies would provide basic education and basic healthcare and other basic services as they could afford. In the case of the US, obviously we can afford a lot. Pre-K thru 12 is I think where most states are now (at least where Massachusetts is now). Some states add varying levels of college to that through their state college systems. Someone else here advocated for adding a two year associates degree to the basic K-12 public education. I'm not opposed to that if that is what society wants and can afford.

- I do believe that the best government is the most local government so these things would be managed at the state level. As Sovereign at the federal level, I might issue some edicts ("mandates") but I would leave it to the local governments to administer the programs. Yes, this means the Department of Education and many other federal departments would likely be disassembled and divided among the states (NOT eliminated). The services still provided under Sovereign edict, but administered locally.

- Taxes at the federal level would go down dramatically, but would likely rise at the state level. So much money is simply "filtered" through Washington. A dollar is collected and is used to pay for 40 cents of services. Where did the sixty cents go? Caught up in the filter. Not efficient. Maybe Congress should pass the tax with it's authority, but have it paid to the states without washing through Washington's hands???

Essentially, I see the federal government as that entity that is our face to the rest of the world and the coordinator of our defense from foreign enemies, but with very little direct control over the culture and society of the individual states.

I love being from Massachusetts. I don't want to live in Texas or California. And I also don't want to make them into New Massachusetts. Live and let live. And, of course, American citizens would be free to live in the State of their choosing with the culture that best matches their philosophy.

MommyLucy · 36-40, F

@sarabee1995 I live in New Jersey which is a lovely place to live! 🤗🤗🤗 My precious son goes to a school for disabled children and most is paid for but we have to pay towards the transport! The transport is not like a school bus cause all the special kids who go to that school have learning disabilities so the transport has wheelchair access and an escort teacher to supervise the kids as well as seatbelt locks to stop the kids undoing their seat belts! 😇😇😇 I have no problem paying towards the transport cause the school has been wonderful bless them! 💖💖💖 They pick him up from my house and bring him home straight to the house and it cost around 500 dollars a year to keep him on the transport but I don't mind! At least then I'm home for my other two precious kids too! 🤗🤗🤗

room101 · 51-55, M

@sarabee1995 So much of what you've said, in your two most recent replies to me, is so way off kilter that I need to give a much longer response than I want to at 01:17am. That's the time here........obviously.

Mañana Ms Sara.

Scribbles · 36-40, F

@ShadowSister Thanks ShadowSister. I'm of the opinion that exploiting people is bad. Period. Self imposed loan or not self imposed.

If they are taking out a loan that means they lack the means to pay and their should be some way to make sure going forward to help them with the means to pay for it, or some reasonable plan to forgive some.debt or limit how much the interest collects at some reasonable point. Is it right if you pay the minimum amount because it's all you can afford and yet have to pay double or triple your loan amount over a long period of time? That's ridiculous! There should be a plan to prevent or rectify predatory loans. How that would work as it applies to student loans or medical debt is an open ended question. It doesn't make any sense to me when I see or hear people have absolutely no compassion for people in a bad or rough situation. No room to help people. And when people do help, it ends up being called bribes, evil socialism, or that we are turning people.into lazy human beings who will never be responsible because welfare equals evil. Which is a very strange perspective.

Who knew being greedy and refusing to help others was a virtue. And that a lack of compassion, a lack of helping make sure people aren't exploited, a lack of helping teach people to make better financial decisions and have reasonable loan payments is evil instead of a virtue. I think part of this is because a portion of the United States tries to persuade people that certain policy ideas are inherently virtuous or not virtuous. Rather then looking at WHY different perspectives and policies and ideas exist and where the ideas are coming from and why? Some people also simply seem to be extra suspicious of anything coming from the federal government rather then a state government agency. Not sure why when many programs require both to work together in some way.

@Sarabee
So you are saying you don't like bailouts for anyone unless society wants and can afford it and it's through a state or local agency instead federally? And only if someone is there to penny pinch and make it efficient...and only if services and rights are "basic". And only if people are free to move around to what we state they want to match their favorite political philosophy. Who is helping the with the "freedom" to move btw? "Rights" and "freedom" are all well and good. But for alot of people they are told the rights are there, but they are unable to reach them because of economics or racism or redlining, etc. Access and equality with rights aren't always the fair.

What does basic healthcare mean? What does basic education mean? What does basic services look like? What about issues like lead poisoning-which is a current major issue where I live due to old city lead pipes? What about systemic racism, unemployment, income/wealth gap, Redlining,.etc?

ShadowSister · 51-55, F

@sarabee1995 I agree with what Scribs said here. One additional thing you wrote above though that I especially wanted to comment on.

I do believe that the best government is the most local government so these things would be managed at the state level.

In principle, that seems like a good idea... until you see how much disparity this can lead to. There is a reason that white supremacists almost universally support states' rights. There is less accountability at the state level than there is at the federal level. And there is less accountability at the local level than there is at the state level.

Of course that doesn't mean the opposite is true either. A federal policy is not necessarily better than a state policy. Either extreme is problematic. My point is that, if all your sovereign policies, O Queen Sara, elevate state governance wherever possible as a matter of principle, then you are also opening the door to all sorts of new abuses that I don't think you quite realize.

sarabee1995 · 26-30, F

@ShadowSister Oh yes I do!!! I'm a huge believer in checks and balances.

First of all, just because I would prefer for a given government service to be managed as locally as possible does not mean that I'd get the federal government and especially the federal judiciary out of it entirely.

I think we build highways the right way. The federal government has huge capacity to raise funds and in this case does it through a gas tax. Then those funds are distributed to the States for them to build roads and bridges. BUT those funds come along with rules and restrictions and requirements to ensure that the road is safe and doesn't unduly damage the environment, etc, etc, etc. Now some people will say that those rules are the problem with the current system. I say those rules are the check on runaway local or state governments not doing things right.

I may have picked a horrible example in roads, but my point is simply that the federal government can raise money and distribute it to find projects that need to meet minimum standards. There is no need for an army of bureaucrats in Washington for this.

And the federal judiciary??? They are there to keep everyone in line.