Introduction
Recent headlines claim that Joe Biden will be the next president of the United States, while allegations surrounding election fraud are dismissed as unfounded. But how much faith should we place in these assertions? Do you trust the information being presented?
Regardless of the controversy, Biden is moving forward as if he is already in office. He is engaging with international leaders, meeting with vaccine manufacturers, and laying out grand plans. However, his approach appears to be lacking for some progressives.
For instance, the group Justice Democrats criticized Biden for appointing individuals seen as aligned with corporate interests. They argue that these “corporate-friendly insiders […] will not help bring about the most progressive Democratic administration in generations.”
Biden is certainly receiving a flurry of suggestions. Influential figures like Elizabeth Warren and Chuck Schumer are urging him to erase up to $50,000 of student loan debt per borrower. Schumer claims, “Joe Biden can do that with the pen, as opposed to legislation.”
Will he heed their advice? What about progressive leader Alexandria Ocasio-Cortez? On Monday, she tweeted:
“Student loan forgiveness is good, actually.
We should also advocate for tuition-free public colleges to prevent this enormous debt crisis from financially destroying future generations. It’s one of the easiest progressive policies to fund through multiple avenues, including a Wall Street transaction tax or an ultra-wealth tax.”
Addressing the Crisis
The student debt crisis certainly warrants attention. Approximately 45 million borrowers are collectively burdened by around $1.6 trillion in student debt, primarily from federal loans.
This burden largely stems from government involvement, which inflated a higher education bubble and fostered an environment filled with less-than-productive academia. The current model primarily targets naive 18-year-olds, enticing them into significant debt under the pretense that college is the key to success. However, rising tuition costs, driven by easy access to loans, challenge this notion.
Forgiving these loans merely rewards a compromised education system. Instead of alleviating student debt, we should consider ending government-supported loans altogether, cutting the financial pipeline that fuels inflated educational costs.
In this scenario, what would happen to professors with high salaries or lavish university campuses without federal funding? Tuition rates would likely decrease, instructor pay would be adjusted, and schools would adapt to maintain financial viability.
Would the quality of education decline? Not in fields that truly matter. Streamlined budgets could eliminate redundant or unproductive courses, often funded by excessive federal loans. Conversely, making public colleges tuition-free, funded by the wealthiest, would risk reducing education quality, essentially transforming higher education into a prolonged secondary education experience that leaves graduates unprepared.
The Path of Inflation
The astonishing sum of $1.6 trillion in student loan debt represents a significant burden created by government policy. Solutions proposed by the government often exacerbate the situation instead of resolving it.
Erasing this debt does not eliminate its existence. Debt is essentially borrowed wealth, and it must eventually be repaid or defaulted on. When the government forgives student loans, it simply shifts the financial burden from borrowers to taxpayers.
How will taxpayers cover this? In fiscal year 2020, the U.S. government reported revenues of $3.42 trillion but incurred expenditures of $6.55 trillion, leading to a deficit of $3.13 trillion funded through debt.
Nancy Pelosi is advocating for Congress to pass a $3.4 trillion coronavirus aid plan. Add in another $1.6 trillion for student debt forgiveness, and we’re looking at $5 trillion before accounting for other spending areas like Medicare and social security. Plus, there are many other obligations Biden faces due to various pressures.
The Justice Democrats are pushing for the creation of an Office of Climate Mobilization from Day 1. What that entails remains vague, but it undoubtedly sounds costly. And ultimately, it’s taxpayers who will fund these initiatives.
It becomes evident that these challenges lead us back to the same conclusion: the inevitable devaluation of currency. The U.S. government will continue inflating its way through these troubles, and with the progressives pushing him, Joe Biden seems all too willing to comply.
Conclusion
As the government continues to grapple with the consequences of policies regarding student loans and education funding, it is crucial to consider sustainable alternatives. Instead of perpetuating a cycle of debt and inflation, perhaps it’s time to rethink how we finance education and support future generations.
Sincerely,
MN Gordon
for Economic Prism
Return from The U.S. Government Will Inflate To The Bitter End to Economic Prism
