https://thehill.com/policy/finance/569969-biden-cancels-over-9-billion-in-student-loan-debt Can anyone present a convincing argument that these bailouts will NOT eventually sink the US economically and/or politically?
When it is the cancellation of student debt I don't see it as a bailout, more a government choosing to pay for education and paying for it retrospectively. This is not necessarily a bad thing many countries have governments who choose to pay for the cost of university education and it often helps. It will also unburden the students who are starting off in life and have a high propensity to consume, which will speed up the rate of transactions and boost the economy. There has been a shift with the American government to pay for university education with this 'bailout', which has pros and cons. Reducing the cost of education and freeing up income for individuals who have a high propensity to consume may help the economy in the long run. It will certainly make their lives more liveable at this difficult time. If it is intended as a macroeconomic technique to boost the economy it better than some. Making more funds available for low savers and high consumers, which the former students will be categorised as would stimulate economic growth. It is a very effective technique to stimulate growth with a relatively low cost. If it is paid with a small amount of QE rather than debt then it is better.
Thanks for a thoughtful reply. Your last paragraph is questionable. Giving money to people at the bottom rung does not stimulate economic growth. Educating people is a different story. It is entirely a different question how to prevent frauds in trade schools. FYI I consider public education to be the biggest fraud of them all. Just look at the performance of American education. Graduates are semi-literates and have poor mathematical skills. Germany, Japan and S. Korea are different.
People with limited funds spend more of the money they have and save less, which means it is more effective to give less affluent people who spend more and save less stimulus funds to enable economic growth. This has been proven effective in the United Kingdom over the past decade, when they rearranged the tax system to take in the same revenue but from different people. It is explained in Appendix V of Euro Crisis, you can view it for free at the link below. It is the 2nd Scribd document down page 97 to 100. https://morganisteconomics.blogspot.com/2021/07/morganist-economics-books-for-free.html There was a movement in the United Kingdom over the past decade to increase the taxation exempt personal allowance, which lowered the tax burden on the less affluent. There was an increase in higher earner income tax at the same time, the taxation intake was the same but the selection of who paid the taxation enabled a greater number of transactions to help sustain economic growth over the past decade. This method of taxation rearrangement increased economic growth without reducing government revenue.
Why are highly educated students at the bottom rung? They haven't got much money so they will spend what they have got, which speeds the economy up if they consume more. However they are educated and have huge potential to start their own businesses, which will stimulate growth. Giving the highly educated more funds is a good thing, plus they will need to spend the money that they have which is another good thing and helps to stimulate economic growth.
%% Besides the proven principal ''one monkey don't stop no show''?? With all due respect, zdreg,did you see[Googled it] the total 2019 value chart of US lottery ticket sales =$91 billion/+. Its like Dave Ramsey said\ ''a lotto is a stupid tax on people that cant do math'' I like wildlife management , one herd of baboons ''dont stop no show '' also. A bunch of monkeys throwing darts @ a stock page on WSJ ,again, ''dont stop no show.
%% Maybe, maybe another 200 years. Great thing about capital markets, one monkey dont stop no show. NO monkey never stopped me .................................................................................I'm careful around even caged bears or lions.
All they have to do to avoid an economic meltdown is to increase economic growth. It shrinks the government debt as a percentage of GDP without the need to increase taxation or cut government spending. No Tears economic solution. There are new techniques I have developed that can generate additional economic growth.
Oh it is so much better to put federal tax money to work building yet more defense offense dept's latest greatest killing machines. Like (note Stars and Stripes is no leftie commie rag).... The F-35 Joint Strike Fighter, the costliest weapon system in US military history, now faces pushback in Congress https://www.stripes.com/theaters/us...y-now-faces-pushback-in-Congress-1618847.html