Amidst the highest level of inflation since Jimmy Carter, the current resident of the White House is considering throwing gasoline on the fire by waving his executive pencil and forgiving $10,000 in student loan debt per borrower.
The administration claims that this will forgive $321 billion in loans, but my back of the napkin figures place that at closer to $400 billion. In any case, that means that another $350 billion or so dollars will suddenly be added to the dollars circulating through this inflationary economy in a time when we should be tightening economic purse strings, not spending like there is no tomorrow.
Inflation will continue to get worse. It’s like a couple of 14 year old kids are playing with a can of gasoline and some matches. In the house.
5 Comments
Big Ruckus D · May 1, 2022 at 10:01 am
Now, will shitpants joey waive the resulting tax liability as well? Or will the debt forgiveness trigger a tax bill for the amount forgiven on each recipients 2023 filing? Because I really want to hear the screaming when all these innumerate litttle shits get hit with that bill, which is post election (of course). That would be glorius. And it would be on top of the added inflation costs that will result, taking another bite out of their asses (and the rest of ours as well, regrettably).
Skinnedknuckles · May 1, 2022 at 11:44 am
I suspect that the larger inflationary effect will not the the $320B (or $400B) bu the effect of everyone with student loans just stopping paying them back because they believe that eventually they will all be forgiven. In other words, the amount currently being paid back annually (I’ve never seen that number, have you?) will suddenly be in circulation chasing ever more scarce goods.
SiG · May 1, 2022 at 3:14 pm
Yet another lesson that if you work your life to the best of your ability to minimize long term debt and either didn’t incur student debt or paid it off already, you lose. If you already paid your student loans off, now you have to contribute to all those other people who didn’t pay (or haven’t yet). If you or your parents scrimped and saved for years and paid for school with no loans, congratulations, you pay for the others now. If you went to trade school or some other line of work because you didn’t want to incur that debt, now you get to pay for the other people.
Divemedic · May 1, 2022 at 3:42 pm
I did all of the above.
I went to trade school (firefighting and paramedic) and paid for it by getting a fire department to subsidize it in exchange for a term of service. Then I paid to go to college to get an Associate’s Degree, followed by a Bachelor’s. I did this by going to school while working multiple jobs to support myself and still have enough to pay for school. All that time, I paid for people to go to college on Pell grants via my taxes.
Now I also get to pay for the people who partied while attending college earning a degree in Hating America with a minor in Despising White Males who used student loans to pay for it, but now are going to use dollars created out of thin air to repay those loans via the US govt.
Work is for suckers.
McChuck · May 2, 2022 at 10:20 am
Oddly enough, paying off bank debt removes money from circulation. Strange but true.
Banks create debt out of nothing to loan money out. When you pay it back (plus some real money), the banks cancel the debt and erase the existence of the money.
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