What your comment makes clear, and what I suspect the author does not consciously realize, is that cancelling debt is spending money.

I imagine federalizing municipal pension obligations would be a better idea.

It would have to follow some sort of extremely firm commitment to overfund future pensions though (future residents getting a rebate from previous taxpayers is way less hazardous than future residents getting taxed for current services).

Both are financially feasible with reduced military spending.

Can you make that argument with numbers?

On my phone at the moment, so I’ll have to come back with an in depth Excel spreadsheet later (and I need to do additional research on Illinois pension debt; numbers available show it somewhere between $130-250 billion).

Cliff notes are military spending is ~$550 billion a year. Halving that gives us ~$275 billion a year ($2.75T over ten years) to direct towards unfunded municipal pensions that need bailing out and student loan debt forgiveness (along with other policies such as reducing the interest on student loans to zero in the interim to give borrowers relief). I also assume that social security tax thresholds are removed, preventing the need for general fund transfers to top up Social Security.

My apologies if I made it sound like we could write a single check and this is all fixed. It’s more the thought that we have ample resources to resolve both issues in a controlled, orderly fashion if orchestrated by competent government representation (a guy can dream).

Edit: we spent $2.4 trillion on Middle East wars

What repercussions do you think a 50% reduction in military spending would have on national security?

A reduction in readiness and force projection, but not sufficient enough of a reduction to put American soil in danger.

Other countries spend orders of magnitude less than the US on their military, and remain conflict free.

Our current path is unsustainable structurally, and we must switch course.

> A reduction in readiness and force projection, but not sufficient enough of a reduction to put American soil in danger.

And your qualifications for making that assessment would be?

> Other countries spend orders of magnitude less than the US on their military, and remain conflict free.

Those "other countries" are, in almost every case, under the defense umbrella of a country that does have an adequate military.

Unless you have countervailing qualifications —- in which case you should talk more about them so we can ask good questions of you —- it’s unhelpful to bring qualifications into the argument.

Nope, it doesn't work that way.

The military budget is set by those who actually do have expertise in the area, not me. I don't need to show expertise to accept the judgment of experts. The OP is disputing those experts, and thus does need to show expertise.

I admit I am not qualified to make my statement with authority, it’s simply my opinion. I’d be most appreciative if someone with significant military management experience weighs in.

So you think we should gamble the national security of the entire nation based on your (unqualified) opinion?

Do you seriously not see the problem with that?

I don’t see the problem with having the discussion. The US military is a disgustingly wasteful (pallets of cash in the desert “go missing”! [1]) organization that has squandered trillions of dollars. Dollars that could’ve been spent on something useful. It’s time for accountability and responsibility.

Do you seriously not see the problem with not questioning that? We can’t afford universal education and healthcare, but we can afford aircraft carriers that are obsolete for force projection (inexpensive surface cruise missiles from China) and F35s that can’t fly, kill their pilots, and are generally speaking not fit for purpose? [2].

[1] https://www.theguardian.com/world/2007/feb/08/usa.iraq1

[2] https://www.thedailybeast.com/military-admits-billion-dollar...

>We can’t afford universal education and healthcare

Countries can exist without universal education and health care.

They cannot exist without national defense (whether provided on their own or through an ally). Sorry, that is simply a fact.

Also, national defense is a clearly enumerated function of the federal government per the Constitution. Neither of the other two is.

I never said no military. I said a reduction in spending. We overspend and egregiously waste on ours. That’s my point. Good chat.

Gotcha. How many people would a 50% military cut put out of work?

That’s a great question, but out of scope for modeling a financial solution to student loan and pension obligations.

We’ll need a way to retask redundant military employees and defense contractors, otherwise we’re trading one inefficiency for the other.

If halving military spending is a hill too far, less reduction can occur and still accomplish a student loan and pension obligation debt “wipe” (~$1.5T in total is needed).

Somewhat unrelated: rolling VA spending into Medicare and implementing universal healthcare would extract enormous cost savings, further reducing DoD spending.

Appreciate you asking me to show my work. I think I’m going to run for office now.

I can’t say it’s the most effective or most moral way to spend a trillion dollars. I can say it’s much more moral and effective than spending a trillion dollars on waging useless wars in Iraq and Afghanistan. It’s much more moral and effective than giving trillions to the very wealthy in the form of tax cuts.

Higher education is a public good. It used to be the case that tuition was around 1/3 the cost of running a university. Now it’s north of 50%. It’s not good for society to have some many people in a lot of debt in their 20s. The so called greatest generation in American history, at least partly, got their greatness from free higher education.

Maybe this isn’t the best option but something needs to be done because the current system isn’t sustainable.

That’s a good argument for not engaging in another trillion dollar war, but not necessarily for spending a trillion elsewhere.

Also: why is it particularly bad for 20-somethings to carry debt? They’re 40 years from retirement.

> Also: why is it particularly bad for 20-somethings to carry debt?

Opportunity cost. Not making that risky but high upside potential career move at 26 because you have a $1k/mo debt payment to make is going to severely impact your total earnings far more than any other time of your life.

The advantage of youth is mobility, flexibility, and ability to take on risk. You give a lot of that up with a high debt load at that age.

So you think we should use public policy to shift debt load onto older people, who have family obligations and a much more limited window of time to ensure financial security After the conclusion of their working years, so that 20-somethings can start companies?

If we are going to have a society worth caring about and living in then we have to have shared burdens. Sometimes I’ll help pay for something I’ll never use for the benefit of others. The go it alone mentality leads to a shitty society. It’s proper, right and just for society to provide universal higher education for qualified people. It’s beneficial to everyone that this be the case.

Besides, in the U.S. a great generational theft has occurred. The older folks benefitted from much higher public support for their higher education. Now they vote to defund higher education and this has led to penury for large numbers of recently graduated college students.

If it's proper, right, and just for society to provide higher education, is it also right and just for them to subsidize tuitions for expensive private schools rather than local state schools?

It depends on the society and how it is structured. Generally, no.

How do you reconcile that position with a belief that we should forgive student debt? Do you have an estimate as to how many of those dollars will have gone into the pockets of elite schools?

I didn’t say it was bad for them to carry debt. It’s bad for them to carry a lot of debt.

Yes, it was not a great argument for spending a trillion dollars on student loan forgiveness. Mostly I was pointing out how out of whack the moral priorities of the U.S. are. There is very little debate or angst over spending a trillion dollars on a useless war. But somehow spending a trillion dollars on student loan forgiveness makes everyone think about moral hazard. You mentioned morality and so I took things a bit further than what you did.

My problem with college subsidy isn’t moral hazard; it’s that it’s regressive.

It’s partially regressive (not all of the money to fund this would come from regressive taxes) but it’s in everyone’s interest to have an educated society that isn’t unduly debt burdened once they leave college. We all benefit from this. So forgiving this debt palatable to me. It’s why I don't mind funding k-12 education even though I don’t have kids.

It's regressive no matter how it's funded, because the benefits are structurally determined to impact primarily families of means. The wealthy attend expensive colleges. If college tuition were free, that would remain the case.

I believe you are using the word 'regressive' incorrectly then. Of course, just forgiving all student loans will disproportionately help some who don't need it. But in the U.S. we've decided against universal, public higher education for those who are qualified and thus inequities will occur no matter what happens. It's disproportionately the case that the wealthy get into schools with the best connections. Those tend to be private schools. Such is what happens when a society starts down the path toward Ayn Randian utopia.

It will disproportionately help the well-off, period; not just "some of them". The dominant distributional effect will be to shift dollars that could have been spent on services, tax relief, or debt relief for less-advantaged households to far-better-advantaged households. It's pretty simple to see why; it's the same reason why the mortgage interest deduction is regressive.

I don't see how advocates for this policy can escape that logic without declaring math irrelevant.

If we want to improve access to and financing of higher education in the US, we should radically expand Pell Grants, not write a 12-figure check to wealthy families.

Journalists love welfare for upper middle class people. Mortgage interest deductions on your $1 million McMansion? Forgiveness of your $250,000 law school loans? Bring it on!

Our student loan system is fine. Under PAY-E, you’re payments are capped at 10-15% of your income, and high interest rates means you recover some extra from high income people that can be used to defray the costs to lower income people. It needs tweaking to make sure it stays in the black, but that’s it.

Just fine? Hold on.

If you're making $50k a year you net $3,350/mo. 10% of that is $335. So each month you're paying $335 against the $1500 in interest that your $250k loan demands. How is this in any way helping? At the end of the 25 years[0] your balance is written off, right? But then it may become _taxable income_[1]. So suddenly you're writing off $1,000,000 plus your salary, and that hits you with a $487,000 tax bill[2]. Hopefully you've been doing a great job with your savings, because if you can't pay that tax bill the IRS charges interest daily on your outstanding tax bill and associated penalties[4], not to mention they'll demand that you sell off any meaningful assets[3]. Then, of course, this causes another economic crises because 25 years from now, we suddenly have a whole slew of people who are 50 and no longer have their life savings, and may not have their house, depending on how the IRS is operating 25 years from now.

It looks to me like PAY-E is _exactly_ like a student loan in the first place -- a great vehicle for pushing your debt responsibilities into the future with the hopes that some other program will save you. And in this scenario, how are you supposed to attract a mate, have a family, a home, or any sort of hope for the future? Sure, you made a screwed-up decision when you were young and you should be punished for it, I totally agree. My question is, does the punishment fit the crime?

[0]https://studentaid.ed.gov/sa/repay-loans/understand/plans/in... [1]https://studentaid.ed.gov/sa/repay-loans/understand/plans/in... [2]https://pocketsense.com/taxes-1-million-dollars-8063543.html [3]https://turbotax.intuit.com/tax-tips/tax-payments/what-is-th... [4]https://www.irs.gov/businesses/small-businesses-self-employe...

Debts that can't be paid won't be.

At this stage, it's about damage control.