T0: We both have $0.
T1: We both borrow $10,000 and have -$10000
T2-T11: We both make $2,000, of which I pay back $1,000, you pay back $0 per time period
t11: The government pays off your $10,000 loan
At T11 I will have $10,000, and you will have $20,000.
This is what I mean by bucket-crab mentality. The inability to discern someone else doing better from you doing worse.
Except we do have an idea not just from the news/knowledge, but also from the fact that taxes fund this scenario.
One gets their tax money (plus some) back. Another pays taxes, but gets none back.
This is the crux of it. You're not actually penalized, it just makes you upset. You can choose to not be upset. I'm happy that people who most need help are getting some.
> But also from the fact that taxes fund this scenario. > One gets their tax money (plus some) back. Another pays taxes, but gets none back.
This is false. No taxes were levied on you to fund this scenario.
If you want to count the downstream effects, the deficit is drastically down under the Biden administration, so this is part of a package deal that helps you out (not that the this would raise your taxes anyway even if the deficit were to increase).
Not to mention the effects of stimulus from people who would otherwise be paying money on a loan but can now spend it on other things, which will trickle up to whatever corporation you work for, so from this action alone you may actually come out ahead.
But I contend that you're not interested a full accounting or the dollar amount people are receiving, because if you were, you would be much more interested in the pounds being given to interests that clearly don't need them (military, mega farms, oil) instead of the pennies given to those that do.
The short of it is no taxes are levied on you for this to happen, it really is a win for everyone, and it's ok for these people to get a little bit of help that you're not getting.
This is the crux of the point. We're discussing that two people with equal _capability_ to pay, but differing conscientiousness have outcomes that are inverted from a well ordered set of incentives. We're creating (additional) precedents for rewarding irresponsibility with finances in the face of marginal choices between paying back a loan and present day consumption. (not in the choice of degree)
> you would be much more interested in the pounds being given to interests that clearly don't need them (military, mega farms, oil) instead of the pennies given to those that do.
I actually am interested in these, and they're just not the specific topic today. For the record I am against most (all?) forms of market distortion by the government, except when they're breaking obviously distorted economic incentives[1] (and not creating worse ones as is the case here).
> of it is no taxes are levied
Taxes for the most part a general bucket and as such expenditures as such are from taxes paid. Even if it's not my money it's not right for whomever paid them
[1] such as tragedy of the commons
No, because you spent $10K on random stuff that he/she did not. Somewhere you have $10K in goods, services, or experiences that he/she does not.
Governments raise money through taxation. 10k of forgiven debt is 10k more than needs to be raised in taxes.
Someone payed their debt, and then will be taxed more to pay someone else's too.
You might say, "but governments don't have to balance their budget", yet the US still has taxes. If money spent (and debt incurred) is irrelevant, why collect taxes at all?
Suppose everyone else on the planet is given $10B and you get nothing. Why would you be concerned? How could it be unfair? They're just being given something that you are not.
A dollar is a dollar. Why are we giving only college educated people that don't have enough money to pay their loans back $10,000?
This concern is where does the money "come from?". No money is coming from anywhere, because no money is changing hands. It is debt that is owed that is no longer owed. No money is taken from any pool of money to pay is off, it is simply removed from the books. No government program is paying for this. No taxes are levied on you. You will not see your tax bill go up as a result of this. Levying taxes is a power of congress, no the executive, so Biden could not do this even if he wanted to.
Your next question is why are we helping these people who need it - we are helping them because they need it, because great countries take care of their own. You were able to pay off your loans - that's great! But many others did not fare as well, and it is in our collective interest that they not suffer so terribly for this financial burden. Less money being paid back to these programs (which have terribly high interest rates to begin with) means more money stimulating the economy. It means more money will trickle up to the corporation you work for, and you will see some measure of this benefit.
I would suggest that instead of spending so much time being upset about how some people at the bottom got some help you instead redirect that energy toward the programs benefiting those who do not need the help and are absorbing resources that utterly dwarf students having to pay $10k less - the military, oil subsidies, megafarm subsidies.
As long as we're punching, why not punch up instead of down?
EDIT: As for "why are we only giving to these people who need it" - great question! I would welcome giving more help out. I would agree this measure doesn't go far enough. We could be doing more, and we should demand that we do!
Student loan forgiveness is not being "paid for", because no money is changing hands. It is debt that is being forgiven. The government is not paying money out for this, because it is already spent.
Your taxes keep going up because you are making more money. It's not a bad problem to have.
Federal spending tripled since 1970, after accounting for inflation and population change. State governments have done much the same.
>Student loan forgiveness is not being "paid for", because no money is changing hands.
My that measure, my bank shouldn't mind if I don't pay my mortgage. After all, new money isn't being spent.
That's silliness. Your bank is not going to forgive your debt, so that will not pan out for you. Biden is forgiving the $10,000 in loans, so that will pan out for the recipients.
The money had to come from somewhere. At the very worst case it's dilutive printing that is an invisible taxation (via inflation).
Keep in mind the hierarchy of the federal reserve, which is split into banks, which have at least some percent of private ownership. While the government can "forgive" the student debt, it must keep the debt owed to the federal reserve on it's balance sheets (deficits and debts). The Federal Reserve (afaik) is not forgiving that debt. Therefore some where, someday, someone is going to have to pay off the that government debt (and along the way the interest accruing)
Alternatively, can I borrow $10k from you?
This, however, just smacks of "the train ran over me, so it's disrespectful if it doesnt also run over everyone else."