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A comment on Will there be 50B+ in student loan delinquencies in US?. Parent comment

Re:Will there be 50B+ in student loan delinquencies in US? by gorgoiler on Saturday August 10, 2024 @12:22AM (#41207304)
Does that go into the hands of consumers though? The great thing about debt forgiveness is it goes directly to the population.

The only more direct route would be to write everyone a check! (…and I just remembered Trump actually did that.)

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Re:Will there be 50B+ in student loan delinquencies in US? by guidedlight on Saturday August 10, 2024 @05:10AM (#41208271)
Indirectly it does. Check out the economic multiplier effect.

https://www.tutor2u.net/economics/reference/multiplier-effec...

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Re:Will there be 50B+ in student loan delinquencies in US? by _heimdall on Sunday August 11, 2024 @08:09AM (#41215622)
This hasn't held up at least over the last 15 years ago in the US. Our debt to GDP was around 60% going into the housing crisis. The ratio is now roughly twice that, around 120%.

In that time our national debt went from $9B to $33B. GDP went from $15B to $25B.

You can always calculate the multiplier, but in this context the multiplier would really need to be greater than 1 to show a meaningful economic benefit to the additional spending, and the debt to GDP ratio would decrease as GDP would grow faster.

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