Tobold's Blog
Wednesday, March 01, 2023
Panem et Circenses

I am generally in favor of government giving out free money to people in case of need. However, money is never really free. Somebody else will always have to pay for it. Still, redistribution can be justified in some situations. For example many governments gave people money during COVID; the population as a whole will one day have to pay that back, but with everybody getting a COVID cheque and richer people paying more taxes than poorer people, it works out as a relatively fair distribution from rich to poor.

Now imagine you threw free money out of a helicopter over San Francisco. Some of the money would end up in the hand of the homeless that are pretty frequent there, so you might be tempted to justify that helicopter money that way. But obviously the distribution would be relatively uneven, unequal, and some of the money would end up in the pockets of people with 6-figure salaries.

The US student debt relief plan that is now in front of the Supreme Court is more akin to that sort of helicopter money. Yes, some of the money will go to people who deserve it. But that is not the primary criterion on which that money is paid. The money doesn't go to everybody, but to a select group with federal debt. And while there are criteria that prevent people above a certain income to get that debt relief, there will still be a lot of people who were doing relatively okay who get that money. And there will be a lot of other people who would have needed that money a lot more who will not receive any, either because they didn't go to college in the first place, or because they did, but with a different sort of student loan. Which means that in the end *some* of the flow of money will go from poorer people's taxes to the pockets of people who were already a bit better off.

So why would the government distribute free money in an unfair way? The first explanation is that the president of the United States normally doesn't have the power to distribute free money. But existing legislation allows him to forgive student debt in case of a national emergency. Basically, he is giving out that specific form of free money, because that is the only channel open to him. The second explanation, and that is in addition to the first, not instead, is that elected politicians since that job was invented have liked to give free money to voters that are likely to vote for them. The ancient Romans had "panem et circenses", free bread and circus games. In the US, then president Trump made sure that the COVID cheque bore his name. Student debt relief will not only please millions of Americans who receive it, it will particularly please Democrats, because the majority of the money will go to them.

US media are full of sob stories about people from minorities going to scam for-profit colleges and ending up with either no degrees or useless degrees and a lot of college debt. But student college debt relief isn't going *only* to these people who probably deserve it. It is helicopter money that sometimes by pure chance falls onto somebody deserving. If the US wanted to fix its higher education system, it should do like most other countries and provide higher education at subsidized rates to everybody who wants it, killing off the business model of the scam for-profit colleges and universities. One-time student debt relief will not fix the problem, and might well increase the future cost of higher education, producing even more problems down the line. The $30 billion per year over the next decade that student debt relief would cost could be spent in better ways, with more of it going to the people who really need it, and ensuring that more talented but poor people end up with a viable college degree.

I've long since ceased to be interested in your personal, political views and usually I don't even glance at the political posts but the bread and circuses title fooled me into thinking it might be something about gaming. Since I'm here, I'm just curious as to why you feel motivated to post about American domestic policies, something I'd seen you do a few times before I stopped reading the political posts.

Is it that you think American policies are so influential they'll be taken up and copied by an administration that affects you directly? Or that America itself is so powerful and dominant that everything the US Government does directly affects the rest of the world, even when it stays within US borders? Is it some kind of schadenfreude? Or are you nudging a political agenda to which you tacitly subscribe?

For that matter, how is it that you know "US media are full of sob stories about people from minorities going to scam for-profit colleges"? Do you follow US media to that extent and if so, why? I mean, I'm immersed in American culture but I had no idea that was the case, assuming your reporting is accurate. I've literally never seen a single story about it on any of the US-based information channels I follow, but then they're all dedicated to subjects that interest me, like music, film, tv and gaming, not politics.

Anyway, I'll try to screen out the political posts more efficiently in future. I prefer the ones on tabletop games and the reports on your D&D campaigns, which I don't think you've done for a while.

"media are full of sob stories about people from minorities going to scam for-profit colleges and ending up with either no degrees or useless degrees and a lot of college debt."

Most of these cases are being dealt separately. The federal government has already forgiven loans of students that attended certain for profit college programs that turned out to be scams this past year.

I get your point and yes in an ideal world we should reform our higher education system to A) ensure more people can participate with going massively into debt and B) ensure colleges stop jacking up tuition costs and fees just because students have the ability to take on larger loans.

But this isn't an ideal world and we have to deal with the imperfect political system we have. And changes like these will never happen without a higher threshold Democratic majority so forgiveness of $10,000 is a band aid that can be done now if it wins in the courts.

And to address the $30 billion comment. We often spend far more in programs thay don't benefit any American Citizens. I'd rather see my tax money go into the pocket of someone doing okay making $65,000 a year then to bomb a person halfway around the world. $30 billion is less then what the PPP fiasco will cost and less then many other government programs. It's always telling that the media only tends to worry about costs of programs when they are welfare programs.
I am following several news aggregator sites and applications, like Flipboard and Google News. I haven’t limited them to any region, but am reading “world” news. Call it cultural imperialism, but the SCOTUS debating student loan forgiveness does make it into world news, while a decision by the e.g. German equivalent usually doesn’t. Take any “opinion” piece on that subject that is arguing for student loan forgiveness, and you’ll see the stories I mentioned.

I do believe US domestic politics matter, because you have potentially world-destroying politicians like Trump. And I am expressing my bafflement over the fact that with all of us agreeing what a totally horrible person Donald Trump is, the Democrats can’t seem to offer the American electorate something that is so obviously better that Trump wouldn’t have a chance to be re-elected. I would have thought that to be a low bar. But a mix of identity politics and partisan economic policies isn’t cutting it.
I don't like the idea of debt forgiveness for anyone that made the decision to go into debt. Being scammed is something entirely different and that should be handled on a case by case basis and the taxpayers shouldn't be responsible for it.

That said, I would like to see different education models truly tried in this country. A healthy educated society seems to be the foundation necessary for success. I don't know what models are best, but our current model cannot be it. We leave so many people uneducated or under-educated. Granted there will always be a segment of the population that just can't meet societal standards, but most seem capable of that. Lowering the barrier to entry for those that want to be educated and productive members of society seems beneficial to all in the long run.
The problem is the Democratic Establishment isn't so different from the Republican Establishment. Biden in just about any European nation would be in the conservative party. The DNC thrives on maintaining the status quo just as much as Republicans do. The old guard from both parties love to be able to promise huge sweeping changes without actually having the votes to do so.

It is very telling that when both parties do have super majorities they often don't pass the more extreme things they campaign on.

Democrats do offer more substantative policy agendas then Republicans in my opinion but what often makes the headlines are rage bait articles focusing on fringe issues.
@Bigeye, yes I wish I could combine what I like about both parties to create a centrist party.
@Tobold the online aggregate view of people in the US will not really ever reflect the on-the-ground view of actual, live people. At bare minimum, if you're getting your info on the US through Flipboard and Google then you might occasionally contrast that with a shocking slash to the face by going to Breitbart or OAN to see just how wildly different things can get, and know that there are entire swathes of this country that consider CNN to be a thinly disguised propaganda piece for the far left.

The student forgiveness is a good start, but worrying about whether someone makes too much money for forgiveness to count is missing the point. The issue starts almost forty years ago when Reagan and later Clinton allowed for a reform on student loans to turn the entire industry into a predatory practice, and the days of affordable college evaporated. My own State of New Mexico passed a law last year making in-state tuition free, and its been a major relief; my wife is now about to complete her degree, and I did not have to shell out $15K a semester for her to do so. I make good money by some standards, especially in NM, but nowhere near enough to just soak a $15K/semester cost to keep her going. Most students in NM had to seek out grants or loans, and the loans are much more common. Most students in the US, even with a degree, are looking at debt in perpetuity.

As an old school liberal, I am all about the government hopefully fixing this issue, and alleviating the debt. The debt in question, I hate to say it, is often predominantly interest, so this is not money which "must come from somewhere." This is money which was designed to turn college students into perpetual indentured wage earners. If someone makes $65K a year they deserve the relief as much as someone who makes $44K (the household medium income in NM) or $100K or even $200K. This is not about debt relief for the poor, this is about debt relief for everyone who is captive to a corrupt predatory loan system.
This is not about debt relief for the poor, this is about debt relief for everyone who is captive to a corrupt predatory loan system.

But does the actual policy live up to that lofty goal? What about people who didn't get a federal loan, but a private one, or a public one that isn't part of the list of eligibility? The debt relief *isn't* for everyone, and at the time they took their loans, it wasn't foreseeable to the students which debts would be forgiven.

There are several European countries (Germany, France, Austria, several Scandinavian countries) in which universities are free of any tuition fees. And if you come from a poor background, the state might even contribute to your cost of living during your studies. That to me seems like government money better spent.
It's a combination of things. Some pushed for it because it was a way to garner affection for the democrats. Some pushed for it because there was a big "loan" program for businesses during the pandemic where the loans ended up being forgiven and so it didn't seem fair that businesses got a huge break and individuals didn't. Others believe it will be an economic boon because it will give young to middle aged adults more buying power to afford houses, etc. Since the social promise of a college degree= decent living standard hasn't paid off for many. And yes, it is a tool that Biden could use despite political deadlock. Not super efficient, but what other options were reasonably available?
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