Help me out with this student loan debt cancellation plan.
Is this a one-time thing? Should people getting student loans today or tomorrow also expect them to be paid off by someone else in the future? If so, how does this not become de-facto free college? Why wouldn’t everyone now take out the maximum amount of student loan momey they can possibly get away with? How is this good public policy? If not, how is it even remotely fair that one group, and not those that came before or after, get their college paid for?
If there was a magic wand I could wave to get Democrats to wake up about something, it would be the role incentives play in human behaviour, and the secondary effects of primary changes. For example, it was obvious that crime was going to go up after ‘defund the police’, and after progressive DA’s stopped cash bail policies and started releasing criminals back into the streets. It was also obvious that this would blow back on Democrats. But you all seemed blind to the possibility until it happened.
If you forgive student loans, the obvious result is that the cost of education will increase because students will be incentivized to borrow more money, which will incentivize colleges to raise their fees. What you are really doing is creating a wealth transfer system that will ultimately move more money to university administrators at the expense of future students who will take out more loans to pay higher tuition, or at the expense of taxpayers who will fund it all if those loans are also forgiven.
The same goes for free daycare. Is it really wise public policy to incentivize people to put their children in institutions from a very young age? Because if you make it free, a LOT of people who would otherwise raise their kids at home will put them in facilities. It will also drive the cost through the roof, as any massive injection of money into a market where supply is contrained must do. This will eventually force more regulation and federal control of daycare, and increase the overall cost to society dramatically while enriching a few insiders such as teacher’s unions who will invariably seek to control it. I have experience in that area.
Our city announced a ‘solution’ to homelessness a while ago: make it a lot easier to be homeless through shelter programs, food programs, lax enforcement, etc. The result was the opposite of what they intended, but totally obvious to anyone thinking about incentives. Make it easier to be homeless, and you’ll get more homelessness. That’s how human nature works. It’s not hard to incentivize people into decisions leading to lifelong dependence, which helps no one.
Please, don’t just think of who you can help today. Think about the nature of that help, and what it might do to those people and society tomorrow.