Would forgiving Student Loan Debt stimulate the economy?

Discussion in 'Politics' started by TimeTraveler, Feb 18, 2009.

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Should we bail out college graduates?

  1. Forgive student loan debt to stimulate the economy

    2 vote(s)
    28.6%
  2. We should offer a comphrehensive debt relief package to stimulate the economy

    3 vote(s)
    42.9%
  3. Forgive student loans or offer any debt relief(we should pay off the debts we owe as individuals)

    0 vote(s)
    0.0%
  4. Bail the institutions and raise taxes on individuals.

    2 vote(s)
    28.6%
  1. TimeTraveler Immortalist Registered Senior Member

    Messages:
    3,023
    According to Robert Applebaum: Forgiving Student Loan Debt Would Stimulate Economy

    Applebaum writes:
    He has started a facebook petition group http://www.facebook.com/group.php?gid=46657437878 which has around 66,000 members.

    The debate is at

    Hufflington post. http://www.huffingtonpost.com/jon-chattman/forgiving-student-loan-de_b_164103.html

    Dailykos. http://www.dailykos.com/storyonly/2009/2/16/12214/9992


    I think the idea is a good start but flawed. We cannot "forgive" student loans because these loans must be paid for. A better idea would be a debt relief package where the government gives a tax credit equal to the size of the student loan debt each year. If the student uses this to pay off their loan debt, they should keep getting the tax credit each year until it's paid off. If they don't pay their loan debt, or they end up with bad credit, they tax credits should cease. This rewards good credit with debt relief.

    In general it makes sense to bailout college graduates because these people are the tax payer base. If the current problem is that the average tax payer's debt is greater than their income and so the taxpayer doesn't spend any money, it seems the only way to creating spending is with debt relief, and the best way to do this is through tax relief from credits based on their income, so if they don't make a large enough income to pay off their debts the government could pay the debt.

    If this doesn't happen, none of the stimulus bills will work because bailing out institutions does/will not bail out individuals, banks wont have anyone to lend to because nobody will have good credit. Bailing out the auto industry wont make people buy cars because people will be too busy paying off their debts to buy a new car. Basically the only thing the average American will be able to afford to pay for is food, medical expenses, rent, and debt. By bailing out the very corporations who lend out the money it doesn't change the fact that the average citizen is going to be in debt for the rest of their life.

    So the real debate is debt, and whether or not we need debt relief. If we need it then how do we do it? If we don't need it then what are our alternatives to boost consumer spending? Debt seems to be bad for consumers spending.
     
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  3. swivel Sci-Fi Author Valued Senior Member

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    2,494
    No, but we should stop promoting college as much as we do. It is just as problematic as urging everyone to own a home, even those that can't afford it.
     
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  5. Cazzo Registered Senior Member

    Messages:
    1,031
    Why should tax payers be forced to pay off anyone elses irresponsible debt ???

    If you can't afford something, including education, don't buy it. Or at least save up until you can afford it.
     
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  7. TimeTraveler Immortalist Registered Senior Member

    Messages:
    3,023
    Even if we stop promoting college, which is a valid option, it does not make the USA more competitive in a knowledge economy if we don't produce any knowledge. Do you think China, India or the Europeans are going to stop promoting college?

    No, instead they are making college free and then flooding the market with over-educated graduates to compete with our uneducated workers. All this discouraging college will do is speed up outsourcing and make corporations complain that they cannot find qualified skilled workers in the USA.
     
  8. TimeTraveler Immortalist Registered Senior Member

    Messages:
    3,023
    EXACTLY, which is why we shouldn't bail out Wallstreet, Homeowners, The Auto-industry, or anybody. There should be no bailouts. Instead we should just cut taxes on our educated workforce to increase US competitiveness in the global economy, and if they want to use the tax relief to pay their debts, or go back t o college, it's their choice. Basically either government must shrink and give the money back, or government must grow and we can all get government jobs.

    Either we can bail out the government, or the government can bail us out. The national debt keeps increasing, the government expects you the tax payer to bail them out, and they keep giving your money to the already rich on Wallstreet, this just increases your debt further. The issue is going to be a situation where we will either get out of this by hyper inflation, and this means the government is basically going to have to print a lot of money and give it to the tax payers to get them to buy their way out of debt, or the government is going to have to bailout individuals and institutions and spend to create government jobs.

    Doing neither of these is not an option, either we must print money and do a deliberate inflation to increase spending and allow people to pay their debt, or we will have less tax payers, the government debt will increase so taxes will rise on those who do have jobs, and the jobs eventually wont pay enough money to pay the debt.
     
  9. ElectricFetus Sanity going, going, gone Valued Senior Member

    Messages:
    18,523
    I don't have any student loan debt (thank god) I choose a cheap university, and I still ended up in a top notch graduate school for my field, I even got my folks to pay for my college, at the requires that I personally take care of them when they are old and invalid, but I figure they will be so senile by then they won't notice that I dump them in a old folks home.
     
  10. joepistole Deacon Blues Valued Senior Member

    Messages:
    22,910
    Electric, I don't believe you would do that to your parents. I am sure you will lovingly change their diapers as they changed yours.

    But forgiveness of student loans will have little stimulative impact on the economy. The problem is people are afraid to invest. People who have money are hoarding it. That is why government must be the buyer of last result.
     
  11. CutsieMarie89 Zen Registered Senior Member

    Messages:
    3,485
    As much as I would love my student loans to disappear, I think it would have virtually no effect on the flailing economy. People are worried about not having a job next month and trying to keep their house, paying off your student loans is probably on the back burner as you decide what to spend your money on. However making college practically free might stimulate the economy as many parents wouldn't have such a huge lump of cash to pay for their kids to go to school.
     
  12. Michael 歌舞伎 Valued Senior Member

    Messages:
    20,285
    OMG I'd love my Ss loan to disappear. Living in AU i'm not sure if it'd stimulate the US economy but meh, I'm in, game on

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  13. cosmictraveler Be kind to yourself always. Valued Senior Member

    Messages:
    33,264
    No, but getting rid of companies that were bad would be a very good start. Let them go bankrupt, do not let them exiost again with a bailout, let the good companies prevail and , in time, things COULD get better. Throwing good money after bad isn't helping anything but the corrupt and greedy.

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  14. TimeTraveler Immortalist Registered Senior Member

    Messages:
    3,023
    You just contradicted your own argument. You say forgiving debt wont make people invest, so you are for having people pay their debts and have no money to invest with? The only way people will have money to invest is if we give people some form of debt relief. You are delusional if you think people in this economy are hoarding money, who? Bill Gates? Donald Trump?
     
  15. TimeTraveler Immortalist Registered Senior Member

    Messages:
    3,023
    What about throwing good money after good? Investing in good people who did the right and responsible thing? There is no way to stimulate the economy without government investment. The government has to invest in something. I think the government should invest in it's most responsible people and then tax them later to get the money back. This could mean debt relief for student loans today so students can graduate, start businesses and get rich, then once they get rich the government can step in 10 years from now and tax them to make them give back. I'd support this idea, how bout you?
     
  16. swivel Sci-Fi Author Valued Senior Member

    Messages:
    2,494
    Colleges are great for the people intelligent enough to earn a living that will pay off the debt. Just as home-ownership works for people who work hard enough to pay off that debt.

    The problem is, we are promoting college for everyone, especially those who do not have the mental acuity to make it all the way through school, or get the kind of high-paying job necessary to pay off their debt. It is no different than the promotion of home ownership directed at the financially decrepit over the past 10 years or more.

    Do you really think that smart kids would stop going to college if we quit shoving the option down everyone's throats? Yeah... me neither. Smart kids will go to college and kids with other talents will go a different route, not wasting their time or becoming saddled with a debt that harms them in a competitive global market.
     
  17. TimeTraveler Immortalist Registered Senior Member

    Messages:
    3,023
    Many intelligent college graduates who don't dedicate their lives to making money should be given other options. If we are supposed to save the world from climate change or whatever, we cannot all be greedy assholes, some people have to study psychology, history, philosophy, even theology, sociology, linguistics and all that.
     
  18. darksidZz Valued Senior Member

    Messages:
    4,924
    Wouldn't this cause colleges to have financial problems?
     
  19. StrangerInAStrangeLand SubQuantum Mechanic Valued Senior Member

    Messages:
    15,396
    Would giving more money to the rich stimulate the economy?
     
  20. swivel Sci-Fi Author Valued Senior Member

    Messages:
    2,494
    Most of those fields are best studied outside of college. Studying psychology, history, philosophy, linguistics or sociology inside of a college right now will hamper your ability to contribute to those fields.

    They are still teaching Meade's bullshit in sociology and anthropology. Research that has been completely debunked is still cannon.

    They are still teaching Jung and Freud in psychology, even as history. And the addictive nature of these theories harms the brains of those who absorb them.

    We still teach that Chomsky matters in linguistics, even though his theory has been proven wrong with several anthropological finds, and his theory was never good for any second-order sentence construction anyway.

    History courses still teach that Columbus set out to prove that the world was round, a myth concocted many years later here in the States. Not only have we known the world was round since times BC, we have approximately known the size of the Earth using simple geometry, and the Chinese circumnavigated many years before Columbus set sail.

    For an example of what a philosophy course will do to a brain, check out our own philosophy forum. Holy. SHIT!

    The people that are going to move us forward are going to drop out of college in frustration because they are moving too slow and revolutionize their fields from without. Look at Judith Rich Harris for an example.
     
  21. StrangerInAStrangeLand SubQuantum Mechanic Valued Senior Member

    Messages:
    15,396
    Is it fair that rich people can't get food stamps?
     
  22. cosmictraveler Be kind to yourself always. Valued Senior Member

    Messages:
    33,264
    The average college professor at a middle to upper level college earns well over 150,000.00 US yearly, perhaps they could ask to reduce their earnings first? Why is it the students should have to shoulder the burden for the salaries are what cause the problem to start with. :shrug:
     
  23. ElectricFetus Sanity going, going, gone Valued Senior Member

    Messages:
    18,523
    Overblown.

    http://en.wikipedia.org/wiki/Professor_Emeritus

    Rank Lowest median[18] Highest median[18] Overall median[17]
    Assistant Professor $45,927 $81,005 $58,662
    Associate Professor $56,943 $98,530 $69,911
    Full Professor $68,214 $136,634 $98,974
     

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