Bernie Sanders wants to cancel all student loan debt and make college free.
Elizabeth Warren wants to cancel most student loan debt.
And other democratic candidates want similar goals.
This is stupid.
Let’s talk about why.
Our 2020 Candidates Thoughts on Student Loans Are Just As Stupid As You Would Imagine
Since the democrats have five thousand candidates this season, I will be focusing solely on two: the Syphilis Bern and Pocahontas.
So here’s how it will supposedly work: Bernie Sanders will cancel all the US student loan debt by taxing market trades (stock trades, options, et cetera). Warren will do a wealth tax on the ultra-wealthy to pay for it. Both will have to raise taxes to create free tuition eventually, regardless.
Why did I say this was stupid? Well, a few reasons. And by “few” I mean about 30 described below.
First off, the cost projections are flat out wrong to anyone with a semblance of understanding about government finances. Costs will skyrocket if government sticks its hands in the mix, as it always does. With government funding, colleges will simply sponge more money out of us. The exact same thing that happened when federal student loans became a thing.
Both of these plans also have the lovely benefit of simply increasing tax on the wealthy as their means of paying for it. It will eventually cost the middle class, but let’s ignore that for now. (More below).
The tax on the wealthy is still to work forever. Wealth taxes never hold up long in countries, as the ultra-wealthy just leave the country to avoid the tax. Dis-incentivizing investment and money expenditures.
But Bern’s plan also has the lovely benefit of screwing over the entire stock market. Who is going to invest in stocks when the chance of making a profit is already diminished, and will be further drove into the ground by additional tax costs?
It will practically eliminate daytrading—rendering it impossible to swing trade in most circumstances as well.
The best way out of poverty is through investing, and by taxing that you’re not just hurting the wealthy. You’re hurting the intelligent poor and middle class that are trying to claw their way up the social hierarchy that you have already regulated to practically impossible heights.
So goodbye investments. Goodbye chance for low and middle income Americans from making a sustainable increase in their income year over a year without fifty thousand extra tax demands.
A decrease in investments tends to correlate with an increase in another economic field: consumption. If you can’t save, might as well spend. Further hurting the potential long-term benefits of savings for the average American. More materialism, more useless junk purchased. Less money saved for retirement. Less money invested in future endeavors and enterprises.
Not only does this have financial implications, it also showcases blatant disregard for learning a key adult trait: responsibility. Why ever contribute or work toward everything if Daddy government can always come to the rescue and pay off your bad mistakes?
Does no one take responsibility for their own actions anymore? How can a society sustain itself as open-mouthed babies constantly crying for help?
Bernie has also made a lovely appeal to women’s rights in his student loan shenanigans.
He said “women owe two-thirds of student loan debt.” And he’s right.
But why should men have to bail out these strong independent women? Surely they can handle it.
In fact, women (as a group: read, not all) are already tax negative. So why exactly should men also be forced to front the cost for their education?
So my question to the Bern: why should men be forced to shoulder this additional impact due to women’s inability or odd desire to take out more in student loans?
Can we take a minute to discuss how this entire strategy totally screws over those who paid for school and now also have to pay for others to go to school for free? IE: Me?
I went into debt for school. But I worked throughout too. And paid it off. Why do I now have to pay for others as well? Talk about a double hit.
Before it’s said: yes, it will be a double hit. There is no way for this “wealth tax” to be sustainable long-term. Nor will the stock trades be sustainable as a source of revenue either as the costs increase as described above.
Additionally, Bernie’s plan makes even less sense because, as trading becomes more expensive, it will decrease. Daytraders won’t be doing the majority of trades anymore, so he won’t be making the anticipated money he assumes. It’s not possible for them to make those trades at heightened tax prices. So, new taxes will come in. It can’t be done with just a onetime tax on the wealthy. The majority of the tax comes from the middle class. They will have to pay it, just like every other country where “free” education is a thing.
And let’s face it: college is 95% garbage and 5% okay information. That 5% could also be more effectively learned through other means, such as for free online. Yet it would still be just as educational. Also potentially without the inherent political biases of college (any surprise the left wants it to be free?).
Government should not control education. If it holds the money, it holds the doctrine. Education was and always should be the free exchange of information, not government mandated indoctrination due to federal funding.
Student loans themselves are the beastly result of this government oversight. Colleges are greedy and will drive up prices knowing that the government loans are guaranteed sources of income. Instead of being efficient like a business, they become bloated like a fat pig who keeps getting fed indiscriminately.
These plans just further incentivize the stupid investment in colleges that are proving more useless by the year. It will cause more inflation. And it will cause colleges to charge more, expecting future student loan bailouts.
A true student loan correction would be to write off student loans, but make the colleges and banks pay for it. That would be something I’d be all for. Screw the colleges.
Modern education will become more multifaceted in the age of technology. Trade, online/alternative colleges, certification classes, online sources, OJTs, and other different arenas will take the place of traditional schooling. It is the future, just like automation.
The old standard university piece of paper will become outdated. It already is. And these proposals will expedite it. Further driving down the value of current degree holders.
Fewer people should go to college, not more. More should begin the pursuit of these alternative routes. You don’t actually learn much in college, anyway. This, coming from someone with a M.A.
Most kids should wait until they’re older so they know what they actually want to do instead of spending six years on the taxpayers’ dime.
Most 18-20-year-olds don’t have a clue what they actually want. Besides drinking and partying, of course. Yet the democrat candidates seem to want the taxpayers to support the debauchery.
This storm creates a perfect way to further encourage “forever students”. Hell, maybe I’ll go back to get a PhD or two and these guys can pay for it for me.
But the most ironic part of all of this? Erasure of the debt won’t make you more employable. Your liberal arts degree is still useless.
Yet, these proposals are excellent ways to prop up more incentives for students to study these low demand crazy-person fields. If you don’t have to pay for it, what skin do you have in the game?
We don’t need nor want more gender studies majors.
History has proven a few things with free college tuition:
One, it does end up hurting the middle class as the costs increase and it is unsustainable without a tax on the majority of the population (us, middle class). Regardless of who the politicians say they will tax. This furthers the already extreme income inequality gap between the rich and the poor.
Second, it incentivizes colleges to lower standards so they can get more free money from the government. This reduces the quality of the degree for past and future degree holders.
If the school can just curve more grades to keep more students, they keep getting a higher paycheck. Easy money. Easy business.
Third, it increases colleges costs since more students equals more faculty, staff, equipment, space, dorms, security, etc.
Fourth, it diminishes the worth of the degree. Everyone will have one. It will simply be the new high school, with 4 extra years, a lot of taxpayer’s money, and minimal education gained. (Hint: no one is actually more intelligent after college).
This diminished worth of degree holders is already happening due to so many people going to college. Now, M.A.’s are the 1970s B.A.’s.
Fifth, you subsidize the wealthy through these strategies because those who go to become doctors and lawyers usually take the most debt, yet make the most income. They don’t have to pay loans and they make 100’s of G’s a year. Lovely idea of “helping the poor”. (Warren’s proposal at least prevents this, I’ll give her that much).
Additionally, most of the ultra rich would just send their kids to private universities where the degrees would still matter. Or just buy their way in.
To cap this off, all of my arguments here hover around the idea that socialism is not sustainable forever. Financially, it’s impossible.
Eventually, we will run out of other people’s money.
Bernie Sanders and Elizabeth Warren don’t care about this. They care about feeling good about their actions in the short term. Long term, it would hurt way more than it helped.
But luckily, we don’t actually have to worry about this. Because it’s all political posturing. They won’t actually do either of these things.
They just want the brownie points and for the gullible to buy in to their schemes. Just like Bernie did last election.
So fall for it, or don’t. It’s a stupid idea, regardless.