No Student Loan Fogiveness
There is no scuch thing as cancelling debt, unless you declare bankruptcy. So the stupidity eminating from the left wing idiots like Shumer, Warren and the SQUAD are pushing this agenda to cancel student loans. Why?? This is merely shifting the debt from irresponsible lazy people to working US taxpayers who always pay their bills because the government makes you pay income tax from every paycheck
Biden already cancelled $32 billion of student debt with his illegal executive orders without cogressional oversite. Now we the People are already paying for the loans.
Canceling up to $10,000 in federal student loans per borrower would cost the government roughly $245 billion, according to the Committee for a Responsible Federal Budget (CRFB). If income caps were implemented to limit forgiveness to folks with lower incomes, that would only drop the CRFB’s estimate to about $230 billion.
But what exactly does “cost the government” mean? Canceled federal student loans would be immediately added to the federal deficit, which measures how the country owes more money than it takes in during a year.
Analysts agree that canceling federal student loans would increase the deficit. But what they’re split on is how significant that addition would be, and how the government could eventually recoup the costs.
How Reducing the Deficit Can Eventually Fall on Consumers
Some express concerns about the negative effects that large amounts of national debt can have on the economy, including making it vulnerable to rising interest rates and increased inflation. But others claim that our government has run on a deficit every year since 2001 without many adverse effects, and we wouldn’t see much of an impact from canceling student loans.
The federal government had a $2.8 trillion deficit in fiscal year 2021, much of which was comprised of Covid-19 relief spending, including stimulus checks and emergency rental assistance. The deficit amounted to approximately 13% of GDP and accounted for the second largest deficit since the end of World War II.
To put that in perspective, deficits over the last five decades have averaged just 3% of GDP. The higher that percentage is, the less likely the country will be able to pay back its debt and is at a high risk of default—and default could cause mass panic in the global financial system. The CRFB’s estimate of student loan cancellation costing $230 billion would add less than 1% of the 2021 deficit overall.
A recent report by the U.S. Government Accountability Office (GAO) warns that current federal spending is at an unsustainable level and puts the country’s financial health at risk.
The government has two options to reduce the deficit: Decrease spending or raise taxes. That, according to some policy analysts, is how the cost will eventually make its way to the general public.
“There are trade-offs and it’s quite likely that if we spend this money on forgiving student loan debt we won’t spend it on other things we want to see the government do,” says Sandy Baun, nonresident senior fellow at the Urban Institute.
Spending cuts could potentially slash some of the most important social programs in the country. In 2020, the Congressional Budget Office (CBO) released a report of various strategies the federal government could use to lower its deficit. These included cutting down on vital programs, including eliminating free and reduced school lunches or raising the full retirement age for Social Security.
That means some of Biden’s social initiatives, like universal Pre-K or guaranteed parental leave, could have a tough time becoming law in the future.
Raising taxes to increase revenue could also have an impact. Not only could individual income tax rates be increased, but the CBO report suggested decreasing or repealing popular tax credits and deductions, including limiting deductions for charitable giving, as steps the government could take to increase revenues. President Biden has vowed to not raise taxes on the middle class, but what future administrations could do to rein in the deficit remains to be seen.
As of now, the White House says a decision on federal student loan cancellation will be made before the last payment pause ends on Aug. 31. If Biden chooses to forgive $10,000 to $50, 000 in federal student loans per borrower, it’ll add hundreds of billions of dollars to the national deficit.
Currently there are over 10 million jobs available and these students should consider applying for them or go into the military, then they can pay off their own debts, just like nomal American citizens do. So, Biden if decides to grant loan forgiveness, which would be up to a $1 trillion, then the fair thing to do is give the same amount to rest of the Americans who did pay their student loans, which would be up $15 trillion.
NO LOAN FORGIVENESS PERIOD. NO MORE SPENDING.
Biden already cancelled $32 billion of student debt with his illegal executive orders without cogressional oversite. Now we the People are already paying for the loans.
Canceling up to $10,000 in federal student loans per borrower would cost the government roughly $245 billion, according to the Committee for a Responsible Federal Budget (CRFB). If income caps were implemented to limit forgiveness to folks with lower incomes, that would only drop the CRFB’s estimate to about $230 billion.
But what exactly does “cost the government” mean? Canceled federal student loans would be immediately added to the federal deficit, which measures how the country owes more money than it takes in during a year.
Analysts agree that canceling federal student loans would increase the deficit. But what they’re split on is how significant that addition would be, and how the government could eventually recoup the costs.
How Reducing the Deficit Can Eventually Fall on Consumers
Some express concerns about the negative effects that large amounts of national debt can have on the economy, including making it vulnerable to rising interest rates and increased inflation. But others claim that our government has run on a deficit every year since 2001 without many adverse effects, and we wouldn’t see much of an impact from canceling student loans.
The federal government had a $2.8 trillion deficit in fiscal year 2021, much of which was comprised of Covid-19 relief spending, including stimulus checks and emergency rental assistance. The deficit amounted to approximately 13% of GDP and accounted for the second largest deficit since the end of World War II.
To put that in perspective, deficits over the last five decades have averaged just 3% of GDP. The higher that percentage is, the less likely the country will be able to pay back its debt and is at a high risk of default—and default could cause mass panic in the global financial system. The CRFB’s estimate of student loan cancellation costing $230 billion would add less than 1% of the 2021 deficit overall.
A recent report by the U.S. Government Accountability Office (GAO) warns that current federal spending is at an unsustainable level and puts the country’s financial health at risk.
The government has two options to reduce the deficit: Decrease spending or raise taxes. That, according to some policy analysts, is how the cost will eventually make its way to the general public.
“There are trade-offs and it’s quite likely that if we spend this money on forgiving student loan debt we won’t spend it on other things we want to see the government do,” says Sandy Baun, nonresident senior fellow at the Urban Institute.
Spending cuts could potentially slash some of the most important social programs in the country. In 2020, the Congressional Budget Office (CBO) released a report of various strategies the federal government could use to lower its deficit. These included cutting down on vital programs, including eliminating free and reduced school lunches or raising the full retirement age for Social Security.
That means some of Biden’s social initiatives, like universal Pre-K or guaranteed parental leave, could have a tough time becoming law in the future.
Raising taxes to increase revenue could also have an impact. Not only could individual income tax rates be increased, but the CBO report suggested decreasing or repealing popular tax credits and deductions, including limiting deductions for charitable giving, as steps the government could take to increase revenues. President Biden has vowed to not raise taxes on the middle class, but what future administrations could do to rein in the deficit remains to be seen.
As of now, the White House says a decision on federal student loan cancellation will be made before the last payment pause ends on Aug. 31. If Biden chooses to forgive $10,000 to $50, 000 in federal student loans per borrower, it’ll add hundreds of billions of dollars to the national deficit.
Currently there are over 10 million jobs available and these students should consider applying for them or go into the military, then they can pay off their own debts, just like nomal American citizens do. So, Biden if decides to grant loan forgiveness, which would be up to a $1 trillion, then the fair thing to do is give the same amount to rest of the Americans who did pay their student loans, which would be up $15 trillion.
NO LOAN FORGIVENESS PERIOD. NO MORE SPENDING.
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