The Self-Serving Policy Proposal Prize

We need a prize for the most self-serving proposal. A lawyer with large student loans has assembled a large group of friends on Facebook with the proposal “Cancel Student Debt to Stimulate the Economy.”

Ignoring the fact that this might reduce rather than increase the fiscal stimulus, it would reduce the burden on people who, if they attended public universities, have already received a large subsidy from the average taxpayer in the form of tuition far below the average cost of their education.

Moreover, given the high rate of return to human capital accumulated in the form of college education, the Facebook friends are soon likely to be at least in the upper quartile of the income distribution. This is a proposal that is one of the most regressive I have ever seen.

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  1. john says:

    And yet, even with this tax subsidy, the average college student graduates with 27,600 of loan-created debt, and many people from lower class backgrounds cannot even consider going to college due to cost.

    Not everyone can bootstraps through college with 3 jobs and perform well academically.

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  2. Chris says:

    I like my student debt … keeps me on the ground and makes me appreciate the value of education.

    Cancelling student debt will just degrade the value of a university education. Make them work for it!

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  3. Shaun Dakin says:

    All policy proposals are, by definition, self-serving. That you picked this one doesn’t mean that this is, in fact, self-serviing.

    The impact of this proposal is much larger, than say, the continuing farm subsidies that impact massive agro-businesses.

    And yet, these farm subsidies are presented as “saving the American family farm” when in reality the majority of payments go to massive corporations.

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  4. a_c says:

    True. If anything we should be taxing the socks off those students, because they have the temerity to aspire towards the upper quartile of the income distribution.

    Egalitarianism over all!

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  5. Hunter says:

    Not to mention that such a program might have the knock-on effect of reducing the size of the pool of loanable funds to prospective students, which would reduce the aggregate flow of revenue to colleges, which might reduce or eliminate salaries for economics professors at the U of Texas. ;)

    Just a thought.

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  6. anandine says:

    I proposeT. Boone Pickens’ attempt to get the state of California to subsidize cars made to use his fuel but nobody else’s and to get the state to install infrastructure for his delivery system.

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  7. Jason says:

    Why not cancel the debt? I have to buy stuff to survive anyhow. It would stimulate the economy. Actually bailing out the banks is the same exact thing as canceling student debt, but the banks got “canceled bank debt.” They aren’t students. That’s the only difference. What a joke this whole thing is. Give me, give me, give me! No longer can we work hard for a living and be able to afford the reality of it. I have a college education, 2 degrees and make good money. Buying a house is expensive. Pay off my house. I’ll stimulate the economy with the $ I don’t spend on my mortgage.

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  8. Brent says:

    You are right on sir. I always get a chuckle when I see students or young people wailing of the cost of school and about how tricky student debt is to manage. Relatvie to the value you receive these are fairly small. Rather than growing up and realizing we have to be serious about fiscal policy in this country, some young people with a college education choose to pursue politics in the same way our parents and grandparents did. However, We unlike our parents and grandparents do not have the luxury of a system that will remain solvent in spite of our fiscal games until after we are dead. The joke will be on us if we give ourselves free passes like our parents and grandparents chose to by not reforming Social Security and Medicare.

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