Stockholm Syndrome occurs when captives or hostages express sympathetic sentiments about their captors after forming a bond. The victims develop positive feelings or possess a belief in the humanity of the criminals. Are the Democrats banking on this psychological alliance as part of their long-term strategy to secure the youth vote? Joe Biden and the Democratic leadership are proposing to forgive a significant chunk of student loan debt, but the debate surrounds how much to provide – up to $10,000 or up to $50,000? Either way, this public policy kidnapping will ensure that millions of young people will be shackled to the donkeys for years to come, producing an ample supply of Democrat governments.
$10,000 (or $50,000) Question
Biden has proposed to establish a program that offers relief for $10,000 of undergraduate or graduate student debt in exchange for every year of national or community service, such as work in government schools, public agencies, and non-profit organizations. But Senate Minority Leader Chuck Schumer (D-NY) wants to go big – or go to the executive order.
Speaking in a recent interview with Anand Giridharadas, Schumer recommended a progressive big-government agenda during the former vice president's first 100 days in the White House. Instead of achieving it in the legislative branch, Schumer suggests it can be done with a pen and a phone:
“I have a proposal with Elizabeth Warren (D-MA) that the first $50,000 of debt be vanquished. And we believe that Joe Biden can do that with the pen as opposed to legislation. It’s a big, bold agenda. My job is to get as much of that passed and get the votes for it, which obviously is not something I can snap my fingers and do.”
So far, Biden has not indicated he would agree to such an idea. But it would be incredibly popular on the left, especially considering that student loan debt is the second-largest form of household debt in the country, totaling $1.68 trillion. It might defy basic economics, but it is a smart long-term political strategy for electoral victory.
Joe Biden, the Economist?
When he was the vice president, Biden conceded that government subsidies have contributed to the student debt fiasco, telling a college audience that they "have impacted upon rising tuition costs. It’s a conundrum here."
He was correct since state-guaranteed finance artificially increases the demand for student loans. When the demand is unnaturally trumped-up, this raises tuition costs, forcing the government to spend more to help cover ballooning prices.
The other problem is that forgiving student debt will produce a moral hazard, comparable to bailing out Wall Street. This type of leftist policymaking will lead to reckless behavior. In this case, the insensible actions will be routinely enrolling in a post-secondary institution to study useless and unrewarding subjects, such as lesbian dance theory, gender studies, and drama. Taxpayers are forced to subsidize majors that will not lead to employment opportunities for most of the graduates, resulting in a large swath of graduating classes that are unproductive.
Private student loans can do far more for not only college attendees but also for the broader economy. Lenders would most likely tie financial aid to your degree. Put simply, there is no way a bank would approve a $50,000 student loan to study medieval poetry or art history. If it does, the interest rate would be sky-high. Instead, financial institutions would more likely grant student loans based on labor data, choosing to favor applicants who plan to take classes in computer engineering, architecture, or (cough) economics.
As Liberty Nation reported in January 2019:
"Student loans would mirror the demands in the labor market: If there is a sudden spike in the need for anthropologists, then the market would adapt accordingly. Banks need to know that the borrower will be able to repay the loan, which cannot be done with a piece of paper hanging on the wall in a dilapidated studio apartment paid for by working at Starbucks.”
Sorry, Ms. Marxist, there is not much demand for women’s studies bloggers complaining about the patriarchy. Of course, unless you apply for employment at MSNBC or CNN following graduation.
Fairness?
The Democrats are ostensibly the party of fairness and equity. But how is forcing taxpayers to subsidize student loans fair? It is not. What about the millions of Americans who have not attended college or university and chose to work in the trades and toil 12 hours a day repairing indoor plumbing? They did not make the irresponsible decision of attaining a $50,000 education, to quote Margaret Sanger. If approved, this is the continued disdain for the working class, or perhaps acceptance of big government and the idea that the stroke of a pen can reject elementary economic reasoning.
The Faustian Seduction
You might be wondering how much this would cost taxpayers. At this point, when the nation is $28 trillion in debt and an incoming administration plans to spend $11 trillion, does the price tag even matter? The left will attempt to rationalize this policy measure, arguing that it would stimulate the economy and remove the burden on households who can use the freed-up money to spend on big-screen televisions to watch CNN’s Brian Stelter and buy copies of Das Kapital. Should students fall to the seduction of the Faustian bargain, it will inevitably lead to Democratic victories at the national level all over the country because the party has almost guaranteed generational support. That is, until these folks realize that there ain’t no such thing as a free lunch. By then, the nation may have perished from extreme and perpetual hemorrhaging.
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Read more from Andrew Moran.
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