Every day we see another piece of foolishness paraded on national TV. Lately there’s been talk of “cancelling” American college grads’ student debt.
Man, the mind numbing amount of stupidity packed into that one little sentence “Cancel student debt.”
Let’s start at the beginning, with the notion of cancelling a debt. Guess what, you can’t do it. It’s a logical impossibility. Debt cannot be “cancelled.” All that can happen is a transfer of liability.
To cancel something is to make it not happen. Can you actually do that with debt? If I owe $1 000 000 on my house, and I get my mortgage holder to “cancel” it, is that debt gone? No, all that has happened is the liability for the $1 000 000 is transferred from me to the mortgage holder. This holds true for any debt.
So, by “cancelling” student debt, the liability for it is simply transferred from the debtor to the guarantor. And who is the guarantor of the student debt? Good ol’ Uncle Sucker, the government. Also known as the taxpayer.
Okay, you say, in my country college is free, the government pays for it (which is merely a fancy way of saying actual taxpayers pay it). Why shouldn’t the American government take on that debt.
How about because it’s worth over 1.7 TRILLION dollars? That’s greater than the value of the Canadian economy.
The United States is already seeing inflation rates not seen for 40 years. You want to turbo charge that, dump another 1.7 T dollars onto it.
Yes, transfer the burden of the debts of upper middle class twits to the working class. I’m sure blue collar kids who forewent college to become tradesmen will be happy to see their taxes raised, and inflation eat away their earning power, so woke hipster douchebags won’t suffer the consequences of their freely made life’s choices.
None of which even touches upon the moral hazard of relieving idiots of the burden of their own stupidity. You signed the papers, you pay the bill. If this contract is broken, then it creates a perverse incentive to run up more useless student debt in the pursuit of more useless degrees, under the assumption that if you whine hard enough about it, someone else will come along and pay it for you.
Cancelling student debt. An idea so truly stupid, you have to have a University Degree to think it’s a good idea.