Senate Minority Leader Chuck Schumer (D-N.Y.), speaking to reporters on MondayDec. 7, reaffirmed his intention to forgive the substantial student loan debt even though evidence indicates that paying off student debt is very costly to the state and ineffective in boosting the economy.
Schumer, reaffirmed his position and expressed his willingness to pressure the federal government to take on the enormous debt that weighs on thousands and thousands of Americans. Assuming that Democratic candidate Joe Biden will be the new president, Schumer made an express request that he use his power as the highest authority to get rid of the debt on the first day of work, even skipping Congress.
“We have come to the conclusion that President Biden can undo this debt, can forgive $50,000 of debt the first day he becomes president,” Schumer said on Monday, speaking to reporters outside of his Manhattan office, according to Fox Business. “You don’t need Congress. All you need is the flick of a pen.”
As detailed by the Democratic leader, the president has the power to forgive up to $50,000 of student debt for each borrower.
Biden, presented in May 2020 as part of his proposal for CCP Virus relief, a project that includes a cancellation of up to $10,000 in student loan debt. According to the bill, the government would also cover monthly loan payments for people with private student loans until September 2021.
In an opinion piece published last week Schumer invited Biden to take a more socialist stance, and go as high as $50,000 with debt forgiveness.
The argument used by the Democrats to cancel the debt is alleged economic stimulation. However, a recent study published by the Committee for a Responsible Budget indicates that paying off the student debt, as the left-wing liberals intend to do, would cost the United States $1.7 trillion, but only 90 billion real dollars would be injected into the economy. This implies a very high cost for the state, in exchange for a small benefit.
Outstanding student loan debt has doubled over the last decade, approaching the massive figure of $1.7 trillion. About one in six American adults owes money for school debt.
The report is very clear and states, “There are a number of benefits and costs associated with canceling student debt. But as a stimulus measure, its ‘bang for buck’ is far lower than many alternatives under consideration or the COVID relief already enacted.”
Another critical point that the report makes is that student debt cancellation is misdirected. Given that three-quarters of student loan repayments come from the top 40% of the population, who would likely be inclined to save the extra money rather than spend it unlike lower-income earners. This is not efficient for the purposes of reviving the economy.
A recent survey by the Pew Research Center shows that most of the economic suffering from the crisis is concentrated among the less educated. This shows where aid should be concentrated.
The cancellation of student loan debt would also add to the huge and growing national fiscal deficit, which totaled a record $3.1 trillion by 2020.
In the face of so much evidence, one might ask, how far does the left intend to go with these crazy proposals? Is it really in their interest to boost the economy, or is their ultimate goal to reach a free, state-run education for mass indoctrination?