Christmas is approaching and many politicians want to give the American people a big gift: canceling student loans.
The problem with this gift is it’s more like a giant lump of coal.
The federal government cannot just “cancel” millions of dollars of debt—taxpayers will just pay it off instead of the people who incurred the debt. And with a country where only 35% of adults graduate college, the government is forcing the other 65% who never received a college education to pay for their debt… not to mention those who paid off their student debts properly, or those who received a college degree but never even took out student loans.
To add fuel to the fire, the egregious cost of higher education is largely due to government subsidizing universities in the first place, instead of allowing universities to compete in a free market.
So basically, the government’s plan is to give out huge loans to teenagers, then when they can’t pay it off, to increase taxes on everyone else to pay off that debt. (Solid… right?)
Why do politicians always champion bad economic policy?
So-called progressive politicians are always trying to look out for the little guy—like when they raise the minimum wage and get people fired, or when they cancel student debt and force people who never went to college to pay off others’ student debt.
A recent FEE article summed it up well:
For one, progressives claim to be champions of the working class who simply want to use the government to help uplift society’s most vulnerable. Yet with student debt cancellation, liberal politicians are prioritizing the interests of a relatively privileged and well-off segment of their constituency.
That’s right: Taxpayer-financed student debt relief is actually a regressive policy, which means that it disproportionately benefits the wealthy…It would mean forcing Steve the landscaper to pay more in taxes so Jenny the marketing executive can have some of her student loans written off.
So why are the “champions of the poor” petitioning for a policy that hurts working-class americans?
Well, perhaps it’s because they didn’t read Tuttle Twins growing up…
If they had read books like Tuttle Twins and The Messed Up Market, example, they would know that artificial interference in a market only drives up the price of a service (like higher education). Politicians would also understand the damaging effects on making some people pay for things that benefit other people.
This is why, when people ask me what the age range is for the Tuttle Twins books, I typically respond: “They’re for kids age 5 to 11… and members of Congress.”
Hopefully, this Christmas, the American public doesn’t get a lump of coal in the form of even more bailouts.
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