An old adage attributed to Will Rogers goes, “If you find yourself in a hole, stop digging.
As Joe Biden’s approval ratings hit a new low, Democrats seem determined to ignore this sound advice. Take, for example, Monday The New York Timesin which Sen. Elizabeth Warren argues that the best way to avoid midterm losses is for Democrats to “execute our agenda more…”
The idea of doubling down on a losing hand seems like dubious, if predictable, advice. Among Warren’s worst recommendations is “student debt cancellation – something the president could take entirely on his own.”
Now Democrats disagree on how much would be forgiven, but some have called for eliminating everything student loan debt. Others, like Senate Majority Leader Chuck Schumer, call to cancel up to $50,000 per borrower. (In the 2020 race, Biden campaigned to forgive $10,000 in student loan debt per borrower.)
Leaving aside the question of whether the president actually has the unilateral power to cancel student debt (Speaker of the House Nancy Pelosi says he doesn’t) – it looks increasingly like Biden will, once again, try to overstep his executive authority. In a recent episode of the Pod Save America podcast, White House press secretary Jen Psaki confirmed that the idea was “still on the table‘, noting that the current moratorium is ‘either going to be extended or we’re going to make a decision…on canceling student debt’.
I don’t expect Democrats and liberal commentators to want to hear this, but it’s a bad idea, both substantively and politically.
Let’s start with the background. Academic research suggests that canceling student debt helps the rich more than the poor. Some people owe a lot of money, not because they are poor, but because they were rich enough to make bad bets. That is, they took out a loan to buy what they thought was a valuable investment that would pay dividends later (about half of all student debt is for graduate school).
As the Brookings Institution Adam Looney noted“Medical school graduates typically owe six-figure student loans, but that doesn’t mean they’re poorer than high school graduates who didn’t go to college.”
Should the person with the big loan from medical school (for a degree that will earn them millions over their lifetime) be forgiven, while the community college student who worked nights and weekends? ends up to pay for his studies gets nothing?
On top of that, canceling student debt would only perpetuate our current system (corrupt or flabby, the choice is yours). In the higher education bubble, the value of most college degrees has not kept pace with soaring costs.
If higher education existed in a truly free market, this mismatch would force prices down and/or encourage lower-cost online learning, community colleges, suburban schools, vocational training, and apprenticeships.
Instead of allowing this bubble to burst, canceling student loans would only further disconnect colleges from the consequences, thereby reducing any tenuous relationship that exists in higher education between supply and demand, while ensuring that no reform will be adopted.
Simply put: Nearly unlimited government-backed student loans have contributed to schools’ tuition fees rising exponentially, even as students have racked up unsustainable debt, often for hugely expensive degrees. To forgive student loan debt, while leaving this ridiculous system in place, is madness. We’ll be back in that situation in about a decade, tops.
These are the main reasons why canceling student debt is a bad idea. The political reasons are much less debatable.
Of course, people like to receive free money, and there is about 43 million people who are the “winners” of this policy. At the same time, this policy does not provide any relief for those who have a mortgage, car loan or business loan. It also won’t help people who didn’t have the money to send their kids to college, or people (like me) who took out a loan and have already paid it off.
“Either way, rather than serving as a lifeline for Democrats…the focus on canceling student debt could also be seen as a tacit admission of electoral desperation.”
All of these people will feel that this policy is unfair and that they have been misled. And of course they will be right. Because this policy benefits people who have gone to college, it is predictable that working-class Americans will see this as another example of a rigged system that benefits the children of the elites.
What we are left with is a policy that spends a lot of money, perpetuates a broken higher education system, and probably pisses off more people than it wants.
So why would Democrats do this? For progressives blinded by ideology, this makes perfect sense (both substantively and politically).
On the one hand, it rewards people like them. The higher your level of education, the more likely you are to have “consistently liberal political values.”“As such, canceling student debt could be seen as a concession to a key Democratic constituency.
But it’s not just about rewarding other elites. Senator Warren also argues that a higher percentage of “black and Hispanic borrowers” are going into debt. Warren does the dubious claim that by doing this, “the president could make significant strides in closing gender and racial wealth gaps.” But suppose she’s right. It could be seen as either an altruistic attempt to level the playing field for the historically disadvantaged — or a redistributive concession to a key part of the Democratic coalition — or both.
Either way, rather than serving as a lifeline for Democrats (as Warren suggests), the focus on canceling student debt could also be seen as a tacit admission of electoral desperation.
In other words, it looks like a sign that the Democrats have resigned themselves to losing the 2022 midterms and are trying to rationalize (a) getting all the progressive “wish list” items done before losing. the majority; and (b) abandoning attempts to persuade swing voters, while pinning all their hopes on grassroots turnout.
NBC News recently compared the polls starting in 2018 (a great mid-term year for the Dems) with its own 2022 poll. What they found is that college-educated women are the only cohort become bluer.
In a scenario where Democrats have given up on persuasion and only hope to mitigate their losses in the medium term, it might make sense to focus on arousing and transforming the one demographic segment that got After College-educated Democratic women, regardless of the long-term consequences.
Once again, Democrats must decide whether to bend to their base or pursue more moderate policies that could draw persuasive voters into the middle. It is a constant tension in politics. But when the going gets tough, Biden always seems to yield to the left. The results weren’t very good.
Joe Biden started digging this hole last year when he decided to ignore his term and tried to become the next LBJ. Instead, it heads for the scrap heap of a forgettable term.
Biden’s numbers keep dropping. And he comes. Won’t. Stop. Digging.
Progressive Representative Pramila Jayapal tweeted this weekend“Student debt cancellation is racial justice. Student debt cancellation is gender justice. Student debt cancellation is economic justice.”
I don’t know, but I do know this: Canceling student debt is bad policy and an absurd solution to a serious problem. And even if Biden goes all the way with the cancellation, I highly doubt that will save Democrats at the polls in November.