• Tue. Oct 20th, 2020

Monday Night Owls: Young Americans wouldn't be the only winners from canceling student debt

ByAdiantku

Sep 22, 2020

Night Owls, a themed open thread, appears at Daily Kos seven days a week

Alexis Goldstein at The New Republic writes—Canceling student debt will prevent irreversible wealth loss in younger Americans. But they’re not the only ones who would benefit:

There’s a looming student debt cliff awaiting us in 2021. With America in the teeth of the Covid-19–enabled economic downturn, lawmakers suspended federal student loan payments for 80 percent of federal student loan borrowers. This measure, which President Donald Trump extended a few weeks ago, is set to expire on New Year’s Eve, which means borrowers will ring in the new year by restarting their student loan payments in one of the worst job markets in a decade. If Trump truly wanted to give relief to the 43 million people with federal student loans, he could cancel student debt, using the authority Congress gave the Department of Education decades ago. Senate Minority Leader Chuck Schumer and Senator Elizabeth Warren have now introduced a resolution urging Trump to do just that.

The beauty of canceling student debt is that it has benefits that redound to just about everybody: Research shows it would create more than one million jobs a year, as well as providing a considerable boost to our gross domestic product. Student debt cancellation has sometimes faced criticisms due to widespread misapprehensions about the sort of people who would extract the largest advantages, such as wealthy doctors and lawyers. In reality, debt cancellation would have the biggest impact on those most impacted by the coronavirus pandemic: It would be a lifeline for the nation’s seniors and to the Black and brown communities. It would lessen the fallout of the permanent wealth loss this year’s graduating class is experiencing as the Covid-19 economic crisis intensifies. In terms of something we could do right now to safeguard the economy against the ravages of the virus, this move would go a long way to ensuring that several generations of Americans don’t get cast adrift.

When you think about who benefits from debt cancellation, you might not immediately think of older Americans—but you should. Millennials are far from the only cohort struggling with this burden. In fact, the share of borrowers over 60 with student debt has quadrupled over the last decade, making it the fastest-growing age bracket of student debtors, according to a 2017 report by the Consumer Financial Protection Bureau. In increasing numbers, seniors are carrying student debt loads later and later in life; in addition, too many have taken out loans to help pay for their children’s or grandchildren’s education. […]

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“A state of half-ignorance and half-indifference is a much more pervasive climate sickness than true denial or true fatalism.” ~~David Wallace-Wells, The Uninhabitable Earth: Life After Warming (2019)

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BLAST FROM THE PAST

At Daily Kos on this date in 2008—Three Times is Enemy Action:

James Bond’s wealthy nemesis may have had an obsession with gold, but he judged, quite correctly, that if people keep putting your plans awry, that was likely their intent.

In 1982, the same year John McCain entered the Senate, a bill was put forward that would substantially deregulate the Savings and Loan industry. The Garn-St. Germain Depository Institutions Act was an initiative of the Reagan administration, and was largely authored by lobbyists for the S&L industry—including John McCain’s warm-up speaker at the convention, Fred Thompson. The official description of the bill was “An act to revitalize the housing industry by strengthening the financial stability of home mortgage lending institutions and ensuring the availability of home mortgage loans.” Considering where things stand in 2008, that may sound dubious. It should.

Seven years later, the S&L industry was collapsing. What was the cause? Garn-St. Germain handed the S&Ls a greatly expanded range of capabilities, allowing them to go head to head with full service banks, but it didn’t give them the bank’s regulations. Left to operate in an anarchistic gray area, S&Ls chased profits, indulged in amazing extravagances, and cranked out enough cheap mortgages to fuel a real estate boom. They also experimented with lots of complex, creative — and risky — investments, even though they didn’t have the economic models to really determine the worth of the things they were buying. The result was a mountain of bad debts and worthless “assets.”  Does any of that sound eerily (or nauseatingly) familiar?

On today’s Kagro in the Morning show: Greg Dworkin draws the tough task of rounding up the RBG weekend. Plans for the next move begin hatching. Jared’s War Dogs-but-for-PPE team has a surprise whistleblower. A Mueller insider’s book details how & where Bobby Three-Sticks blew it.

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