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Comment by sanderjd | Hacker News Reader

Sometimes band-aid solutions mess up the incentives to fix underlying problems. Personally, I think this is one of those times. It's like the debt ceiling thing; once you set the precedent that a problem can be "solved" by kicking it down the road until after the next election, there is essentially no incentive for anybody to ever fix it for real.

This is not a problem that is going to be solved by injecting more unaccountable government cash into the system. Students would just take on more debt, expecting more forgiveness, and schools would thus simply continue raising prices. Why would anybody do anything differently?

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I dont even know where to start with this. How many times do we all have to have this same conversation. “Student loans being forgiven does not increase inflation, as no new money is being injected into the economy”. It’s either spent before being collected, or spent after being collected by the gov”.

Guys, seriously, we’re not talking about people taking loans out to do blow and hookers, they’re trying to get an education. You’re all acting like we’re just going to give out forgiveness and then throw our hands up and doing nothing after that.

I'm not sure you responded to the right comment here? I didn't say any of the stuff you seem to be responding to.

Maybe you're responding to what I said about unaccountable government cash? But you seem to be thinking I'm saying it's the students who lack accountability and whose incentives are screwed up by the government cash?

That's not it at all, it's not the students' incentives that are a mess under the current system and an even worse mess under the perpetual forgiveness system. It is schools whose incentives are messed up. They have no reason to keep from raising tuition and fees indefinitely because they are guaranteed to be paid. It's that problem that setting a precedent for forgiveness makes worse.

It has nothing to do with what people with student debt spend their money on.

Then nationalize the schools like every other major OEDC nation. This isn’t rocket science. I swear this country sometimes.

That's one potential solution, I'm not against it a priori, but would be interested in the exact details of it.

But it is not the only potential solution.

But the availability of other actual potential solutions does not make the non-solution of one-time blanket forgiveness that we're discussing here any more appealing to me.

Here’s some research that supports it

https://www.levyinstitute.org/pubs/rpr_2_6.pdf

Supports what? That paper seems to be narrowly about the economic impact of loan forgiveness, not about nationalizing higher education or about other potential solutions to the causes of student debt.

Pardon, this was deeper linked, but your previous comments describe the overall forgiveness as a bandaid, or generally not helpful. That is not supported by the research.

I do think it is a bandaid and generally not helpful, even if it is not economically damaging. Economic benefit or damage is only one aspect of the question.

This is why this country will always be crabs in a bucket

Why? Because a lot of people don't support counter-productive band-aids and would rather advocate for policies that solve actual problems? That doesn't seem like our issue to me...

The USA has public schools; what do you want?

College, Education, training, viewing people as our greatest assists. This is America, we can do it

Our public colleges are essentially privately funded at this point. The amount of public funding in most states (with a small number of notable exceptions) is very small.

What you are describing is called "moral hazard". When the incentives of a program or law encourage more bad behavior by removing risk it is a moral hazard.

Don't worry, sugar daddy government's got your back Jack.

Also, "perverse incentives".

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