Comment by sanderjd | Hacker News Reader

Comment by sanderjd | Hacker News Reader

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It's important to remember when talking to friends, that people are the heroes of their own stories and have a naturally biased perspective.

For my entire twenties, I could have been one of your friends complaining about the burden of my student loans. Nowadays I complain about the burden of my mortgage. But in both cases I got loans for valuable things on very reasonable terms. Just because I feel personally burdened does not mean it's a crisis for society.

It also doesn't mean nothing should ever be done. Personally I think income based repayment is a great policy. Maybe we should make that more generous for its current beneficiaries can't afford housing or families at its current level (anecdotally that wasn't the case for my friends who took advantage of the program, but it's a statistical question and I don't know the answer).

But many people seem to act like blanket forgiveness is the only workable or fair policy, and I'm just not convinced.

Here’s some research showing loan forgiveness would be a net boon on the economy

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

Interesting!

But my criticism is not based on whether or not it would be a boon or a hindrance to the economy...

what would it take, quantitatively, to alleviate any concerns with this policy of forgiveness?

Unfortunately it would require knowledge of the future. My concern with the policy is that I believe it creates perverse incentives that encourage a continuing spiral of more costly higher education, resulting in more debt, and unpredictable periodic political battles over "one-time" forgiveness.

If you could come back from the future and say "that didn't happen, instead it gave college graduates the breathing room they needed to become politically engaged and they successfully pushed for permanent solutions to the problem of increasing costs and debt", then I'd be happy to take the L!

Or perhaps if you could find an analogous country where a one-time blanket forgiveness led to more foundational improvements to the financing of higher education in that country, that would help alleviate my concerns.

But barring that analogous country that already did this (which I don't think exists because, as you've noted, our current system is weird and different than how it works elsewhere), I don't think there's a quantitative answer to this question, because that's just not where my concern lies.

And I believe the opposite. So where is your proof? You seem to be doing a lot of pearl clutching

Ok so here's the belief I think you must be saying you believe the opposite of:

> I believe it creates perverse incentives that encourage a continuing spiral of more costly higher education, resulting in more debt, and unpredictable periodic political battles over "one-time" forgiveness.

So you believe that forgiving loans will instead create good incentives that lead to lower costs for higher education. Can you explain the mechanism by which you think that would happen? I've described how I predict people would behave, but I'm curious how you think it would shake out.

A net boon says nothing about who are the winners and losers.

If I steal 100K from you and turn it into 110K for me, that is a net gain. However, you might not find it very favorable.

Did you read the paper? It’s very much not an argument for Peter robbing Paul. Unless you’re saying investing in people’s education is robbery?

I read maybe a quarter of the paper and I guess I'm saying both.

It's robbing Peter to pay Paul. Someone with student debt gets relief and greater spending capacity and everyone else just get some more national debt and higher interest rates.

It is all upside for one party and all downside for the other. As the paper states, GDP goes up, but less than the total cost over a 10 year horizon.

Forgiving 1.4 Trillion debt is predicted "Over the 10-year forecast, the policy generates between $861 billion and $1,083 billion in real GDP.

Now GDP doesn't equal federal revenue so you are really looking at adding $1.4T debt for a fraction of $1T in returns.

To address these other concerns, checkout out podcasts like pitchfork economics or freakanonics. There’s no reason to think interest would go up. That’s just concern trolling from republicans

It says so in the paper you have been linking everywhere

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