 I mean this has been rumored for a long time that Biden was going to do it. This was a big agenda of the Democratic Party for a number of years now. This is something that was expected. Biden was under a huge amount of pressure from the left wing of the party to fulfill this as an election promise. This is something that Elizabeth Wands of the world were pushing for and have been pushing for for a very, very long time. They really wanted, and Elizabeth Wands had proposed in her campaign, to do away with all student debt, to write it all off, to go down to zero. Ultimately what they really want is for the government to fund all education. Biden wasn't quite willing to do that. I think he even Biden, or at least his economic advisors, realized the devastating economic consequences of such a plan. Maybe they even have an inkling of the moral consequences, but I doubt it because it seems like almost nobody has those kind of inklings. So basically what's happened is if you make less than $125,000 in 2021 or 2020, if as a couple you made less than $250,000 during one of those tax years, you're eligible to write off up to $20,000 of student debt. That is government student debt, although almost all student debt today is government student debt. The $20,000 is available for those who had Pell Grants. Pell Grants are giving to low-income individuals. So Pell Grants are one of the things that they try to write off. If they really wanted to help poor people, if their goal was really just to help poor people who got a college education, they would have just written off all Pell Grants. I don't know what the number is there, but they just would have written that off. $10,000 is the cap for regular student loans that people get that were not Pell Grants. But there is this income issue. What to make of this? Well, it's horrible policy from every perspective. It doesn't really help the Democrats that much electorally other than they can say they fulfilled an election promise because most college graduates, most people who graduate from four-year colleges certainly, have college graduates vote Democratic overwhelmingly. Now, it is true that many of the people who are going to benefit from this may be more than 50 percent. It's not clear exactly. Don't actually have four-year degrees. They might have dropped out of college. They might have two-year degrees. They might be in college right now. They might be grad students who haven't graduated yet. But again, if you're grad students, you're probably a Democrat. So it's not clear that this is a huge political win in terms of buying votes. It suddenly fulfills an election promise, and you can say he did that, and the left is maybe more motivated to come out and vote for him because of it. But there's some huge costs here. Maybe they're not political, and maybe all they care about is politics. But there are economic costs, and there's a mass of moral costs here that are important. It's interesting because all you really hear from Republicans and conservatives about this is, or not all you hear, but most of what you hear is about the economic costs. It's going to cost the economy between $400 billion and $600 billion. Now, why is that? How do you measure that? What does it mean that it'll cost it? Well, what happens today is that students pay their loans back with interest. The government takes that money, and it spends it on other stuff. But it's going to spend it on other stuff anyway. So if the government suddenly is not getting that money because of this loan forgiveness, then it has to take on more debt in order to fund the stuff it's going to spend the money on anyway. Now, it's important to note that over the last, what is it, two and a half years now, student loans have not been repaid because there's been a moratorium on student loans that's put in place by Trump, another brilliant program by Trump, and never taken away. Biden's not going to take that away. I mean, supposedly it'll end in January, and at that point they'll write down the 10,000 or 20,000, however much it is. But students haven't been paying their debt, whatever that income the Treasury would have and has had in the past is no longer there. And as a consequence of that, by that amount, the Treasury has to borrow money and thus increase the deficit, increase the borrowing, suck money out of the private economy. They're not sucking money out of the private economy by taking it from students, this sucking money out of the private economy by selling bonds to whoever is willing to buy them. Either way, that's either way, it's harmful for the US economy. So you're exchanging one type of taking money out of the hands of individuals with another. But the deficit is increasing, the deficit has to be paid, future generations are either going to have to pay higher taxes or going to suffer from higher inflation in order to be able to get rid of all this debt that the government is taking on. A piece of which, small but a piece, a significant piece, is the student debt forgiveness that has passed. This is potentially inflationary to the extent that you believe that debt is, and the government's signaling to the world that it's never going to pay you back, it's debt. If you believe that is inflationary, then it certainly seems that this would be inflationary in a sense that it creates inflation expectations sometime in the future because if they don't pay back the debt, well then they're going to have to inflate. There's no other way to get rid of the debt. It's either through inflation or through default. There's no inflation default or paying it back, raising taxes. And what you're getting here is a declaration that we're never going to pay back the debt. We're forgiving that. So we're taking on more deficits. Government is never going to pay back its debts. That is potentially inflationary. So that's kind of the economic consequences. There's all kinds of mal-hazard consequences. You've forgiven this debt. What about other debt? Other markets are not going to expect bailouts now. Government has bailed out banks. They bailed out. We'll get to PPP loans in a minute, but they bailed out all kinds of businesses out there. Why not students? Government bails out the poor. Food stamps, welfare is a big bailout. You know, the left validly argues that government provides subsidies to businesses. So yes, it's part of the problem of arguing just over this. Government should stop bailing out everybody. Government should get out of the business of bailing anybody out, the business of subsidizing anybody, the business of trying to manipulate our behavior through taxes and bailouts. But the criticism, even with regard to this, needs to be more comprehensive. The fundamental problem here is not the college loan forgiveness. The fundamental problem here is that government gives student loans to begin with. That is the real perversion. That is the real distortion. That is what is causing tuition to go through the roof. That is what is causing students to be unmoored from reality in terms of what they study in school. That is what is providing higher education, spending in higher education priorities and higher education engagement. The federal government, I mean all government, but we're focused on the federal government right now, should just get out of education. And that primarily involves student financing of education. Now, the government has for many decades been guaranteeing student loans. So the worry was banks won't give students loans to go to college. And this is primarily a problem for poor kids who are then at a disadvantage because they can't go to expensive colleges. So what we need to do is we need to incentivize banks to give college loans. So what the government did is basically subsidize these loans. They went to the banks and gave them guarantees and subsidized them and encouraged banks to give loans to primarily poor students who couldn't pay them back because the banks were going to give loans to middle-class and rich students or they were also going to give loans to kids who are smart, kids who scored high-end tests, kids who would probably get a degree in an income earning profession, kids who had a future. And therefore the bank had a certain confidence that they would get paid back for the concept. So the government came to the banks and said, don't worry about whether they can pay back or not. Give loans to everybody. We'll guarantee the loans. It also got into the business of giving out these kind of Pell grants and other kind of grants to low-income students to make sure that the students would go to college. And as a consequence of all this college enrollment skyrocketed and of course college tuition skyrocketed because why is college tuition skyrocketed? Because no matter what the tuition was going to be, the student could always get a loan. The bank, going back 15 years, the bank didn't worry about, ooh, this tuition is really high. Are you ever going to be able to pay it back? Because they knew they had a government guarantee. So no matter, every time the universities raised their tuition, students kept coming. They raised them again. Students kept coming. They raised them again. Students kept coming. Why? Because they kept getting loans and grants. And the more the government got involved in higher education, the higher tuition got. Surprise, surprise. When the government buys a hammer, it pays a lot more than when I buy a hammer. They don't go to Walmart. They don't go to Home Depot. It's not their money. So the fundamental, well, one of the fundamental problems in American education is the government funding of the educational system. It's, you know, almost better just to pay for the education, but to give these loans. You're incentivizing the universities to increase tuition at Infanitem. You're creating a problem for the students being able to pay it back, but yet the government is guaranteeing all the loans so the lenders continue to lend. And then Obama comes along. And what's amazing about this is when Obama did this, there was very little criticism of him. It was very, I mean, the right was so obsessed with Obamacare. This kind of flew under the radar. Obama basically said, and I'm sure a lot of economists supported this. He said, and it makes a lot of sense, really, from a status perspective, look, we're already guaranteeing these loans. We're ready on the hook for all of them. Why do we need the banks? Why do we need the middleman? Why do we need these extra expenses? Why do we need bankers making a profit? We should get the profit. We're guaranteeing the loans. So basically what Obama did, and I can't remember the year, is he brought all student loans into the government. The government would provide all the loans. Banks had no role anymore. And whatever discipline banks might have had in not giving loans maybe to a gender study student who was going to get into debt with $250,000 or whatever went out the window. And now the government gives loans to anybody who submits, anybody who applies, anybody who wants them. And that means tuition explodes, continues to explode. It also means people go and study stupid things and get money to study for it. It means debt goes through the roof and a complete distortion, a perversion of the make and high educational system. Because our universities, even though they complain bitterly about not having money, are flush. They don't know what to do with the money. You know, some of the dormitories and the cafeterias at these universities are just unbelievable in terms of the quality that they provide students. They build beautiful buildings, beautiful sports facilities. What they don't provide is an education. So the fundamental problem here is government involvement in education, government financing of education with no limit, no limit. It's not like they give every student, imagine if they give every student a voucher, I don't know, $5,000 and you can go spend it on anything. That would be better. That would be better than giving them loans, making the students pay their own back. But the loan is unlimited in terms of its size. With $5,000, you'd at least get some competition. Universities would try to attract that $5,000 and then the student would have to bring, I don't know, bank financing or some other financing to bear on the decision. And maybe then these high tuition students would suddenly realize, wait a minute, I really can't afford this. Particularly if I'm going to study gender studies because it turns out that a bank, a rational bank, would charge interest rates on a gender study graduate of, I don't know, 20%. Whereas if you are in STEM, the interest rate might only be 4%. But that's discrimination. Yes, I'm all for discrimination based on risk, based on ability to repay. So yeah, it's a crazy world out there. I wish I don't see enough of this kind of critique of, you know, you don't see enough of this critique of the actual loan program among Republicans that's so focused on, ooh, the economic damage, they're even focused on, you could argue them all case, but one aspect of it, which is, well, I paid my loans back already, I got, you know, I feel screwed because I didn't get any of this benefit. It's not fair. Some people get it, some people don't. No, I mean, that's not fair. You're right. But that's true of any new government program where they're giving out handouts. Some people get them and some people didn't because they don't qualify. If they have a new farm subsidies, which Republicans love to vote for, what about the farmers who planted those seeds five years ago? How come they didn't get a subsidy and now they do? That's not fair either. There's nothing fair about government subsidizing, government taxing, government involvement in the economy. The immorality is fundamentally government involvement in financing education. That's the immorality. Let private charities, let banks, let financial institutions worry about that. There are loans that financial institutions do where they basically give you, and I think some of the government loans are like this now, where they basically give you a loan and they collect a percentage of your future earnings. And now they have an incentive for you to finish your education, to encourage that, to have an incentive to make sure you go study something you can make a living off of. Maybe that would change the dynamics within academia if that incentive actually existed. So the whole thing is despicable and ridiculous and absurd and a reflection of everything that is wrong with government involvement. And of course it's massively immoral because you're basically redistributing wealth from people who are not getting degrees to people who are getting degrees, trying to get a degree. You're penalizing people who haven't, you penalize people who got degrees in the past and who were responsible and paid back their debt. Generally, a lot of what government does is penalize responsibility and reward irresponsibility. And again, you're penalizing people who are responsible for paying off their debt. So this is a immoral policy, a financially irresponsible policy that could potentially increase, will increase deficits and debt and potentially would increase inflation. And it is a reflection of the real evil, which is the underlying policy. And that underlying policy is the policy of state involvement in funding of education, which is just going to lead to a disaster, particularly the way it's done in America. Sometimes these mixtures of private and public are worse than the government is taking it over because they just know what it is. It's pure. Like the American healthcare system, it's such a mess. In some senses, it would be easier to criticize it if it was just so socialized that we'd know what we were criticizing. Here, it's this mishmass of socialism, some freedom and some private and some not. And how do you make sense of it? And how do you entangle it? And what is bad and what is good? It's almost impossible. And the same with our educational system. And then the Europeans look at us and they think they're nuts because they have decent universities and they don't pay any tuition. It's free for many of them. And then look at us and they think we're nuts, taking on $250,000 of debt. Now, my argument is that $250,000 debt is the cause government is involved because the government finances it, because we're in a mixed economy. We're not. And of course, in many respects, Europeans pay, well, Europeans pay for that education quote-free in their tax code. They just, Europeans generally are just better at the redistribution. They've accepted it. They accept it. They don't challenge it. And therefore, it just gets done. In America, we redistribute what we pretend we're not. We're giving them loans. We're not really giving them. Everything is pretend. We play pretend constantly. All right. My stick on the horrific loan forgiveness program that the Biden administration has engaged in, immoral, impractical. And I don't even think it will buy in many votes. And it certainly piss off a lot of people. Thank you for listening or watching The Iran Book Show. If you'd like to support the show, we make it as easy as possible for you to trade with me. You get value from listening. You get value from watching. Show your appreciation. You can do that by going to iranbrookshow.com slash support by going to Patreon, subscribe star locals, and just making a appropriate contribution on any one of those, any one of those channels. Also, if you'd like to see The Iran Book Show grow, please consider sharing our content. And of course, subscribe. Press that little bell button right down there on YouTube so that you get an announcement when we go live. And for those of you who are already subscribers and those of you who are already supporters of the show, thank you. I very much appreciate it.