US appeals court blocks all of Biden student debt relief plan (Page 10/13)
NewDustin JUL 23, 12:42 AM

quote
Originally posted by blackrams:
Understood, all I can really say is that while in college I took both Micro and Macro Economics and based on what I learned back before the Ice Ages, it doesn't make any sense. But, I still don't and won't accept that a debtor should be allowed to default and regardless of some previously posts. I'm not buying that Biden Student Relief Program doesn't put this country and it's taxpayers deeper in debt. If, for no other reason, the National Debt effects the whole economy, tax decisions that I don't have a say in, the Feds Interest rate and the nation's credit rating. Nope, just not buying it.


This isn't some magic money process like Bernie's...what did they call that nonsense...Modern Monetary Theory? The 'I'm not buying it' stance is a little strange to me. This isn't even a defense of Biden's student loan forgiveness. Check the date on that report; it's from 2018. This was an economic analysis from during the Trump administration. You can also check that organization, I purposefully chose a non-partisan, economics-focused group. You could take the Mises/Rothbard/Libertarian no-government-spending-is-good-government-spending stance, but outside of that I think considering these types of interventions have a lot less overhead and a are a lot more impactful than, say, bailing out corporations or blanket mailing checks to folks.

[This message has been edited by NewDustin (edited 07-23-2024).]

randye JUL 23, 05:30 AM

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Originally posted by NewDustin:


Potentially. That's the argument.






No it isn't.

The actual argument (now mostly settled by the federal courts), and the topic of this thread, is the LEGALITY of such an attempt by the executive.

You can make your subordinate rationalizations about potentially, possible, would be, maybe economic benefit but the REALITY is that current LAW forbids it.

[This message has been edited by randye (edited 07-23-2024).]

NewDustin JUL 23, 09:23 AM

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Originally posted by randye:

No it isn't.

The actual argument (now mostly settled by the federal courts), and the topic of this thread, is the LEGALITY of such an attempt by the executive.

You can make your subordinate rationalizations about potentially, possible, would be, maybe economic benefit but the REALITY is that current LAW forbids it.




I framed the argument I'm making here way back on page 1 and I don't remember it being about the legality of this particular executive action:

quote
Originally posted by NewDustin:
I'd pay off their debts if it had an economic net benefit; would be petty to the point of absurdity not to. I'm not suggesting that's necessarily the case -there does not seem to be sufficient information for us to make a determination like that yet- but it seems foolhardy to assume the conclusion based on how emotionally satisfying it would be.



I've even already pointed out I'm not talking about the SAVE plan in particular:

quote
Originally posted by NewDustin:
This isn't even a defense of Biden's student loan forgiveness. Check the date on that report; it's from 2018. This was an economic analysis from during the Trump administration.



The ruling also does not go as far as you are suggesting. It ruled that the executive overreached in this particular case by citing the HEROs act for eliminating the debt. That is a lot more narrow than a ruling on the legality of the executive branch taking such an action at all.
Doug85GT JUL 23, 10:11 AM
LOL

Even in the part you quoted it says that student loan forgiveness will increase the federal debt. Additionally it also says it will increase inflation.
NewDustin JUL 23, 10:45 AM

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Originally posted by Doug85GT:

LOL

Even in the part you quoted it says that student loan forgiveness will increase the federal debt. Additionally it also says it will increase inflation.



Again, deficit spending and the overall debt are related but different. It does not say it will increase debt. That is addressed in the report.
The entirety of the conclusion is that the increases in the deficit and inflation are modest for the economic gains created. The context in which that information exists is extremely important.

This, like all reasonable economic policy, does not fit into a neat box. If we are going to intervene in the economy -and I don't see any arguments here that we absolutely should not- there will always be costs associated. The exercise in looking at interventionist economic policy isn't "find a single thing wrong with it" but rather looking at the overall effect and measuring that against the impact of alternative policy.

If you are going to take a strong stance against increased deficit spending we can discuss that, but I'm not sure how you'd square that with Trump's massive deficit spending increases under his first Presidency, or the huge deficit increases that would be needed to fund Project 2025 or the 2024 Republican Party Platform. All of those accept the idea of increased deficit spending for economic benefit.
Doug85GT JUL 23, 11:15 AM

quote
Originally posted by NewDustin:


Again, deficit spending and the overall debt are related but different. It does not say it will increase debt. That is addressed in the report.
The entirety of the conclusion is that the increases in the deficit and inflation are modest for the economic gains created. The context in which that information exists is extremely important.

This, like all reasonable economic policy, does not fit into a neat box. If we are going to intervene in the economy -and I don't see any arguments here that we absolutely should not- there will always be costs associated. The exercise in looking at interventionist economic policy isn't "find a single thing wrong with it" but rather looking at the overall effect and measuring that against the impact of alternative policy.

If you are going to take a strong stance against increased deficit spending we can discuss that, but I'm not sure how you'd square that with Trump's massive deficit spending increases under his first Presidency, or the huge deficit increases that would be needed to fund Project 2025 or the 2024 Republican Party Platform. All of those accept the idea of increased deficit spending for economic benefit.




How does running a yearly budget deficit NOT lead to increased debt?

I know you did not read the report because it not only says it will increase the deficit, it even says by how much.
NewDustin JUL 23, 12:11 PM

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Originally posted by Doug85GT:
How does running a yearly budget deficit NOT lead to increased debt?


Now that's a good question! On it's face, that doesn't make a lot of sense. If you aren't familiar I'd highly recommend Bastiat's The Parable of the Broken Window. In it Bastiat lays out, in pretty compelling terms, the argument against government intervention exactly like what is being proposed here. It's a good argument.

I spoke earlier about some of the differences between micro and macro economic policies, and this is where I feel Bastiat breaks down to some extent. That argument assumes there is an option with no intervention, and that simply isn't the case anymore. The government holds and will be administering the funds/powers/responsibilities it does already; there's millions of broken windows and they've already formed a window company that fixes them.

But his argument of "what is seen vs what is not seen" still makes sense if you adapt it to this reality. If you'll forgive a gross oversimplification, consider the following scenario:

You have an obligation that costs $100/year
Someone owes you $100
If you do not collect that $100, they will spend it in such a way that reduces your yearly obligation cumulatively ($1 on year 1, $2 on year 2, etc)
If you do collect that debt, all yearly reduction to your obligation will stop.

Two scenarios
1. You collect the debt and make yourself whole immediately.
2. You do not collect the debt, and let the cumulative savings add up.

In the second scenario you are operating at an increased budget deficit for years 1-9. On year 10 you are no longer at a deficit. Every year after will reduce the debt. In this example it would take another 11 years to have more than made up for the years operating in budget deficit as well as the initial debt amount.


quote

I know you did not read the report because it not only says it will increase the deficit, it even says by how much.


I never said it wouldn't increase the deficit. I said it suggests the deficit increase would be offset by economic gain. Because that's what it literally says. I've already admitted to overly simplifying that once above. If anything, I feel like trying to prove that I haven't read the report has forced you to read it more carefully than you originally did, and I approve
Doug85GT JUL 23, 12:24 PM

quote
Originally posted by NewDustin:

I never said it wouldn't increase the deficit. I said it suggests the deficit increase would be offset by economic gain. Because that's what it literally says. I've already admitted to overly simplifying that once above. If anything, I feel like trying to prove that I haven't read the report has forced you to read it more carefully than you originally did, and I approve



Do you know what offset means?


I read through it laughing because of how badly you misunderstand it. Pop quiz, how much does your report say it will increase the federal debt by over a ten year period? (This should be easy if you actually read it.)
NewDustin JUL 23, 02:34 PM

quote
Originally posted by Doug85GT:

Do you know what offset means?

I read through it laughing because of how badly you misunderstand it. Pop quiz, how much does your report say it will increase the federal debt by over a ten year period? (This should be easy if you actually read it.)


I'm glad you read through it, though I think laughing while doing so may have contributed to still missing the difference between an action increasing a budget deficit and one increasing debt. I would be very interested in the answer you have to your own quiz. As you answer, please consider the following: What if one policy addresses an issue while increasing the deficit less than an alternative policy? How would replacing the older, more deficit-increasing policy impact the debt?

Also, while you're going back to get that information, you might want to stop by page 20. Understanding how the loans were originally funded (via Treasury securities) is important to understanding the implications of canceling them.
Doug85GT JUL 23, 07:15 PM

quote
Originally posted by NewDustin:

I'm glad you read through it, though I think laughing while doing so may have contributed to still missing the difference between an action increasing a budget deficit and one increasing debt. I would be very interested in the answer you have to your own quiz. As you answer, please consider the following: What if one policy addresses an issue while increasing the deficit less than an alternative policy? How would replacing the older, more deficit-increasing policy impact the debt?

Also, while you're going back to get that information, you might want to stop by page 20. Understanding how the loans were originally funded (via Treasury securities) is important to understanding the implications of canceling them.



Just what I thought. You did not read that report. You are just a poser.

You are a complete idiot when it comes to economics. Do you know what a Treasury security is? If you did you would know how stupid your statement is. The government cannot cancel a Treasury security without serious consequences.