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osewalrusA new paper out of the Levy Institute makes the macro-economic case for having the U.S. write off/pay off the existing outstanding student debt. Marshall Steinbaum, one of the authors, condenses the argument (and adds some additional ones) in this blog post.
The macro economic argument is comparatively straightforward, and also addresses the supposed moral hazard argument. As with many such macro arguments, the rebuttals are generally moral arguments cloaked as economic arguments. (I have no objection to moral arguments with regard to economic policy. To the contrary, I am all for embracing them. I simply wish people could better distinguish between economic arguments and morality tales. Hint, if your argument involves anything about "my hard earned tax dollars,"or uses words like "lazy," or other pejoratives usually associated with descriptions of character -- it's a moral argument not an economic argument.)
What jumps out of Steinbaum's analysis, however, is just what an enormous impact a program of student debt forgiveness would have on African American median wealth in particular. The common wisdom is that the "student debt crisis" is all about whiny middle class white kids who couldn't hack a degree in engineering. As someone paying an engineering school tuition right now, I can assure you that student debt is hardly limited to the humanities. (Indeed, we are having something of a medical pipeline crisis because medical school has become too expensive, especially by the time you actually enter the workforce. But I digress . . .)
But that doesn't tell us anything about the race aspect. As is so often the case, stereotypes rather than than actual data tend to inform people's opinions about who benefits from various government programs. We think black people benefit from welfare and medicaid, and white people benefit from student debt aid, on the assumption that black people don't work and white people go to college. But just as there are lots of rural white people on medicaid and welfare, we find plenty of African Americans with lots of student debt. But the African American student debt crisis is compounded by all the usual factors that hinder formation of wealth by African American households. Pay discrimination, increased likelihood of coming from a poorer background, decreased likelihood of owning property -- particularly in areas where property has appreciated in value. Increased impact from the Great Recession.
According to Steinbaum, student debt relief would more than double the median wealth of African American headed households ages 25-40. It would also help to close the current wealth gap between African American headed households ages 25-40 and White headed households of the same age from the current 12:1 to 5:1.
Interesting.
The macro economic argument is comparatively straightforward, and also addresses the supposed moral hazard argument. As with many such macro arguments, the rebuttals are generally moral arguments cloaked as economic arguments. (I have no objection to moral arguments with regard to economic policy. To the contrary, I am all for embracing them. I simply wish people could better distinguish between economic arguments and morality tales. Hint, if your argument involves anything about "my hard earned tax dollars,"or uses words like "lazy," or other pejoratives usually associated with descriptions of character -- it's a moral argument not an economic argument.)
What jumps out of Steinbaum's analysis, however, is just what an enormous impact a program of student debt forgiveness would have on African American median wealth in particular. The common wisdom is that the "student debt crisis" is all about whiny middle class white kids who couldn't hack a degree in engineering. As someone paying an engineering school tuition right now, I can assure you that student debt is hardly limited to the humanities. (Indeed, we are having something of a medical pipeline crisis because medical school has become too expensive, especially by the time you actually enter the workforce. But I digress . . .)
But that doesn't tell us anything about the race aspect. As is so often the case, stereotypes rather than than actual data tend to inform people's opinions about who benefits from various government programs. We think black people benefit from welfare and medicaid, and white people benefit from student debt aid, on the assumption that black people don't work and white people go to college. But just as there are lots of rural white people on medicaid and welfare, we find plenty of African Americans with lots of student debt. But the African American student debt crisis is compounded by all the usual factors that hinder formation of wealth by African American households. Pay discrimination, increased likelihood of coming from a poorer background, decreased likelihood of owning property -- particularly in areas where property has appreciated in value. Increased impact from the Great Recession.
According to Steinbaum, student debt relief would more than double the median wealth of African American headed households ages 25-40. It would also help to close the current wealth gap between African American headed households ages 25-40 and White headed households of the same age from the current 12:1 to 5:1.
Interesting.
no subject
Date: 2018-02-15 03:34 am (UTC)