Dad texted me:

Richard just had a thought, we’re here at Pismo Beach on a beautiful day consuming a watered down old fashioned. Now for the thought, please do a post on taxpayers paying off student debt. I never got a student loan, didn’t get a degree, but now me at 84 still paying income tax have to pay off the student debt of a lot of rich people. You had student loans, but YOU paid them off.

My first thought was meh, not of much interest to me. But then I asked myself why. Why is it not of much interest to me? I brewed a third Americano in the 2 hours since I awoke at 05.30, and in 3 minutes was shooting another video.

As in most things now, my take on stuff is almost guaranteed to be different from everyone else’s “mainstream” view…whether their regurgitation of talking points emanates from Fox News, CNN, The New York Times, or The Wall Street Journal.

In this case, there seems to be a wider diversity of takes on it across the political spectrum. In The Atlantic: A Democratic Economist’s Case Against Biden’s Student-Loan Plan — Jason Furman, a former Obama economic adviser, thinks Biden’s debt-relief plan helps too many of the wrong people. Interview by Annie Lowrey.

One of the most prominent voices criticizing the move is Jason Furman, a Harvard economist who chaired the Council of Economic Advisers during President Barack Obama’s second term. Furman argues that Biden’s plan will lavish relief on individuals with high incomes or the prospect of high incomes, encouraging universities and colleges to jack up tuition rates and burdening future students with heavier loan burdens. He also worries about people who did not take out student loans—meaning most Americans—ultimately paying for the plan. […]

Lowrey: With that, let’s hear the case against it.

Furman: With any public policy, you need to analyze the trade-offs. You can’t just say, “This person gets this, and therefore it’s good.” It’s always better for someone to get something rather than nothing. But that’s not how it works.

If you’re giving $500 billion to one group, where’s that money coming from? One possibility is that the economy grows much more quickly, and so spending that money doesn’t hurt anyone. I think that’s extremely unlikely, given the highly constrained state we are in. And so I think most of that $500 billion that one group is getting is coming at the expense of everyone else.

That doesn’t make it a bad idea. If we were covering a Medicaid-coverage gap, I’d say, “You know what? If everyone has to pay $50 more and poor people get health insurance and the inflation rate is a tenth of a percentage point higher, I’m all for that.” But we’re giving couples making up to $250,000, which is a lot of money, up to $40,000.

Lowrey: So one concern is that this is not targeted toward people who really need help.

Furman: Then, there’s the expectation that debt relief will happen again. That will lead to shifts in the college-financing system, toward loans and away from grants. It will also raise college tuition, as colleges move to capture some of this spending. Our goal should be getting more people into college. It is not obvious that Biden’s plan helps with that goal. It might even hurt that goal.

Finally, I’m uncomfortable with this level of presidential power. You know, President Trump was being pushed by some of his advisers to index capital-gains tax rates to inflation, and do it by executive order. He ultimately resisted. I think the indexation of capital gains is a much worse policy than this one. And it’s possible the legal grounds were weaker. But he actually said, No. I’m not going to just change tax law by myself without checking with Congress. I think that’s a good rule to live by, and one we’ve mostly had up until now.

So that’s a take entirely based in consequentialism. Rather than look to principles, one looks to consequences and evaluates them—typically on the basis of the most “good” for the most people—regardless of the level of screwing some are subjected to. He’s saying that no matter how well-intentioned (or political because of cap-feathers needed in advance of midterm elections) the consequences and outcomes don’t look so good to him—regardless of what moral beliefs might be, in terms of letting a person off the hook for a debt.

…I think what gets most people’s goat, and rightly so in the latter scenario, is that if John Doe loans money to someone, they don’t repay him, and John forgives the debt, then it’s John and only John taking the loss. It’s an entirely different story if John comes to you and under threat of gunpoint, demands that you cover his loss.

But this reasoning is essentially flawed, and I explain why in the video.