View this email in your browser

**DECEMBER 11, 2020**

Kuttner on TAP

The Bogus Arguments Against Student Debt Relief

****

Deficit hawks have been attacking the idea of student debt relief

using straw men and deceptive data. The offenders include the Brookings
Institution
,
Goldman Sachs, and the Pete Peterson-spawned Committee for a
Responsible Federal Budget.

Here are their key arguments: First, a lot of student debt is held by
relatively well-off people and those with advanced degrees, and so
student debt relief is bad distributively. Second, the macroeconomic
stimulus would be weak compared to other possible uses of the money.

But it's easy to target the relief away from the affluent and toward
people who really need it-by capping the amount of the relief.

Even the Committee for a Responsible Federal Budget-the ultimate
deficit hawks-admits that about half of the total debt is held by
households making less than the median income. So capping the total
amount of relief can target it to where it's needed.

Elizabeth Warren and Chuck Schumer have proposed a debt relief cap of
$50,000. A Brandeis study found

that capping the relief as Schumer and Warren propose would target most
of it to households below the median income, and that the total
forgiveness rate would be 87 percent for people with associate's
degrees, 72 percent for those with bachelor's degrees, but only 28
percent for those with doctoral, legal, or medical degrees.

The stimulus argument is a straw man. Debt relief is no substitute for a
massive program of COVID relief and infrastructure spending. But those
require legislation, which is not on the table, while Biden can do debt
relief by executive action. It's especially galling to hear these
straw-man arguments from the likes of the Committee for a Responsible
Budget, which exists to cut social spending, and from Goldman Sachs.

And all of these deficit-hawk studies rely on the Fed's Survey of
Consumer Finances. But that survey derives household income by looking
at the main earner-

**and misses the millions of recent grads stuck with large debts who
have had to move in with their parents**. It thus fails to capture
hundreds of billions in debt held by millions of people who are
financially strapped, and completely cooks the numbers.

The reason to do debt relief is not because we expect it will be massive
macro stimulus, but because student debt is hobbling young Americans who
don't happen to have wealthy parents before their economic lives even
begin. Debt obligations have especially harmed Black and Latino/a
students, those who went to community college, or were duped by
for-profit colleges and now carry large debt loads relative to their
incomes.

Time for Biden to use his executive power to help millions of struggling
young adults.

~ ROBERT KUTTNER

Follow Robert Kuttner on Twitter

Robert Kuttner's latest book is
The Stakes: 2020 and the Survival of American Democracy
.

[link removed]

Kushner Defines 'America's Interests' at the Expense of Human
Rights

The president's son-in-law admits that 'our values' are not
driving new accords with Israel. BY JONATHAN GUYER

Will the Georgia Runoff Elections Work as Smoothly as November Third?

Maybe not, as local officials reduce polling places. BY BRITTANY GIBSON

Mitch McConnell's Sudden Interest in Independent Agencies

It shows that he knows Biden will be president, and that he has to do
what's necessary to damage his effectiveness. BY ELEANOR EAGAN

Will the New U.S. Trade Rep Be Hobbled by Lobbyists?

Despite the appointment of a progressive, Katherine Tai, to the top
slot, Big Tech hopes to insert allies as her deputies. BY ROBERT KUTTNER

Shut Off: Washing Hands Without Water

During a global pandemic, people in smaller communities are at greater
risk of having no water at all in their homes if they can't pay their
bills. BY GABRIELLE GURLEY

Unsanitized: Vaccine Development Should Trigger Transformation of
Monopoly Patent System

Plus, how corporate profits have soared in the pandemic. This is The
COVID-19 Daily Report for December 11, 2020. BY DAVID DAYEN

To receive this newsletter directly in your inbox, click here to
subscribe. 

[link removed]

 

[link removed]

 

[link removed]

 

[link removed]

 

[link removed]

 

[link removed]

 

[link removed]

YOUR TAX DEDUCTIBLE DONATION SUPPORTS INDEPENDENT JOURNALISM

Copyright (C) 2020 The American Prospect. All rights reserved.
_________________

Sent to [email protected]

Unsubscribe:
[link removed]

The American Prospect, Inc., 1225 I Street NW, Suite 600, Washington, DC xxxxxx, United States