The Democrats are making noises about student debt relief in the run up to the elections. That assault on fiscal and personal responsibility has roused principled Conservatives from their Barcaloungers to crusade against forgiveness.
Joking aside, this blog has covered how making interest-bearing loans not backed by collateral to teenagers is the sin of usury. And based on the vast sums involved, it’s a mortal sin at that. A promise to participate in sin, whether it’s being the getaway driver for a bank heist or paying back a usurious loan, nullifies itself immediately.
But the counter argument arises: Why should taxpayers, many of whom paid off their debts by themselves, foot the bill so people who borrowed foolishly can have their debts forgiven?
Author, educator, and student of economics David V. Stewart explains.
“Student debt forgiveness,” as the name should imply, involves the forgiveness of debt. And yet, church-going Americans who have a firm grasp of the forgiveness offered by God through Christ, suddenly forget its meaning entirely any time you mention student loans. They immediately spout the platitude that the “taxpayers foot the bill.” I have to believe this is because of the repetition technique of propaganda: if you repeat something enough times, people will think it is true.
But, the truth is in the definition. “Forgiveness” is just that. If Peter owes Paul 100 dollars, and Paul forgives the debt, then Peter no longer owes Paul 100 dollars. Paul does not have to go rob Mary to get the 100 dollars he is owed. Paul didn’t have the 100 dollars prior to the forgiveness, and he didn’t have it afterward. Peter is no longer obligated to give it to him in the future.
Somehow when the debt holder becomes the fluid mass known as “government,” words lose all meaning
If the government is holding a debt, and it forgives it, that is the end of the debt. It doesn’t have to raise taxes to cover the debt because it’s not paying anyone any money. It didn’t have the money it was owed before and after the forgiveness. All it loses out on is the interest owed on the debt, which hasn’t been paid yet and would have gone away anyway had the debt been paid down.
A good indicator that the uproar over forgiving student debts is astroturfed propaganda is that the Pentagon creates and destroys hundreds of billions of dollars on a routine basis. The DoD’s F-35 program is projected to cost $1.5 trillion. That’s the current total amount of all American student debt. And it bought taxpayers a plane that’s extraordinarily mediocre for a sticker price of $150 million a pop. Contrast that with earlier models that perform just as well if not better for one-tenth the cost.
It’s worth noting that the war hawk and anti-debt forgiveness camps have a high degree of overlap.
And it also bears pointing out that most of the money in play is fake to begin with.
And this is all quite to the side of the way the government manages its debt in the real world, which is through the creation of money. When the government issues a treasury bond and the Federal Reserve buys it, it does so with money it has conjured out of nothing. It doesn’t even bother to print new money. On paper, there is a debt, but the Fed got the money from nobody since it can create money at will. If the Fed were to “forgive” the government’s debt to it (which makes no sense since the bank is part of the government), it isn’t as if it has to call in debts to cover the books. It did everything through imaginary money in the first place.
Those of you who know monetary theory will know that 9/10 of all the money that exists is in the form of deposits. It’s imaginary, created by the transactions between banks and the fractional reserve banking system, which treats debts as assets on its books. The short explanation is this: if you deposit 100 dollars into a bank, it loans out 90 dollars, which is then deposited into another bank (or even itself), which then loans out 81 dollars, etc., and everyone treats their deposit (like the original 100 dollars) as money. Eventually, you get to 1000 dollars, all of which was created out of thin air.
Leaving a needless financial burden on young adults so our corrupt rulers can keep committing usury with fake money is just obscene.
The government creates and destroys as much money as the balance of all student debt every few years. But no one raises a fuss if it’s for bombing people overseas.
Again, there is no moral obligation to participate in usury. Forcing people to pay back usurious loans is a serious injustice.
Just wipe the debts off the books. It doesn’t have to cost taxpayers a dime. Or at least make student loans dischargeable in bankruptcy like other debts.
This shouldn’t be a tough call for Christian Conservatives. The fact that there’s any debate on this issue shows that many on the Right worship at the altars of Mammon and Mars.
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