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Why STUDENT LOAN RELIEF Makes Sense

After causing the 2008 (and, arguably the 2020) financial crises, moderate- and low-income citizens bailed out large financial institutions. They did so again in 2019 and 2020. 

When all individual transactions are summed across all Federal Reserve credit facilities, a total of $29 trillion dollars was spent, including $16.41 trillion to 14 larger financial institutions. This includes bailing out Goldman Sachs, a firm with a record of unethical behavior:

Now, THIS was truly unfair. Forgiving a small portion of student loans is not.

As to the claim that somehow bailing out banks (and companies via PPP loans) is required, this is false. In 2008 and 2020, “gains..were captured disproportionately by the recipient banks” and their management in the form of bonus compensation.  95% of the benefit went to people making over $250,000 a year. They “ended up getting a subsidy to the tune of” trillions of dollars. 

Likewise, any gains from PPP loan forgiveness went straight into the pocket of business owners, who, instead of losing all of their investment, were able to retain all or some portion of the value of their business. Most (if not all) workers did not share directly in this ownership value. 

The student loan forgiveness program will have more direct impact on low and middle income persons. It will improve living standards by increasing borrower disposable income, credit ratings, and home buying. Most importantly, the program will not increase inflation (given the small size of each loan payment) and will generally reduce anxiety. This benefit to society is also a benefit to those who saved to pay for college and for the majority of Americans who didn't go to college. Rather than being greedy and selfish, note that 90% of the debt relief goes to people making under $75,000 a year.

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