Student Loan Hail Mary

So Biden decided to forgive $10,000 in student loans for most people, and up to $20,000 for some others. This forgiveness cuts off at income levels of $125,000. All told, it will cover about 45 million people to one degree or another. The media is trying to sell it as something amazing, but it's not. In fact, it really shows the combination of cowardice and stupidity which afflicts Team Biden. Here are my thoughts.

1. First, let's be clear, this is an attempt to bribe young people to vote. That is all this is. It is not an attempt to improve the "system" in any way.

2. Let's also be clear, it won't work. Why?

(a) This does not apply to college students. You need to be paying it back already, so it entirely misses the "young people" they are trying to attract. Stupid.

(b) Check out this quote from the Miami Herald, a Democratic operative, meant to tell you how the "Biden-Harris" (Harris??) forgiveness will bring Heaven on earth:

"With billions of dollars of student debt cleared from the books, millions woke up today to a different financial world. One where they have a higher net worth, more purchasing power and better access to financial products, like mortgages."

That's the sales pitch. The thing is, that's utter crap. Most people have far more loans than $10,000. The average for people with loans is $57,000 and when you owe $60k, having $10k forgiven doesn't mean squat. It doesn't change your financial position in the least. You still owe years of payments. Your payment may go down, but we're talking $20 a month or so. Big whoop. In fact, forgiving $10k feels more like an insult to these people after being told there would be some genuine forgiveness. As for having better access to mortgages and more purchasing power, student loans never really stopped you from getting a mortgage before, so that's nonsense. And the rise in mortgage rates easily offset whatever benefit this gives. So, nice try. As for net worth, net worth is an illusory concept no one thinks about except near-retirees. Don't believe me? What are you worth? And purchasing power, as we said, is like a $20 a month raise. Short answer: this is a big yawn. Just like all the other bills they passed which the Democrats couldn't understand why they didn't win people over either. Way too little... way too late.

3. Now let's talk the politics.

(a) If Biden really thinks this will help, why announce it in the summer when no one is paying attention? Announce it before the election when people care.

(b) By ending the moratorium in January, he's ruining Christmas.

(c) The left is irate because this is regressive: it's working men and women paying off the debt of lawyers and doctors and elitists. That is kind of sh*tty if you think about it... but then, all socialism is.

(d) I think it probably isn't inflationary like some are saying because it won't actually work to give people more money to spend.

(e) People who paid off their loans are pissed because they aren't getting this.

(f) People who didn't go to college are pissed because they get to pay for it.

(g) How is it that once again, big rich institutions seem to get off scot-free? Big Banks, Dodd Franks. Big Health, Obamacare. Big Pharma. Big Auto. Big Tech. Big Billionaire. Now Big College, they all seem to do extraordinarily well when the Democrats claim they are helping the people. In this case, we're talking about colleges who have grown huge and fat and rich on pushing these loans on students with no choice, and yet they don't even get a slap on the wrist out of this? Why didn't Biden pay for this with a tax on college endowments? They have trillions. They could pay for it. They caused it. That makes sense. It makes no sense a McDonald's worker should pay for this so Harvard doesn't have to. Terrible policy, terrible optics.

This is one of those moments that shows that Biden's a fool. If he was going to do this, he needed to go big: forgive it all, not just a piece of it. Failing that, makes this meaningless. And if he was going to do this, he needed to take the money from the people who wrongly took it in the first place: colleges. Fix the system. Doing that would have been popular even with people who never had loans or paid them off. Instead, he put the cost on the least deserving people. He has no balls and no brains, so he tried to split the difference between bold action and doing nothing and he got virtually nothing but a lot of anger for his trouble, and he protected his Big friends once again.

This is utter crap. Oh, I will take his money, but this only makes me like him even less.

As an aside, Biden's approval is "up" to 44%. Keep four things in mind when you see the next flood of articles claiming momentum. First, if you were told a President's approval was 44%, would you see anything good in that number? It only appears "good" because it's been down to 42%. Secondly, 44% and 42% are in each other's statistical margin of error, which means it hasn't actually moved. Third, it's summer. As I told you last time, things drift up in the summer because people lose their intensity while they are sitting at the beach. The real number that matters is when people come back -- just like the stock market, which always rallies in low volume trading over the summer and then tells you reality in September. Fourth, if Biden's "string of victories" (as the media is calling it) or "momentum" can only produce a 2% increase well below the natural level of support for a candidate of either party then his victories are Pyrrhic at best. A real victory usually comes with some benefit.

Student loan forgiveness won't help this.

Thoughts?