Bernie Sanders has a word for those who met their financial obligations by scrimping and sacrificing to pay off their student loans: suckers!
The Vermont socialist this week upped the ante at the Democratic presidential hold ’em game by staring down the crowded field and going all in — with somebody else’s money, of course. Sen. Sanders now proposes to simply wipe out $1.6 trillion in outstanding student loan debt. Abracadabra — now you see it, now you don’t!
What could possibly go wrong?
Let’s put aside the economic illiteracy on full display here, the naked and shameless grab for votes or the disdain for personal responsibility embedded in Sen. Sanders’ proposal. Who says progressives hate the rich? This plan would be a generous handout to high-income households, which hold more than one-third of all student loan debt.
One could argue that some kind of targeted forgiveness program might make sense if the goal were to subsequently euthanize the government’s student-loan efforts altogether, allowing private financial institutions to fill the void. But no socialist would ever embrace that approach, so Sen. Sanders’ massive wealth transfer would be followed by a continuation of the very programs that led us down this road in the first place. How long before taxpayers will be forced to cough up another $1 trillion as the debt skyrockets again after the reset?
Let’s not forget that when the Obama administration nationalized the student loan industry in 2010, supporters of the takeover — including Sen. Elizabeth Warren — claimed the move would be a moneymaker for the government. They were off only “by a mere $1.5 trillion,” The Wall Street Journal noted Tuesday.
Sen. Sanders claims the government can pay for his trillion-dollar giveaway by imposing levies on Wall Street transactions, including taxes on stock trades and fees on bonds and derivatives. Sure. In fact, math has never been Sen. Sanders’ strong suit, as evidenced by the murky calculations behind his proposed government-run health care system, which would ban Americans from using their own money to contract for private medical services. The New York Times noted last week that Sen. Sanders has “almost completely sidestepped” the question of how to pay for his socialized medicine scheme.
The timing of Sen. Sanders’ student loan proposal is hardly coincidental. The two-dozen Democratic presidential hopefuls will participate in their first debates this week, and the pressure will be intense to outdo each other with the taxpayer giveaways. The 18th century writer Alexander Frasier Tytler is credited with noting that “A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury.” Sen. Sanders and his fellow Democrats seem intent on proving him correct.