“Other than that, Mrs. Lincoln, how did you enjoy the play?”
That famous one-liner is a joke about a self-centered theatrical producer so obsessed with his own success that the assassination of President Abraham Lincoln in the audience was a mere distraction from his main concern.
President Joe Biden has Lincoln’s job, and he’s doing it with the producer’s self-centeredness.
With reckless abandon and without Congress, Biden announced Wednesday that he is canceling some student debt for some people, $20,000 for borrowers who received Pell Grants and $10,000 for borrowers who didn’t, in families with up to $250,000 in annual income. He’s also extending the expiring “pause” on loan repayments for another four months, cutting future monthly payments in half and ending interest charges for any borrower who stays current on payments.
So far, the reviews of this production have not been great.
“We should focus on making higher education and technical schools more affordable in the first place,” said one lawmaker.
“Target loan forgiveness to those in need, and actually make college more affordable for working families,” said another.
“This is a one-time Band-Aid that doesn’t get to the root of the problem,” said a third.
And those are the Democrats. U.S. Rep. Sharice Davids of Kansas, Sen. Catherine Cortez Masto of Nevada and Rep. Elissa Slotkin of Michigan are all in tough races for reelection, and Biden’s unilateral student debt cancellation has apparently made them tougher.
Such are the perils of being self-centered. Unable to see beyond the glaring eyes of the activists who lobby him, Biden seems to have entirely missed the volcanic reaction by everybody else — all the people who did not borrow more for college than they could pay back; or who did not take out loans at all even if it meant they wouldn’t go to their first-choice university; or who worked long and hard to repay the student loans they incurred for themselves or their kids, denying themselves a lot of fun things they could have done with that money.
Just wait until all those voters find out how much they’re paying for other people’s student loan debts, especially when some of the debtors graduated from Harvard Law School and some of the taxpayers are charging groceries to their credit cards.
And it gets still worse. This is only the start of student loan forgiveness, according to the chair of the left-of-the-left Congressional Progressive Caucus. Rep. Pramila Jayapal lobbied Biden hard to cancel $50,000 in student loan debt per borrower. She called the president’s plan “a step” in the right direction.
Or it’s a step right off the cliff.
The White House was vague about the total cost of the program, but some analysts calculated that it could run $300 billion to $600 billion, depending on how many people take the money. Let’s guess. All 43 million of them.
That’s the White House’s estimate of eligible student loan borrowers. Not everyone qualifies. Individuals who earn more than $125,000 and couples that earn more than $250,000 will not get debt forgiveness, and neither will all the students who borrowed from private financial institutions. Only student loan debt held by the U.S. Department of Education qualifies to be canceled.
Biden’s plan will surge roughly half-a-trillion dollars of government-printed money into the economy with no products or services to show for it. The name for this policy is “inflation,” and it’s probably going to lead to higher and higher interest rates, including on the credit cards people are using to pay for groceries.
So far, the risks of Biden’s debt-cancellation action are the potential loss of fragile Democratic seats in the House and Senate, a volcanic reaction by voters who think they’re getting screwed for being responsible, a worsening of already crisis-level inflation and whining by progressives that it’s still not enough.
Other than that, Mrs. Lincoln …
But wait, there’s more. Many Democrats in Congress and even in the White House previously said the president didn’t have the power to cancel student debt. However, that was before intermission. In the second act, the president suddenly develops the power to cancel student debt because A) the post-9/11 HEROES Act allowed the Department of Education to grant relief from student loan requirements during a national emergency, and B) COVID-19.
That’s a stretch that could throw your back out.
Another problem is what economists call “moral hazard.” That’s the limitless risk that’s added to our society when irresponsible actions are bailed out and expectations reset to anticipate that bailouts will recur again and again.
Once introduced into the system, moral hazard warps decision-making everywhere. University administrators can set tuition rates screamingly high, and students can cheerfully borrow as much as they need, secure in the belief that later they can just call Washington and describe how burdened they are by student loan debt. If there are enough of them, it will magically disappear shortly before an election.
There was a hint of this effect in a June survey of 1,000 student borrowers who took out loans after President Biden was elected. The poll by Intelligent.com found that 86% of borrowers said Biden’s campaign promise to forgive student debt played a role in their decision to take out a student loan. Almost a third said they’d drop out of school if the debt forgiveness didn’t come through.
President Biden seems oblivious to the seismic rumblings, focused entirely on his own reelection. It’s enough that some pollsters have said student loan forgiveness plays well with a key Democratic constituency. More and more, the administration’s guiding principle seems to be, “By any means necessary.”
Put another way, “Other than that, Mrs. America, how did you enjoy the first term?”