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An argument I've seen a lot is "well we can't cancel debt because debt cancellation is taxable." So let's walk through this.
FIRST: let's say it is. Would you rather pay $50K in debt principal that continues to accrue interest, to whereby you're paying a lot more than $50K? Or would you rather pay taxes on $50K once? Is this a serious question? For real?
SECOND: there's no reason it has to be taxable. It would be a little more complicated, but the Biden administration could tell the IRS to decline to collect taxes on income through debt cancellation. BUT EVEN IF THEY DIDN'T:
The IRS allows you to set up payment plans for tax amounts you can't pay all at once. So let's say you owe $10K in taxes on $50K in canceled debt. Your payment plan to the IRS will be lower-interest, lower monthly payments, and far lower principal than your student debt payment.
and as a matter of policy, the Secretary of the Treasury could require the IRS to offer a payment plan for all taxable income related to canceled debt. This is literally the easiest hurdle, and people making this argument lack either financial sense or knowledge of policy.
