There's a tacit bet on the left that Biden might turn out be a president in the mold of FDR or Lincoln - a centrist margin-tinkerer whose susceptibility to political currents is such that he can be pushed into real, structural reform.

1/

That's why we're talking about striking student debt, even as Biden ("The Senator from MNBA") stacks his cabinet with finance-bros of all genders (see also: why we're talking about universal health care, police defunding, real climate policies, etc).

2/

These fights are existential. As I wrote in the epigraph to Attack Surface: some fights you fight because they're fights you win, and other fights you fight because you must. When the ship sinks, you tread water until you run out of kicks.

https://attacksurface.com 

3/

So there's a lively left debate on student debt forgiveness that's really chewy and interesting, even if it turns on many unlikely hypotheticals about Biden's lack of spine and concomitant susceptibility to pressure from the base.

4/

Take @Econ_Marshall's work on skyrocketing student debt defaults: he argues that we're ALREADY forgiving student debt, but only after it has destroyed debtors. We're wiping out human capital AND creditors' balance-sheets, at tragic human cost.

https://pluralistic.net/2020/11/20/sovkitsch/#student-debt

5/

By contrast, @Michael_Olenick argues that student debt forgiveness would transfer billions from the USG to predatory lenders (who'd pay off the debts) AND stick debtors with massive tax-bills for the "benefit" of debt-unshackling.

6/

As an alternative, he proposes simplifying discharging student debt through bankruptcy, which would euthanize the rentiers who hold the debt, and unshackle debtors without creating unpayable tax liabilities.

https://pluralistic.net/2020/11/23/opsec-and-personal-security/#racket

7/

The main forgiveness proposal comes from @SenWarren, who proposes a $50k cap. This number has undergone a lot of scrutiny, with analysts slicing up the data to see who would see the most benefit from this and whether it would be sufficient.

8/

Today, I want to consider a different number: $236,000.

That's how much Chris, a 59-year-old debtor, owes for college. Now, Chris didn't borrow that much! In fact, Chris started out at Missouri State in 1980 paying cash for his courses.

https://taibbi.substack.com/p/student-loan-horror-stories-borrowed

9/

But by 1981, Chris needed a loan. Unfortunately for Chris, that was the year that Ronald Reagan, a human monster, raised interest rates on student loans from 7% to 9%. If he'd borrowed from the start, he'd have gotten a much lower rate.

10/

By the time Chris finished his law-degree, he had $79k in loans. But he figured that he'd be OK, because a) He would get a good job and b) He could deduct the interest from his student loans.

11/

But in 1986, Ronald Reagan (see above) changed the tax code so that college grads could no longer deduct loan interest. Chris got burned out on the law, had a terrible divorce and his life fell apart.

12/

He missed payments and got hit with hard penalties. Then interest on the penalties. In 2002 he was making $28k/year. By 2004, 15% of his paycheck was being garnished to service his loans, which continued until 2011. Since then, he's faced 25% garnishment.

13/

All told, Chris has paid $190,000 against the $79,000 in loans he's taken out.

He owes $236,000 still.

14/

How did that happen? Well, first, there were the terrible penalties he accrued. But then there's the way the loans are serviced out of those paycheck garnishments: the money is applied solely to the penalties, meaning his interest piles onto his principal, which grows.

15/

He's 59. His loan-servicer won't renegotiate his loan, even though they know he's going to retire in ~9years and will likely be dead in ~15 years. The loan servicer is content to continue taking 25% of every cent he gets until he's buried and then hit his estate.

16/

Here's @mtaibbi with the bottom line: "Chris made mistakes, but as he’s noticed, so have other types of borrowers."

Here's Chris: “It doesn't appear that we seem to hesitate much in giving money to Ford or Chrysler, or a collection of banks."

eof/