Economists Say Eliminating Student Loan Debt Would Boost Economy

Economists Say Eliminating Student Loan Debt Would Boost Economy


Right now, there are two Democrats running
for president that have plans to eliminate student loan debt. First, we have Elizabeth Warren who wants
to eliminate up to $50,000 of student loan debt for American citizens. Each versus Bernie Sanders who says to hell,
let’s get rid of every single penny of student loan debt for everyone, regardless of how
much you have. So you’ve got Elizabeth Warren’s plan, which
is, Hey, if Bernie wasn’t running, this would be the best one. But then you’ve got Bernie’s plan that is
leaps and bounds better than what Elizabeth Warren is offering. Now, keep in mind, this is not coming from
me. It is coming from me because I also feel the
same, and I’ve talked about that in the past. But that’s actually coming from economists,
economists at Moody’s who say that total and complete student loan debt forgiveness here
in the United States, not just forgiving most student loans, but forgiving all of it would
be a massive boost to the United States economy, to the tune of possibly upwards of $100 billion
per year. So here’s what I have done. I went through and I looked up the statistics
and then I did the math. Right now we have 44.7 million Americans in
this country who holds student loan debt. The average student loan debt payment here
in the United States per month is between 200 and $300 again, per month, 44.7 million
people paying somewhere between 200 and 300 million, $300 excuse me, every month. So if we take the low number, if we take just
the 200 and we multiply it by 44.7 million, we get eight point $9 billion per month that
American citizens are paying on their student loans. Almost 9 billion a month. You know what? We’ll round it up. 9 billion a month, $9 billion per month, and
under Bernie Sanders plan, suddenly that $9 billion a month doesn’t go to the banking
industry. It goes elsewhere in the economy. We’re talking about a sudden infusion of $9
billion a month to the United States economy. And that’s what economists are starting to
look at now, even from Moody’s who are not the most progressive people on the planet. I can tell ya, but they’re looking at that
and they’re saying, okay, wow, this would actually be huge. And so what about the people who say, well,
how do we know they’re going to spend it because they’re not able to spend it? Now, student loan debt is one of the major
reasons why the millennial generation is having to put off things like home ownership, why
they’re having to put off things like buying a new car, why they’re unable to afford a
lot of the little simple pleasures that people take for granted, like going out to or getting
their car fixed or going to the doctor because they don’t have the extra money. Two to $300 per month makes a big difference
when you’re talking about a population that spends 99% of their paychecks when they get
them, not because they’re irresponsible, but because they have to. So that money will continue to be spent. It just won’t go sit in a vault at a bank
somewhere. It’ll go out there to local restaurants, to
local businesses, maybe even to big box stores. Who cares? It’s money that travels through the economy
now instead of going to a bank and stopping, that’s where that chain ends. When we’re paying student loan debt, but you
go to a restaurant, right? You tip your server, that person has a few
extra dollars in their pocket now that they ordinarily wouldn’t have had because you wouldn’t
have gone to that restaurant, so suddenly they’ve got a few more dollars that they can
go out and spend and so on and so forth. You go to a mechanic because you’ve needed
a new tire for three years, but you couldn’t afford it. Now you can, so you buy a tire. That mechanic shop now has an extra $200 in
their pockets that they get to do something with and so on and so forth. All throughout the economy. That’s what happens, but it won’t happen if
these people are still making those payments on their student loan debts. It won’t happen to the same degree under Elizabeth
Warren’s plan because you’re only going to take out about half the debt, maybe even three
quarters of the debt. That’s still not enough. This economy at the lowest levels is still
failing, is still struggling and has not recovered from the great recession. Bernie’s plan would put that recovery back
with working class people, and that is the only way to have true real economic recovery
in the United States.

100 comments

  1. So they can transfer their student loan to a home loan or a car loan. Screwed up economy when everyone is living on the if come – on a borrowed future. Sad.

  2. I want to support your channel, but I find the content a bit simplistic and shallow…and I politically agree with you. This video, for example, ignores the analysis that student loan reform is basically just a tax cut or tax refund. NO ONE (I think) is suggested the banks get stiffed, just that the government pay it off. (The banks do get stiffed on their free profits from student loans, but that is not the central issues.) The real questions is, if we want to add money back into the economy through a tax cut or through government expenses, is this the best way? Maybe? But certainly not better than funding food assistance, perhaps day care for poorer mothers, others. Student loan forgiveness will help out a lot of RICH and HIGH INCOME people in addition to helping out a lot of struggling people. If I am going to spend time watching your videos, I want information about some of the harder questions, not just left wing talking points.

  3. When people have to expect tens of thousands of debt they will need decades to pay back, they will not study at all or only study profitable jobs.

    Result: not so well paid technical jobs are taken over by foreigners, primarily asians, because these bring the required qualifications.

    Without the threat of the debt, way more people could study medium range engineering jobs and replace (or call it replenish) foreigners with US citizens.

  4. American Alumni call for relief. Thank you so very much for all y'all do so well. Hope y'all had a wonderful Thanksgiving weekend.

  5. This is a novel idea isn’t it. It will make the recession more flexible with less harm to the individuals and their families. We need to start organizing and do what you can. There’s a job for everyone.

  6. Really? Their logic is "how do we know they'll spend it?" Employers argue that stupid ass logic too to justify not paying their employees in the first place. "Even if they had the money they won't spend it, or they won't spend it right, so its better off staying in my pocket." Still waiting for them to campaign for the reduction of the minimum wage.

  7. WTF???
    I worked while going to school.
    I took out some loans too.
    BUT I PAID MINE OFF!!!!
    I scrimped and saved and worked really hard to pay it back.
    My classmates have not.
    Why should they be rewarded for poor behavior?
    Why should I be punished for being responsible?
    Is that a place where the lazy and less disciplined walk on the backs of the hard workers, a place you want to live?
    REALLY?

  8. Welp my boss just tried to argue against a minimum wage increase to me… explain to me how more money In my pocket hurts me? Yes rent will probably go up but it’s already been going up…. there is a massive problem with wealth inequality in America.

  9. If people have more money in their pocket they will have a tendency to spend more money. So many people have student debt that it would be a big boom I believe to the economy if people would spend just 10% of the money they are paying for loans

  10. That idea would work if: Control and stream line what colleges can charge for tuition. Cap the interest on future student loans, penalize or prosecute lending banks that do not complied.

  11. Well, hell, why don't we just switch to "From each according to his ability, to each according to his need." (slogan popularised by Karl Marx in his 1875 Critique of the Gotha Program. The principle refers to free access to and distribution of goods, capital and services.)

    I wouldn't vote for Bernie for village idiot.

    I don't disagree that student loan debt is weighing down
    the ability of many to participate in the economy. However, a complete, and UNFAIR, REDISTRIBUTION OF OTHER PEOPLE'S ASSETS is the absolutely worst way to do it. There are basically two types of student loan debt, federal government loans and private loans.
    I went to law school. I borrowed to cover the tuition. I have repaid it. Now you are going to tell me I have to also pay FOR SOMEONE ELSE'S STUDENT LOAN!??! Nope. Nope. Nope. I'll vote for tRump before I will vote for someone who wants to eliminate all student debt.
    The government has already moved to eliminate student debt for the fraudulent universities it helped support. Okay, I am in favor of that. Having to pay for a useless education, or outright fraudulent education really isn't fair. I got a legal education. I should feel that the burden of paying for it is someone else's responsibility? Is someone going to repay me for my student loan payments? If the government wants to give my employer the ability to give me up to say, $6,000-$10,000 per year in tax free fringe benefit, for the employer to make direct payments to the lender, I could agree to that. Perhaps the benefit could be tied to the salary, say up to 10% of the compensation could be this tax free benefit.
    Regarding private lenders, YOU GOTTA BE KIDDING! The government cannot, just willy nilly, seize a company's assets without compensation. You would IMMEDIATELY dry up ALL STUDENT LOAN LENDING. That will look good on a resume, "I have 1/2 of an engineering degree". Okay, that's about as useful as tits on a bull. So, the money you have already spent is now COMPLETELY WASTED.
    The Hump keeps telling us the economy is humming along at, essentially, 100% employment. Why are these people not employed, or making what they thought they were going to make? And, WHY DO I HAVE TO PAY FOR THEIR EDUCATION, TOO.

    Sorry, Farron, you are way off base here. I will remain subscribed, because I am interested in what you have to say, but I have to give you one of the dislikes on this one.

  12. Our blood sweat and tears, our bread and butter, our money is being channeled towards banks, multi million and billion dollar companies for the sole purpose of having numbers on paper to appease rich share holders. This greed needs stifling.

  13. Oldest trick EVER!! Get your hopes up just for a VOTE!!! They don't want to do anything nice like that. The SLD never should of been that high. Don't forget they LOVE and get money from the banks. If the banks don't say it forgetaboutit😮

  14. Glad Fallon made a video about this rather than another “orange man bad” video. We already know what Trump is. We need more videos on what we are FOR instead of what we are against.

  15. Ive never had any student loans, and I'm all for at least partially wiping out student loan debt for financially burdened/ low income folks, or making the loans 0% interest. However…..
    What happens to those who put up the $$ for students to go to school?
    Do they eat the costs? Does taxpayer $ cover those losses?
    If they eat the costs, would any institution ever want to loan students $ ever again?
    There has to be a solution that's fair for all involved.

  16. MSM, establishment politicians and their donors don’t want us to think about the monetary benefits of democratic socialism. They don’t want us to understand that climate change is already costing us so much. They don’t want us to understand that large portion of what we are spending on health insurance goes towards profits for health insurance companies, instead of benefiting our health.

  17. I was lucky enough to experience the good will of some samaritan paying off my student debt. I actually do spend the money I dont owe for this debt. I buy stuff i need and try to save some. I am not middle calls, I am working class. I got lucky, that's all.

  18. Yep, it’s not even complex economics. If more people have more spending power, businesses (including small businesses) will see better earnings. Medicare-for-all would have an even greater impact. The only reason people are opposing these policies is because amassed wealth = power, and they can’t stand the thought of having less power.

  19. The fed giving money to citizens instead of dumping billions into banks in the middle of the night would help the economy. Bailout the people not the corps.

  20. Unlike the lie that money will trickle down on working people if we give tax cuts for the rich, if we forgive student debt, this student debt cuts will trickle up to the rich because poor people have no option but to spend the little money they have. So if you want to stimulate the economy, pass student debt cuts.

  21. When you get too caught up in the progression of capitalism you forget how you got so much capital in the first place.

  22. Did the Economist just get out of 6th grade? because thats when I knew. So everyone wants college, but you still have to pay for it, why doesn't the government just pay for it like grade school? If people are in debt, then they cant spend that money.

  23. Significant point: the $ we pay the IRS pays for zero.

    All $ paid to the IRS is deleted upon receipt and only a spreadsheet record remains.

    This is because we have a fiat monetary system and all federal spending is brand new money created out of thin air by keystrokes on a computer at the federal reserve after congress decrees the expenditure.

    This is why we have trillions of $ for the military industrial complex and gave Trump’s trillion $ tax credit to the 1% without raising taxes.

    Federal taxes do drive federal spending but not to pay for federal programs such as social security and Medicare.

    Originally the federal government levied taxes on the people payable only in US$. That created a need for that $ and this need is what gives the US $ value.

    Additionally, the fair collection of federal taxes balances income and wealth distribution.

    This is why billionaires are afraid of Bernie Sanders becoming president because the 1% will lose their ability to buy congress and the presidency and the people of this democracy will regain their democracy.

    Understand MMT and how our fiat monetary system works.

  24. 9 billion a month people agreed to pay for an education. It was a choice. It may have been a bad one but enough with the govt handouts. I am not for reparations either. Understand that just because you have a degree you may still have to ride the bus and you may never own a house. Spend less money. How many pairs of shoes do you need? Can you pay rent? Can you eat? You're good! Should have made better life choices or studied harder. Not everybody can win. The are a lot of education success stories about people that went to a college they could afford and studied hard. People want a refund on their terrible choices? It doesn't work like that.

  25. Is that how far America has sunk ? you actually just called going to the doctor or the hospital a luxury item ! that should make all America sick to it's stomach . even the trumper's should understand that medical needs are not luxury items . they are necessities !

  26. 🎼🎵🎶 " Well you say there's gonna be a revolution, well NOW ya know……and it's NOT gonna be ( the) ALL right anymore! 🎶🎵🎶🎵

  27. I was paying for my oldest daughter , when his brother made him president and he crashed the economy my business got hit hard, she is still 65,000.00 in dept. My second daughter who was not planned is going to be a freshman in college next year, pay it all she's going to be a nurse.
    The richest people in this country benefit the most from our educated kids.. They work for them and their not on welfare, look at the bright side Rupert.

  28. I’m not for the elimination of student debts. 0 interest loans yes. The debt one creates is of their own making. I do agree 100% that putting all that money into the economy is a good idea. But I think the only way to be fair would be some guaranteed income for everyone. $200 to $500 a month. And put max caps on future loans. Maybe 30K. Then interest loans can kick in. For the most part you don’t need an expensive education to learn a craft. Look at tRump, he had an expensive education and 50 years later he’s still an idiot.

  29. But if we forgive the student loan debt Betsy DeVos and her friends would cry, oh that would be another reason to forgive it.

  30. I live in Germany and I never worried about paying for University. And our Economy is one of the strongest in the world.

  31. I'm curious of like my son he lives like a pauper to pay off his debt the last year and a half. He has more then half of his loan paid off. Well maybe he should just start living and wait to see if this pays off. You know as his mother I'm gonna be pissed if he pay off his loan and then they clear off all others. My oldest son paid off all his student loans as well.

  32. I learned software programming on my own from buying books and reading online. I was wise enough to avoid college altogether. So then how is that fair that I get no loan forgiveness and they do? This is why we need Yang!!!

  33. Not to mention corps won't have anything to do with healthcare…they don't have to provide insurance or pick up the bill if someone hurts themselves at work. I really don't see why they argue against it, it also means they would have healthier more-willing-to-work employees and more educated ones as well. They are only thinking short term, it's the long term solutions Bernie so graciously put up that will actually make America stronger than it's ever been!

  34. So… The $9 billion per month would diffuse into the economy, instead of going to the banking industry.
    What is the banking industry doing with that money now?

  35. The problem with our economy is it's only as good as what is being put into it.Unfortunately, the assholes who hold the majority just hording it. It's like they say. The only way to save money is to not spend it.

  36. So you can go to college and have a great paying job and not have to pay for it. Sorry! I paid for my own college and was responsible paying it off. If you can't afford then don't go to college.

  37. wow, deeply regret never borrowed a penny of that. May be should do it now before the policy effective. But why stop there? How about forget all credit card debts? That will be much stronger and more powerful to boost the economy. Better than that, why not erase the words personal responsibility f rom the dictionary?

  38. Of COURSE it would, the students could et on with their LIVES. BUT that IS the GOAL of the student loan – to PREVENT THE YOUNG FROM PARTICIPATING IN DEMOCRACY! If you are too busy working three jobs to pay off a student loan, you can't be fighting the oligarchy.
    (This is not a theory, several Repugs have admitted it.)

  39. I'm not paying mine until I find out what's gonna happen.

    Republicans never believe economists, the CBO, etc.
    Unless it suits them.

  40. I agree with Farron often, including on this.
    He says, correctly, that $300 a month is a big deal.

    A few days ago, talking about tax raises, he was saying $500 – $1000 a month wasn't that much, wasn't life changing. 🤦

  41. This is what they call The Helicopter Effect. If you drop money from a helicopter over a population, then people will spend the money thereby boosting the economy in the short term

    Of course the money would have to come from somewhere. We would have to borrow it or inflate the currency either would have a long term detrimental effect on the economy

    But that’s what we’ve been doing the past decades, producing the appearance of short term prosperity through borrowing. It’s not a good long term strategy

  42. Is this the trickle up economic theory? I like the government doing it’s job and helping the rest of us. Are you aware that women hold 2/3 of the student loan debt. A lot of single moms with children. And men desperately need the help as well.

  43. Or maybe how about pay off your debts. If you cant afford it. Either save or get a better job to help pay for college. Absolutely no reason why the government should have to pay off your debt cause your crap with money and cant save up.

  44. Excellent and practical explanation of Adam's Smith's "invisible hand" of market forces but for the real world… This is why a liquid and well paid workforce is better for business, not worse, it only works if the money stays in circulation. If all your customers have no disposable income then you eliminate a huge potential market to sell your goods or services to. (Why do Republication "think tanks" think that actually reducing the minimum wage could be a good thing for them, it contradicts their own philosophy…. THEY should be pushing debt forgiveness, not just the "progressive" Democrats)

  45. Give yourself the option, default. Otherwise, the greed doesn't stop. It does not. Default or pay up to $200 per month to see your principle diminish by $2. That's the nightmare (NOT the miracle) of compound interest. The greediest of pigs salivate when they hear teachers are in debt but are not teaching "for the money"… this is greed pig trough feed heaven when they hear this. Greed. Pig. Fucking. Feeding trough. Heaven.

  46. It would , but the corporate
    – fascists that own that debt
    have enacted laws not allowing
    that debt to be discharged
    in bankruptcy.

    If you believe for a second that
    a Democrat running for president
    would eliminate it if elected –
    it will never happen.

  47. What your readers want is a Marxist totalitarian society with zero freedom. Any economic productivity that takes place will be taxed into oblivion by the totalitarian freaks who they want to be in charge. And once they destroy that activity they will assign blame for the lack of taxable activity on treason and start shipping the productive people (whom they have destroyed) off to gulags and gas chambers. And then finally with no one producing, all the leftist mass murdering freaks will starve and continue to kill each other. It won't be my problem though.

    Guys like me and other people you might consider rich (since my asset base is several times what most of these leftists have on their student loan balance). Cool thing is that it's in crypto and most of my wealth is locked behind a solid wall of encryption. And the moment I see some leftist totalitarian sicko freak like Bill and Hillary get elected I'm out. I actually have the means to leave the country both financially and paper work. I've got my passport. I pulled the plug on my mechanic job (yes I'm a blue-collar guy with a 2 year degree and I know you have a low opinion of guys like myself). I find I can accept your disapproval without significant suffering. In order to really have your self esteem harmed by disapproval you have to respect those who are judging you but in this case that doesn't apply.

    I sold my house as well and banked the 300k I got for it (since it was paid off). No income tax on that 300k because I've lived in the house more than a few years (while I labored to pay it off early). And I'm living comfortably on that for the next few years. I don't even need to touch my crypto but it's always there if I need it. The only thing I have in the states are a couple pensions, the iffy promise of social security (which I may or may not start to get in 10 years), and a 2003 1 ton pickup truck and an awesome slide-in camper. I plan to spend the next few years running all over the country helping Permaculture along. Everything else I own is buried so deeply in encryption that not even I can retrieve it except under certain situations that occur every so often. And I can walk right through customs and truthfully say I don't have any crypto with me, and then once I reach the new country I can access that economic power to support myself. I have enough to live the rest of my life here in the states (even with the cost of medical insurance), but if I'm treated badly (or if there is even a hint it) I'm out. My first stop is probably mexico. I'm taking a trip down there soon anyway. There are millions of productive men out there who have already taken their power back from the system in another way. We MGTOW see how dangerous marriage and divorce is for us so we tend not to do it. That's the only reason I was able to retire 11 years early. We tend to opt out of divorce because it's destructive to us. See how the marriage rate has fallen? As you people turn the government into a Stalinist nightmare you will see good productive men such as myself leave or they will decrease their productivity to the minimum to prevent your government from stealing it (Just like the last time you people did this sort of thing (resulting in the soviet union)).

    When the time comes to cash in some crypto I'll keep it under 38k a year. That way my income will be below the minimum level for long term capital gains taxes. So basically I'll be paying ZERO income tax so that will put a serious limit on how much money you can rob from me, unless they change the IRS rules. But by the time they do that I'll be long gone.

    MGTOW

    .

    .

    Comment mirrored on dissenter in case some leftist freak flags it down or the channel owner deletes it. Be advised though. Censoring my comment will not change the facts. It will just prevent leftist freaks from learning how much resistance to their BS is out here in the real world. Then it will hit them in the face since they aren't expecting it. Feminists have the same problem since discussion of men's issues is censored and considered impolite to discuss so they never hear it. And then without understanding that men need to be treated fairly to keep them, they become lonely cat ladies since all their relationships will fail. Such women have no way of knowing that their choice to become a 300 pound, violent, disgusting, leftist freak would impact her romantic relationships. That's not my problem either.

  48. 4:05 That's retarded. If someone buys a tire from a shop the shop doesn't have that 200 dollars. It has to pay for the tire and it has to pay endless taxes for business and inventory, and income tax. Every time a dollar changes hand the feds take big chunk when you earn it and the state takes a big chunk of it when you spend it. There's very little left once a business gets that 200 dollars. Taxes take most of. And then when the dollar changes hands again it happens all over again. It pushes prices up and destroys taxable economic activity. But this is real world stuff not university bs. Things work differently in the real world.

  49. Aaaaannnndd…then there's Pete Bootyjudge, who has just told students they can go kick rocks. Don't buy the media hype, Americans, and do your homework BEFORE voting.

  50. You mean putting money in many people's pockets stimulates the economy more then concentrating all the money in a few pockets?…LULZ Even a child understands that logic except children are much smarter than rethuglicans.

    #Bernie2020

  51. Obama's administration blew it through it's lackluster piecemeal "regulations" and impotent lawsuits on for-profits who drove up tuition costs at all schools. They should have been shut down en mass long ago before the carnage.
    Easy access to high interest, rapcious Title IV student loan money literally gave them carte blance to financially rape taxpayers and especially first time players in the loan market like the unwitting students; especially those of color. Now the nitwit DeVos runs the show and she's wearing a whole new strap-on for those who have been sold on the knee jerk, often unscrutinized, American pipe dream. You want hallowed halls? Dump the transactionalist bastards on Wall Street who have the nerve to masquerade as educators on our dime.

  52. All you're saying its good to use taxpayer dollars to get people out of student loan debt, so they could into more debt. Eliminating anyones debt, credit cards, mortgages, car payments etc would all increase consumer spending- which would increase GDP. So no shit shirlock. I still have an issue with this, people need to learn restraint and not just get into more debt.

  53. This idiot thinks banks just stash all their money away in a vault 😂😂😂😂😂😂😂😂😂😂 holy shit, he doesn't know about fractional reserve banking.

  54. Banks dont loan money for student loans. Almost all student loans are done by the government, and colleges are run by the government. So in other words the government created the problem and now you are looking at the government to fix it. Colleges should be on the hook for bad student loans, this would incentivize them to stop offering worthless degrees. College is a waist of time and money, they are all fake teachers who are not doing what they teach.

  55. DEBTS MAKE THE BRAIN GO CUCKOOO… NOT GOOD FOR STUDENTS… THIS WAY WE WILL NEVER GET EINSTEINS OR TESLA, S.. 👈😡😡😡

  56. it would…. but they should do so by making the colleges or banks take the hit, not the taxpayers. And if we target the colleges,… thats a problem in and of itself as education in this country already needs some work and you can guess at the problem that would cause.
    Making banks take the hit, well they would fight it tooth and nail. Good luck getting that to happen.
    So you basically shit on the common taxpayer, which doesn't really solve anything. Just shuffles the problem of these peoples debts onto everyone.
    More for those in debt… less for everyone else.

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