Has U.S. Democracy Been Trumped?

[pilowsky]

If you think economics is a dry subject (people that don't play Bridge all the time).

Or if you have never travelled,

Or if exchange rates don't make sense to you.

Then you don't know about the macPPP - that's the Big Mac PPP - not the computer nerd one.

You can read about it here: The Big Mac Index.

Economists wanted to synthesise all the elements of an economy into one small packet (product).

They needed something that:

1. Is freely available all over the world
2. Purchased by almost everyone
3. Purchased frequently
4. Didn't cost much
5. Was uniform in its size shape and content.
6. Incorporated as many elements of the economy into one unit as possible

What they came up with was the Big Mac. It costs <$10; It is purchased all over the world - frequently (unfortunately), and wherever you buy it, it is the same - in theory.

Hamburger companies tolerate only small variations in their products - the UK is the only place in the world where you can get sachets of vinegar with your "fries" - or chips as people living in the 'pink' countries (the colour of Commonwealth countries on old maps) call them.

Mind you, since we are discussing a macPPP maybe 'chips' is a better term.

 

So, what goes into a Big Mac that makes it so suitable for this purpose?

It has extensive labour input - people have to make the thing and manufacture the ingredients.

It includes all of the major components of the economy - transportation, energy,

All Demographics consume it - from Pauper to President - hopefully not so much now.

Like gambling, cigarettes and alcohol, it is simultaneously desirable and repellent - theirs a cost to consuming it.

Large amounts of real estate are involved.

Entertainment is involved.

This one shitty piece of food is a microcosm of society and economy.

 

The same is true of currency. Each currency unit contains all elements of an economy in a small banknote (even a 'virtual banknote').

To accurately compare 'economies' compare the cost of a Big Mac in each one.

Currently, the USD has been steadily dropping against the UKP. In Feb 2020 it was .87. Now it is .72.

The cost of a Big Mac in the USA is 5.66, in the UK it is 4.44 (in USD) giving a ratio of 0.78

this means that ATM (not automatic teller machine) the UK currency is Undervalued by >10%.

 

Another useful economic indicator that I created is the "Capuccino test".

The cappuccino test measures "opportunity cost".

Suppose you see something that you quite like and it costs around $50, but you don't desperately need it.

Apply the Cappucino test. Would you spend this money on a luxury item that costs as much as another 'real-world' item such as a Cappuccino?

 

It basically creates an 'external locus of control' to decide how much you need it. In Bridge terms, a fiscal puppet perhaps?

 

I applied the same approach to real-life Bridge Clubs - they really came up short compared to Bridge as a video game.

 

This same principle can be modified and applied in many real-life situations.

 

The most important and valuable thing to come out of all this is the sure and certain knowledge that you should not travel to Switzerland to buy a big Mac - they charge (in USD) 7.29 - it's like buying a milkshake at Harrods. What's the point?

[awm]

2. B. I don't know how a "means-tested" programme can be administered efficiently while ensuring that deserving people definitely receive their cheque. There is a certain simplicity in keeping the programme more broad-based. I simply don't know enough about this topic to comment with any degree of certainty.

 

It is worth nothing that there is a known issue with "means-tested" programmes if they are based off your 2019 tax return. The adverse economic impact of Covid occurred in the 2020 or 2021 tax years and it is quite possible that incomes in these years for large swathes of Americans are well below their 2019 income. The Govt. risks not helping these people if they rely on a 2019-income based test.

 

There is a very simple solution to this problem. You send everyone a check. Then you raise taxes on high incomes.

 

If you really want a means-tested program, you make it a one-time clawback where if your 2020/2021 income is not substantially less than your 2019 income (and you're at least comfortable overall) you have to pay back the stimulus amount. If you want to reduce the debt you raise taxes on high incomes by more than this.

 

This way the IRS can do the means-testing after the pandemic calms down (when taxes are due) and all the government has done is give a low interest loan to a few people who didn't need it for a year or so (while helping people who definitely did need help and stimulating the economy).

 

We have a friend with a chocolate-making business here in Switzerland and she gets checks from the US government because she's a citizen. It is funny that they are stimulating the Swiss economy! Our friend's chocolate business was actually helped by the pandemic (because her competitors' walk-in stores are closed and she can compete online on more equal footing) but of course the US won't know this until they see her 2020 tax forms.

[helene_t]

There is a very simple solution to this problem. You send everyone a check. Then you raise taxes on high incomes.

Yes.

 

This discussion about whether it is right to give social benefits to well-off people comes up regularly.

 

It may seem wasteful to give free health care, free school meals, child benefits etc etc to people who can easily manage without it, but it may be simpler just to provide benefits to everyone and then adjust with the income and/or wealth tax as appropriate.

[kenberg]

With the pandemic, and it's the pandemic that has led to much of the stimulus, I think we start with the kids. People with kids have problems that I don't have. Back last March or April or whenever the first stimulus was, there maybe wasn't time to think this through. But now we have had a year to think about it. Some parents have been hit harder than others, sure, that's always the case. And yes, there are some whose kids are gone, or never existed, that need help. But on the whole, it's the kids and their parents that are really getting whacked by this. I am not saying that I know exactly what we should be doing, but I think the focus should be on the kids.

[Winstonm]

A problem inherent in the Covid stimulus is that it needs to be done rapidly so fine-tuning who is eligible has to take a back seat to expediency. The claw-back with taxes approach makes a lot of sense - too much sense for Republicans to ever agree to it.

[johnu]

There is a very simple solution to this problem. You send everyone a check. Then you raise taxes on high incomes.

I have previously suggested that stimulus payments should be based on who actually needs them, based on their income loss from the pandemic. If you have the same income during this pandemic as you did before the pandemic, you wouldn't necessarily be entitled to payments. So, if you were making $40,000 a year before the pandemic, and you are still working and earning at a $40,000 rate you wouldn't be entitled to payments. If you were at $100,000 before the pandemic and lost your job so are at $0 income, you could get a stimulus check.

 

I haven't seen any numbers on this, but I'm guessing 80-85% of the working population did not suffer a catastrophic decrease in income during the pandemic.

[pilowsky]

I have previously suggested that stimulus payments should be based on who actually needs them, based on their income loss from the pandemic. If you have the same income during this pandemic as you did before the pandemic, you wouldn't necessarily be entitled to payments. So, if you were making $40,000 a year before the pandemic, and you are still working and earning at a $40,000 rate, you wouldn't be entitled to payments. If you were at $100,000 before the pandemic and lost your job so are at $0 income, you could get a stimulus check.

 

I haven't seen any numbers on this, but I'm guessing 80-85% of the working population did not suffer a catastrophic decrease in income during the pandemic.

 

Your guess might be slightly off; unless you are talking about Jeff Bezos, ITC professionals, people that don't get paid by Trump and neurosurgeons.

 

"As of May 31, about one-third of people surveyed in the United States lost 10 to 25 percent of their income over the past 4 weeks due to the coronavirus pandemic. At the same time, it's the U.S. who, with 13 percent, has the highest share of respondents who lost all their income."

 

This is survey data from 'Statista" - A usually reliable source.

There are multiple factors at play that determine whether or not a person may require financial support in an emergency.

1. Which sector of the economy they live in.

2. The proportion of household income that they normally spend.

3. Whether or not they are included in the census data of the country in which they live.

Regarding 3. The USA is notorious for vilifying 'undocumented immigrants' as they call them and then using these same people as slave labour.

In America, the base hourly rate is $7.25. This is enough to buy a Big Mac, fries and a coke. Around 2 million Americans are trying to live on this.

If you wonder how easy it is to sustain one person on an "income" as pathetic as this, I suggest that you read Jeffrey Steingarten. Steingarten explains in excruciating detail that the Hollywood fantasy that 'anyone can cook' is just that: a fantasy.

So, what happens when the thin (gossamer in the USA) veneer of civilisation is torn away.

Ordinary people starve.

In the USA, absolutely everything that people have depends on continuing employment: food, health care, shelter - everything.

In non-developing countries such as Australia, Sweden and Canada (to name a few). The health education and welfare of its residents are not dependent on the whim of their employer.

This is just one reason why America is a failed state.

If you can't even look after your own when they need it, what are you?

This is - in my opinion - why Trump was elected. He lied to the people that the State forgot. he told them that he would care for them 'bigly'. He would remove all the evil people from Washington (synecdoche for the polity of the USA), so they could all get a fair suck of the sav. Of course, what Trump meant was that he wanted to eat the whole f**king sav and screw anyone that tries to stop him.

In this way, Trump is the same as the phone scammer that wants to help you fix your computer problem.

 

 

[y66]

Trump’s lawyer is giving the speech you give when you have to stall because the actual lawyer is stuck in traffic.

 

Trump is probably watching this at home like: ‘What the hell is wrong with this guy? The ad on the side of the bus said he was the best. Why would he be on the bus if he’s not the best?’

[kenberg]

Well, Trump'slawyers have to argue that the trial is unconstitutional when it clearly is constitutional. This can lead to babbling. I can imagine him trying to think of a suitable slogan. How does it go? If the glove fits you must not acquit? Something like that.

[Zelandakh]

Well, Trump'slawyers have to argue that the trial is unconstitutional when it clearly is constitutional. This can lead to babbling. I can imagine him trying to think of a suitable slogan. How does it go? If the glove fits you must not acquit? Something like that.

. Trump's slogan:

[y66]

Your reminder that while Trump's lawyers are behaving ridiculously, Republican senators are poised to behave disgracefully.

[kenberg]

The first purpose of any trial is to convict or acquit the accused. But it also is a time when society says either "What you did is not acceptable" or "We are fine with what you did".

 

So we need the trial, we need the evidence laid out, and then we need the senators to cast their votes. On this it is not a matter of liking or not liking Trump, it is a matter of judging his actions. Like him or not, did he or did he not cross a line. So it will be decided. I believe that I both would be and should be in jail if I had done as he did. But we shall see how it goes.

[johnu]

Well, Trump'slawyers have to argue that the trial is unconstitutional when it clearly is constitutional. This can lead to babbling. I can imagine him trying to think of a suitable slogan. How does it go? If the glove fits you must not acquit? Something like that.

Why is the Senate debating whether the impeachment trial is constitutional? That is a question for the Supreme Court.

 

In other news, Senate Democrats introduced a resolution stating that (2 + 2) = 4. The vote was 51-50 with all the Democrats voting for the resolution, and all the Repugs voting against the resolution.

[Winstonm]

. Trump's slogan:

 

Trump: I'm a liar and you're my choir.

[Zelandakh]

The Pence timeline emerging from the impeachment trial is quite remarkable:-

 

2:24:22 @realDonaldTrump tweets: "Mike Pence didn’t have the courage to do what should have been done to protect our Country and our Constitution, giving States a chance to certify a corrected set of facts, not the fraudulent or inaccurate ones which they were asked to previously certify. USA demands the truth!"

 

2:25:50 Secret Service hustle the VPOTUS down stairs in the Senate moments ahead of the Trump mob.

 

Hard to believe that 90% of GOP Senators could acquit and yet that seems all but inevitable. The only way would be an extremely unlikely backlash from Trump's base. Given the way Day 1 was covered in the RW Bubble, I won't hold my breath on that.

[pilowsky]

The Pence timeline emerging from the impeachment trial is quite remarkable:-

 

2:24:22 @realDonaldTrump tweets: "Mike Pence didn’t have the courage to do what should have been done to protect our Country and our Constitution, giving States a chance to certify a corrected set of facts, not the fraudulent or inaccurate ones which they were asked to previously certify. USA demands the truth!"

 

2:25:50 Secret Service hustle the VPOTUS down stairs in the Senate moments ahead of the Trump mob.

 

Hard to believe that 90% of GOP Senators could acquit and yet that seems all but inevitable. The only way would be an extremely unlikely backlash from Trump's base. Given the way Day 1 was covered in the RW Bubble, I won't hold my breath on that.

 

I wish they would hold their breath.

[Zelandakh]

Oh my, the timeline just gets worse. It seems that Trump was actually informed directly in a phone call around 2:15 from Capitol Hill of Pence being in immediate danger, then almost immediately sent out the tweet I previously posted. I hope everyone has been able to get all of this. I did not watch all 8 hours straight through and might be missing bits. I would imagine for conservative media viewers it might be quite difficult to be able to piece everything together.

[pilowsky]

Oh my, the timeline just gets worse. It seems that Trump was actually informed directly in a phone call around 2:15 from Capitol Hill of Pence being in immediate danger, then almost immediately sent out the tweet I previously posted. I hope everyone has been able to get all of this. I did not watch all 8 hours straight through and might be missing bits. I would imagine for conservative media viewers it might be quite difficult to be able to piece everything together.

 

I hope you aren't referring to those lovable friendly patriots that strolled quietly into the Capitol to have a quiet chat with their representatives.

 

Charming folks.

[pilowsky]

Elsewhere, I have commented that America is a failed state.

I have been castigated and taken to task by Americans with statements along the lines of "How would you know" or "But America is the greatest country in the world" or "If it were not for America there would not be Democracy in the world."

All of these statements are either red herrings or demonstrably wrong.

As a new publication in the Lancet shows, 40 years of incompetent economic polity in America has meant that while the America of the late 1970s America was a proud member of the so-called 1st world countries, it is now a pitiful example of what happens when you believe your own advertising.

Here is the reference: https://drive.google...iew?usp=sharing

Authors come from Harvard and UCSF amongst others.

Figure 1 (see below) alone tells the story of what happens when rank individualism is cherished at the expense of caring for the entire community.

 

Whenever someone in America suggests a timid policy that might benefit the population as a whole, they are derided as 'Socialist' or 'radical left-wing Democrats'.

If this poverty of understanding about how a first-world country manages its affairs persists for much longer, the damage may become irreversible.

 

 

Life expectancy in the USA is now ~ about 78 years in other countries around 82. This difference of 4 years means that the 'average' American is about 5% worse off than people in comparable countries.

But this is much worse than it appears because the years after 65 are years where an individual ought to expect to enjoy retirement after a long working life.

Instead of 17 years of retirement, an American gets only 13 years. Remove 3 years for end-of-life health problems, and the picture is even grimmer. 10 vs 14 years. Other countries get 40% more.

 

A key point that this study reveals is that while Trump came to personify all that is wrong with governance in the USA, he arrived on fertile ground.

 

Since this is a Bridge Forum, composed of an aging demographic, these data are even more devastating.

 

Yet, despite all this, I hear rusted on Democrats claiming that socialised medicine is awful and that Bernie Saunders is the devil incarnate.

 

In Australia, someone like Bernie would be considered relatively moderate in the Labor (correct spelling) party of Australia.

 

One of Australia's most brilliant politicians, Barry Jones, wrote in 1982 about the effect of technology on work and society in "Sleepers, Wake!" - his advice is even more cogent now.

[y66]

https://www.slowboring.com/p/relief-multiplier?token=eyJ1c2VyX2lkIjo3NTkzNjUyLCJwb3N0X2lkIjozMjM4MDgxMSwiXyI6IlFBcEZlIiwiaWF0IjoxNjEzMDU2MTg5LCJleHAiOjE2MTMwNTk3ODksImlzcyI6InB1Yi0xNTkxODUiLCJzdWIiOiJwb3N0LXJlYWN0aW9uIn0.aLYgVN03cecv2EsIwhR9_APBjKBXBQByWyGZls2HrZI

 

I want to revisit Tuesday’s article “The $1.9 trillion relief plan is not too large,” both because it quoted economist Ernie Tedeschi laying out some budget math that I don’t think is correct, and more broadly because after more conversations I think I can now describe a different — and somewhat stronger — argument against the size of the relief package than the inflation-centric one I rebutted on Tuesday.

 

Basically, I think the argument that the Biden relief plan will spark some huge amount of inflation is not credible, but the idea that it’s in some sense wasteful and delivers a fair amount of money that’s not strictly needed is pretty reasonable.

 

I don’t find this especially troubling, but others do, either for reasons of fastidiousness or based on concerns about the longer-term political consequences. But I do think it’s mathematically correct. If you shrugged off all the political constraints, you could develop legislation that’s better targeted than this.

 

...

 

How bad is it to be wasteful?

This is where the output gap math becomes relevant again.

 

If you believe the CBO’s relatively low output gap forecasts, then this really is just too big. If you’re like me and you think they’re missing the boat, the bad timing doesn’t seem so bad to me. State governments that don’t really need the extra money that they are getting will think of something to do with it over the next 2 to 3 years. Similarly, households that get checks that aren’t spent right away will spend them later. Money is money, and it will get spent. Meanwhile, the people and governments who are hard-up will get much-needed relief.

 

Of course, if you’re really anxious about debt, then this hand-waving “eh, it’ll work out” is not that convincing.

 

All I can really say to this is that with inflation-adjusted interest rates on government debt below zero, I just fundamentally think that’s wrong. It’s irresponsible not to be borrowing more money.

 

But then you get to opportunity costs. Granting that some kind of $1.9 trillion package was warranted, was this $1.9 trillion package warranted? I think that’s the strongest criticism Summers raised — maybe we could have cut out hundreds of billions of dollars worth of short-term low-multiplier federal spending and poured it into infrastructure projects that would get built over the next 2-3 years and have all kinds of huge long-term benefits. And I think as long as you leave it on that level of abstraction, it’s pretty compelling.

 

How would it work, though? After Democrats won the Senate on a promise to give a full $2,000 in direct payments, I think they basically have to deliver. And if you're going to do state and local aid, the simplest way to do it is to push money out through existing funding streams that ensure everyone gets some. Skimping on the actual virus stuff to go build broadband in northern Maine would be nuts. So then you start looking at the stuff that actually does have a strong multiplier — Unemployment Insurance, SNAP, an enhanced Child Tax Credit, etc. — which seems like a weird area to cut.

 

Probably the biggest opportunity cost here is in terms of not building automaticity and triggers into the package.

 

The federal government splits Medicaid costs with states using a formula called FMAP. Jason Furman, the top Obama administration economist, has this plan to make FMAP payments variable based on state-level unemployment rates. That’s a way of doing state and local aid that would target the funds to the states that actually need money, and would also be infrastructure to help prevent future recessions. We could make the bonus UI ramp up or down based on what’s actually happening with job openings. Lots of clever ideas about automatic stabilizers have been kicking around for years, and congressional Democrats keep refusing to pick them up for bad reasons. I wish they would pay more attention to the substantial importance of automaticity and worry less about CBO scores.

 

But the biggest thing I think is that on pure politics, you have to give credit where due.

 

Biden’s plan is very popular

The Summers criticism that makes the most sense economically is that the marginal parts of this plan are just not important enough on the merits to be worth burning down Biden’s political capital. It would be a shame for a president to make his political legacy a bunch of middle-class people getting a random, one-off $1,400 check.

 

But in the real world, does this critique make sense? The “political capital” metaphor always seems odd to me, because how do you know which things let you accumulate more of it versus which things let you spend it down?

 

I think the more straightforward thing to say is that in addition to evaluating a president’s decisions on the basis of how much good they do in the world, you want a president you like to make decisions that are popular rather than unpopular. I favor a carbon tax, for example, but there would be no point in Biden pushing through a carbon tax by a 51-50 vote on a reconciliation measure only to tempt a massive midterm backlash that leads to — among other things — its repeal.

 

But I don’t see any evidence in the polling that the president is costing himself anything by pushing this plan.

 

Polling isn’t the be-all and end-all of policymaking. But it’s hard to see exactly what the “political capital” concern here would be.

 

Biden’s team claims to be working on a second request to Congress for some kind of infrastructure-focused recovery plan in order to complement the rescue plan we’ve been talking about. I’ll be interested to see what that looks like. I’m a bit of an infrastructure skeptic compared to a lot of economics writers I know, since this country has a bad habit of blowing resources on dubious projects. But maybe that’s one reason I kind of like the structure of the rescue plan. By not using infrastructure spending as an emergency employment scheme, I hope we are laying the groundwork for an infrastructure plan that’s actually about infrastructure and not about “job creation.”

[Winstonm]

A big problem here in the U.S. is our methodology of belief formation. One can either form a belief due to evidence - to believe, In lieu of evidence, one must fall back on imagined reasons one has created - made belief. The faith-based belief systems inherent in religious populations indoctrinate populaces to accept non-evidentiary belief formation as equally valid.

[kenberg]

Thanks for putting up the Yglesias article https://www.slowbori...BQByWyGZls2HrZI

 

I am reading it, I will think more about it, I will follow some of his links, including one to Krugman. I find Krugman repulsive, but a repulsive person can still be worth listening to.

 

As an egocentric, I could say Yglesias must have read my post, or my mind, taken me seriously, and responded. I'm not that egocentric.

 

Analogies are dangerous but I will illustrate my thinking by bringing up student debt. Numbers that describe the problem vary, but I gather there is something like 1.5 trillion in student debt. Here is a question: What genius thought up this program? Someone said "Let's lend $20,000 a year to a student for four years" and no one noticed that after four years the student would be $80,000 in debt? Did the designers of the student loan program not notice that it would result in massive student debt or did they notice and just figure that dealing with that would be someone else's problem?

 

Let's look at one of the current issues, the stop on evictions. Suppose we have a husband and wife and three kids living in a rental unit. Surely we do not want them evicted. So we forbid it. But, as I understand it, the rent is not forgiven. For a family of five, at least in an urban area, the rent much be at least $2000 a month. So after a year, they owe $24,000. Really it looks like this will go on beyond a year and, for many, I bet that the rent is more than 2K a month. So there will be a debt of 30 or 40 K. Then what? I am not saying I know (although I have thoughts on it) but I am saying that it should not be left as a problem for later. Last spring we needed to act quickly, it made sense to skip over some long-range issues. Not now. We have had a year to think about how to handle this and we should expect some clarity.

 

On many things, it's as if planners say "Oh. Debt? Forget debt. Why would we worry about debt?". I am very much in favor of helping people both in general and at this awful time. I favor keeping small businesses alive. I favor helping the economy. But I react badly to those who just refuse to even think about how accumulated debt could pose a long-term problem.

[Winstonm]

Concerning long-term debt of a nation: if you work for "x" dollars per day, you certainly do not want to go too far into debt because your ability to repay is limited; on the other hand, if you can legally create money from nothing there is no limitation and the only real concern is putting so much extra money into the economy that it becomes less valuable.

[kenberg]

Concerning long-term debt of a nation: if you work for "x" dollars per day, you certainly do not want to go too far into debt because your ability to repay is limited; on the other hand, if you can legally create money from nothing there is no limitation and the only real concern is putting so much extra money into the economy that it becomes less valuable.

 

Yes, of course. But let's take it to extremes.

States are in serious trouble financially. We could give every state 40 billion, that would help.

Small businesses are hurting. We could give every business employing fewer than 100 people a grant. Say $30,000 for each employee.

We could cancel all student debt.

Schools are having severe problems. Give each school district a grant of $25,000 per pupil.

I could easily think up a few, or maybe many, more.

 

Do you think that somewhere along the way we will have to prioritize spending? Is there a limit? Can the federal government pay off all student loans, pay all of the rentals on all families who are having financial difficulties, similarly make mortgage payments for those having trouble, buy every child an $800 computer and a dog to keep them company, and so on?

 

 

I am aware of the fact that the government can print money. That I accept. And I accept that having national debt is ok, perhaps even beneficial at some level. My issue is not that we need to balance the budget every year. I am claiming that even if we can print money the fact that we can do it does not mean that there is no need whatsoever to exercise restraint.

 

Here is a specific case that I mentioned above, student debt. What were the designers of this program thinking? Calling it a student loan program certainly suggests that they were anticipating that the money would be paid back. Were they lying when they presented it as a loan program? Were they thinking "Oh, we will just rum up a debt of 1.5 trillion or so and then we will use government funds to pay it all off?" Is that what they were thinking? I seriously would like to know what they were thinking. What I am thinking is that if someone designs a loan program, which people understand to be a program that lends money that is to be paid back, and then they say "Oops, we came up a trillion or so short but no big deal, we will just print some more money" then that person (or group of people) should never again be put in charge of anything.

[pilowsky]

Yes, of course. But let's take it to extremes.

States are in serious trouble financially. We could give every state 40 billion, that would help.

Small businesses are hurting. We could give every business employing fewer than 100 people a grant. Say $30,000 for each employee.

We could cancel all student debt.

Schools are having severe problems. Give each school district a grant of $25,000 per pupil.

I could easily think up a few, or maybe many, more.

 

Do you think that somewhere along the way we will have to prioritize spending? Is there a limit? Can the federal government pay off all student loans, pay all of the rentals on all families who are having financial difficulties, similarly make mortgage payments for those having trouble, buy every child an $800 computer and a dog to keep them company, and so on?

 

 

I am aware of the fact that the government can print money. That I accept. And I accept that having national debt is ok, perhaps even beneficial at some level. My issue is not that we need to balance the budget every year. I am claiming that even if we can print money the fact that we can do it does not mean that there is no need whatsoever to exercise restraint.

 

Here is a specific case that I mentioned above, student debt. What were the designers of this program thinking? Calling it a student loan program certainly suggests that they were anticipating that the money would be paid back. Were they lying when they presented it as a loan program? Were they thinking "Oh, we will just rum up a debt of 1.5 trillion or so and then we will use government funds to pay it all off?" Is that what they were thinking? I seriously would like to know what they were thinking. What I am thinking is that if someone designs a loan program, which people understand to be a program that lends money that is to be paid back, and then they say "Oops, we came up a trillion or so short but no big deal, we will just print some more money" then that person (or group of people) should never again be put in charge of anything.

 

What they were thinking was "Let's design a system that is so cruel and iniquitous that only rich people will be able to avail themselves of an education".

Any knowledge is dangerous they want to keep it away from the 'have nots'.

 

Pricing education out of the rich of people that have no money is an excellent way to achieve this goal.

 

For every heartwarming Hallmark story (a whole genre of American fiction) about some poor person that struggled and succeeded there are dozens of people that didn't.