WaPo columnist opposes debt cancellation because 'it just wasn't bad enough to justify government intervention'

Here’s a long thread from Washington Post columnist Megan McArdle about student loan cancellation, and it provides some valuable insights. McArdle paid off her student loans, so she knows it can be done. As she points out, as so many others have, the beneficiaries will be among the more affluent. Unfortunately, she has to kick things off by clarifying that she’s not jealous of those benefitting from loan forgiveness — those who have been demanding this student loan cancellation have no empathy for those who paid off their loans or never took them out … why should they have to “suffer” just because others suffered before them?

In any case, McArdle makes some great points:

Maybe some people are jealous. But there are other, better reasons that someone who paid off their loans might expect other people in that situation to follow suit.

— Megan McArdle (@asymmetricinfo) August 24, 2022

For starters, it does highlight certain unlovely distributional features of student loan forgiveness.

— Megan McArdle (@asymmetricinfo) August 24, 2022

The most obvious distributional problem is that there's no good reason to spend half a trillion dollars on the most affluent third of the country–but there are also distributional questions within that group.

— Megan McArdle (@asymmetricinfo) August 24, 2022

Someone who did a couple of years of community college and worked during school to minimize their loan burden gave up a lot of fun, and is now going to pay higher taxes so that their classmate could have the full "college experience". That's … not ideal.

— Megan McArdle (@asymmetricinfo) August 24, 2022

Someone who read Dave Ramsey and went "gazelle intense", sacrificing a ton of consumption in order to get themselves out of debt, cost themselves somewhere between $10-$20k. Those are … not great incentives.

— Megan McArdle (@asymmetricinfo) August 24, 2022

But hey, the federal government incentivizes all sorts of mildly irresponsible behavior and creates all sorts of weird, undesirable within-group distribution problems. If you're a libertarian this may keep you up at night, but everyone else just learns to live with it.

However.

— Megan McArdle (@asymmetricinfo) August 24, 2022

To be clear: it was not fun. I was very extremely broke. I knew the price of ramen in every supermarket within ten blocks of my house. I lived for double coupon day. Some months I walked miles to work, rain or shine, because mass transit just wasn't in the budget for that month.

— Megan McArdle (@asymmetricinfo) August 24, 2022

My clothes got pretty shabby. I did not go on vacations. Drinking out meant nursing a single drink unless someone else was buying. I'd have had way more fun in my twenties if the government had paid off my loans.

— Megan McArdle (@asymmetricinfo) August 24, 2022

But whatever you think the job of government is in ensuring people have the basic minimum–and I myself am fine saying the government should ensure no one freezes or starves to death–I think the government's job stops well before "gets to have nice clothes and go out a lot".

— Megan McArdle (@asymmetricinfo) August 24, 2022

Yes, there are people in tighter situations than mine–I was childless, and had lucked into a junior 1 br for the low low price of $1200 a month, which was cheap for NYC, leaving me several hundred dollars after rent and taxes to spend on frivolities like food and metrocards.

— Megan McArdle (@asymmetricinfo) August 24, 2022

I also had nearby parents from whom I could always cadge a meal when the grouch bag got really low.

On the other hand, there was no such thing as income-based repayment back then; I had to pay $1k a month whether I could afford it or not.

— Megan McArdle (@asymmetricinfo) August 24, 2022

We’re amazed by all of the people tweeting that $10,000 in student loan cancellation will enable them to buy a house, travel, start a family, start a small business, etc. No wonder they’re so bad with money.

I see no evidence that today's high-dollar student loan grads are on average worse off than me, with $1k a month to pay on a salary that ranged between $40-50k. And I see no reason to pay off the student loan debts of low-dollar borrowers, rather than say, their car debt.

— Megan McArdle (@asymmetricinfo) August 24, 2022

We already go to great lengths to make sure that student loans do not push folks into severe distress. For those who end up there anyway, I think the solution is making student loans dischargeable in bankruptcy; it's incredible to me that we did blanket forgiveness, but not that.

— Megan McArdle (@asymmetricinfo) August 24, 2022

Anyway, having paid off $100k of student loans on a salary of much less than $100k, the reason I think others in that situation should also pay off their loans is not because I'm jealous of them and want them to suffer. It's because I know it can be done.

— Megan McArdle (@asymmetricinfo) August 24, 2022

I’m guessing by your job and what I’ve read and heard you say is your at the top level of your profession. Not everyone will be as successful or as diligent as you have been. That forgiveness will most likely make a huge difference in their life. It probably wouldn’t have yours

— mark (@chillersnosk8) August 24, 2022

I paid off most of my loans while laboring as a junior staffer at the Economist.

— Megan McArdle (@asymmetricinfo) August 24, 2022

You went to two Ivy League schools. You’re not typical. You had a huge loan, but the psychic benefit of knowing you can change professions with those degrees if need be shouldn’t be underestimated.

— Pulkit Agarwal (@pulkit_agarwal) August 24, 2022

I ended up in journalism after spending two years trying to secure a better paying job. I had no belief, then or now, that I could go do something more lucrative.

— Megan McArdle (@asymmetricinfo) August 24, 2022

"It can be done", "I did it once" so everyone should climb Mt Everest with no oxygen during the winter.

— Roberto Iannucci (@Rosso__Malpelo) August 24, 2022

If I thought "paying off your debt" was equivalent to climbing everest without oxygen, I would not suggest it. Though I would then also say it was irresponsible for the government to be loaning money on such worthless degrees in the first place.

— Megan McArdle (@asymmetricinfo) August 24, 2022

As we said, it’s a shame she has to clarify she’s not jealous, because so many people in the replies are dragging out the usual tropes:

A four minute mile CAN be done but doesn't mean I should kill myself trying.

— missing flag pole position (@BoringGuybdr) August 24, 2022

I had cancer and didn’t die but I don’t think other people should have to have cancer

— guy with $10,001 of student loan debt (@AaronCampeau) August 24, 2022

"I know it is possible to suffer extraordinarily because I have suffered extraordinarily. This is why I think others should be made to suffer extraordinarily instead of removing reasons for suffering."

— Enrique 'The Barnacle' Shockwave, Esq. (@Photojournik) August 24, 2022

I used to use the internet on a dial up connection. Nobody should ever have anything better than that because I know it can be done.

— Adam (@AlbersAdam) August 24, 2022

Mom and Dad paid for it too. Amirite?

— BeaviSkywalker (@BeaviSkywalker) August 24, 2022

Are these people listening to themselves? Others should be made to “suffer extraordinarily” by voluntarily taking out loans to go to college? There’s so much talk of “suffering,” but all these people still have high-speed internet to get on Twitter and bitch about it and cry that the government owes them this.

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