Why the student loan debt crisis didn't collapse America ???????#Economics#BearsCantReadDataCorrectly
Posted by Logan Mohtashami on Sunday, November 18, 2018
Bill Mitchell was pointing out an inconvenient truth when he said “Progressives are neoliberals in disguise / Greens are neoliberals on bikes”!
One of the Pure MMT for the 100% insights is that political ‘prescription’ MMTers are unwittingly peddling policies that an actual ‘neoliberal’ would love too.
For example, the unintended consequence of the progressive ‘Wipe Out The Student Debt’ agenda is more dollars flowing to the top 5%.
In the enclosed video, Logan (who refers to the prescription MMTers as the ‘extreme ideological people’) explains. By the way, just in case you are wondering if Logan understands MMT, read this quote and decide for yourself:
“Student loan debt was never a crisis in terms of macroeconomics. If we had a high percentage of home loans delinquent, of credit cards delinquent, if we had 30% of auto loans in delinquency, we would see it, in the economy; but not for student loan debt, why, because those loans are tied to the federal gov’t and the federal gov’t is a bank that has unlimited ability to borrow —so there’s no concern about that, there’s no runs on private banks with student loan debt.”—Logan Mohtashami
Also note that Logan is NOT bashing the Wipe Out The Student Debt ‘prescription’. In fact, he goes on to say that it’s for the voters to decide (and he actually does think that over time the federal gov’t will provide some form of free college because it’s not expensive compared to the rest of the federal budget). What Logan concludes here, however, is what Pure MMT has been saying all along (warning about feeding $$$ into the saving bubble —instead of creating a feedback loop out of the savings bubble).
“Here’s the problem with ‘Wipe Out The Student Debt’. If you don’t understand how data works, student debt looks like this daunting thing and you believe that college-educated Americans are sitting in little tents eating ramen.”
“Here’s the breakdown, 70% of all student loans is actually under $15k—not so daunting. People with over $70,000 of student loan debt is a very small portion of society. Of these people who do have 70k – 100k of student loan debt, they are usually rich people.”
“These are the people that make money, that have healthcare, that have homes, cars and a 401k. Don’t worry about these people. Trust me. They are the people that make the most money, the people that work the most, and the people that have the lowest unemployment.”
“The ones that have the highest student loan debt are the people that are the wealthiest. So in a sense, by saying ‘Wipe Out The Student Debt’, you are facilitating wealth inequality.”
In addition, which Logan is happy to see, the (‘progressive’) New York Times agrees:
Thanks for reading and HAPPY THANKSGIVING,
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P.S. Regarding the federal ‘job guarantee’ proposal, this was Warren Mosler’s tweet (a reply to a Global Institute for Sustainable Development’s tweet sharing a poll finding that says 52% of Americans support a federal JG, even more so if those jobs help mitigate and adapt to climate change. 66% support Green New Deal-style proposals):
“I see those jobs as ‘standard’ gov jobs with standard federal pay and benefits etc. The jg isn’t meant to replace/undermine ‘normal’ gov employment.”—Warren Mosler
Perhaps Mr. Mosler is now seeing what Jim ‘MineThis1’ Boukis and Charles ‘Kondy’ Kondak have been saying all along at Pure MMT for the 100%, which is that we already have a military and a civil service (we already have a federal ‘jg’) that could do those jobs.
It seems like Mr. Mosler (now that midterm elections, including his own, are over and he is back to thinking in clear economic ‘description’ MMT mode instead of political ‘prescription’ MMT mode) is getting concerned about MMTers framing their jg as being needed to do those jobs. Which would have the unintended (‘neoliberal’) consequence of replacing/undermining the military & civil service workforce—as well as all other (‘progressive’) automatic stabilizers already in place.