You're hearing a lot of posturing about student loan debt, but actually, some of it's true. Student loan debt really has crushed a generation, maybe multiple generations of American young people. If you're wondering why your kids aren't married or even living on their own, student loan debt may be a big part of the reason. They can't afford to. They're ad hock to some well-manicured diploma mill whose degree turned out to be worth a lot less than advertised.
A five-year communications major from Arizona State. Perfect. Step right this way. You're now a barista in a strip mall. The whole thing's a scam, obviously. Think timeshares in Cabo without the waterfront condos. We said all of this many times on the show. College debt is real. It's hurting young people and there's really no good reason for it. So, when Joe Biden announced today that he plans to cancel some of that debt, the obvious response would be to celebrate the announcement, but we didn't right away. Instead, we paused to learn the details about what he was proposing. That's a habit we've picked up from watching people like Joe Biden in action over the past several years. It's always worth reading the fine print.
These are the very same people, after all, who decided it was a good idea somehow to defund the police. They're the ones who forced the entire American population to take an experimental COVID vaccine, even when it became obvious that it didn't work. These are the people who sent crack pipes to crack addicts, the ones who think 16-year-olds should vote in presidential elections, the ones who screamed at you about how Ukraine's borders are sacrosanct, but yours are racist, etc., etc., etc.
These are people, in other words, with a long and public track record of very bad ideas, extraordinarily bad ideas, ideas so stupid you couldn't make them up. So, the question is, is this idea different? We want it to be, but unfortunately, it's not and here's how you know it's not. Colleges aren't refunding any of the loan money. You are. You are. "But wait," you say, "I didn't defraud anyone."
JOE BIDEN EXPECTED TO ANNOUNCE $10,000 STUDENT LOAN FORGIVENESS PROGRAM WEDNESDAY: REPORT
"I didn't claim that a degree in postcolonial liberation studies from Wesleyan would be worth anything. I didn't take 80 grand a year from middle class families order to turn their children into Xanax addicted robots with no job prospects." Well, no, you didn't do any of that, but you're paying reparations anyway. Wesleyan is not. Wesleyan is off the hook. They all are. They'll pay nothing for the scam they perpetrated, though they're a lot richer than you will ever be. No, you're paying. It's on you.
Does that seem fair? Well, no, it's not, but it's how Washington works. Politicians reward their donors first. They're first in line. Joe Biden knows this really may be demented, but he remembers that. Consider the 2005 bankruptcy law, which has gotten not enough attention. That's one of Joe Biden's few legislative achievements in his 36 years in the U.S. Senate. That law prevented borrowers from discharging, getting rid of, credit card debt and private student loans in bankruptcy.
All other kinds of debt could be discharged, but not credit card debt. Weird. Who benefited from that? Well, credit card companies. Where were they based? Delaware and those companies also happened to be Joe Biden's biggest donors. So, they wanted his support on this bankruptcy bill, which would prevent people from getting out from under the debt they incurred at their exorbitant rates on their credit cards.
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So, to get a support, the bank, MBNA bought Joe Biden's home for several times its actual value. MBNA also hired Joe Biden's ne'er-do-well son, Hunter, speaking of crack addicts, and paid Hunter Biden more than 100 grand a year as a consultant from 2001 to 2005. How corrupt is that? Well, unimaginably corrupt, un-American, shocking, but that's what happened and of a lot of Americans suffered as a result. That legislation hurt people.
In the subsequent decades, student loan debt tripled. Americans' average credit card debt went up by thousands of dollars, but Joe Biden didn't care because the point of the bill was not to help Americans. The point of the bill was to reward his biggest donors and it did. Is that what we're seeing here? Well, let's see, where is Joe Biden's core base of support as of August 2022? Well, no group in America supports Joe Biden more fervently still than college administrators, one of the fastest growing job categories in this country. How's that for depressing? There are hundreds of thousands of college administrators in the United States and most of them have master's degrees.
As you can see from this chart, that group overwhelmingly donates to the Democratic Party. People employed in the education industry (And that's what it is. It's an industry) gave nearly $300 million to Democrats in 2020. They gave $30 million to Republicans. Talk about lopsided. So, these administrators are the very beneficiaries of the single greatest scam currently underway in the United States. We send tax dollars to colleges who don't need them in the form of government backed loans, but instead of lowering tuition for you, they hike tuition every year at a rate far faster than the rising inflation. Then they use those profits to hire more useless, unhappy anti-American administrators, all while failing to give your kids even a basic education in anything that's worth something and then, because all of that isn't insulting and destructive enough, the government rewards them and exempts these very places from paying taxes.
In our tax code, universities are treated like charities, though they are very much not charities at all and if you pay the bill you know, but they don't pay taxes and that's why their endowments are bigger than the GDP of some countries. Harvard's endowment is over $41 billion. Yale's over 30. Stanford and Princeton over 25. The University of Texas, bigger than them all. So, it doesn't matter what they call themselves. These places are not colleges or universities. They are hedge funds with classrooms attached and if there's anyone in the United States who doesn't need more government money, it's the higher education lobby, but today, Joe Biden threw them more. He said, to give these colleges, these hedge funds, more of your money and you shouldn't be surprised because he just rewarded his private equity donors, and there are many of those, by preserving the carried interest loophole. That just happened earlier this month.
Your taxes are going up. They're paying half the rate that you are. So today, Biden announced he's going to force taxpayers to cover $300 billion worth of student loans. Now, you may remember that the Inflation Reduction Act was supposed to reduce the deficit by 100 billion. Oops. Sorry, there goes that three x. Biden also announced that his voters don't have to repay their loans anytime soon. Certainly not before the midterms.
PRESIDENT BIDEN: Student loan payment pause is going to end. It's going to end December 30. I'm extending to December 31, 2022, and it's going to end. We will forgive $10,000 in outstanding federal student loans. In addition, students who come from low-income families, which allow them to qualify to receive a Pell Grant, will have their debt reduced $20,000. Both of these targeted actions are for families who need it the most, working and middle-class people hit especially hard during the pandemic, making under $125,000 a year. You make more than that, you don't qualify.
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You can kind of see the appeal of Joe Biden in this. So, you must remember Joe Biden. He's been around since the beginning of time, and he was this kind of cheerful working-class guy. "Oh, I'm from Scranton" Now he's just a husk. He has no idea what he's saying, but the image of Joe Biden still resonates in your head. He's for the middle class. Of course, it's the opposite of that. If you wanted to help the middle class, you would send $10,000 to every family with a head of household who lays concrete or every truck driver in the country, but that's not what he's doing. If he wanted to do that, he would force colleges with $30 billion endowments to cover this loan forgiveness. He would also talk about mortgage loans and credit card debt, which are much bigger problems for most people. Car debt.
Instead, Joe Biden is talking about what his supporters, the NPR community cares about, and that's student debt, and he's making you pay for it. According to the Wall Street Journal, more than 70% of the loans that Joe Biden just canceled you're going to be now responsible for are held by borrowers in the top 60% of income distribution. Oh, and that makes sense because only about 38% of all Americans have a college degree. Maybe everyone in your neighborhood, but only 38% of the country and only 13% have graduate degrees.
And guess how much student loan debt is held by people with graduate degrees? Can you guess? About 56%. Oh, so it's nonprofit administrators who are benefiting from this. Certainly college administrators are benefiting. We just told you that, but there will be other beneficiaries, all of whom reliably support the Democratic Party. That would include Harvard law graduates and that's why professional buffoon and former Harvard law professor Larry Tribe is celebrating today's announcement.
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He wrote on Twitter his métier, "Good news for thousands of my former students. I'm grateful on their behalf, Mr. President." Oh, you slobbering suck up. Shut up, Larry Tribe, but imagine bragging that Harvard Law students are out from under the crushing debt. How out of it do you have to be to send something like that? So, it's a good day for Harvard Law grads. They're in trouble. They need your help. Thanks to Joe Biden, many of them now get to take at least ten grand off their outstanding student loan bill and you're paying the difference.
What's weird, what's missing from Larry Tribe's analysis, is whether the president can actually do that legally. Like, who cares, I guess now, but if you're a law professor, you should probably care. It wasn't long ago that Nancy Pelosi, you have probably seen this clip, we've been running all day, but we're going to see it again. Nancy Pelosi pointed out that actually the president can't do this. Only Congress can do this. Here's Nancy Pelosi.
NANCY PELOSI: People think that the president of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay, but he does not have that power. That has to be an act of Congress.
It would have to be an act of Congress. Well, that was last year, but we've repainted the slogans on the side of the barn, and it turns out Joe Biden can do whatever the hell he wants because Susan Rice works for him. Get out of her way. Just as with the eviction moratorium, the Biden administration said we're just to ignore the law. Donors are too important. All of this is totally backward, legal or not. If you actually wanted to improve the United States of America, you would think deeply about how to help people who never went to college in the first place, and then, moving down the hierarchy, you would reward the people who worked hard to pay for college themselves.
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They deserve something. They followed the rules. You can ignore them and once you've made them whole, you would think about helping the millions of people who scrimped, sometimes with low paying jobs, to pay off their college loans. Again, who did it the right way. There's got to be a reward for them. What's the incentive to do the right thing if there isn't? Well, Biden was asked about that today. He ran away. Watch.
REPORTER: Mr. President, is it unfair to people who paid their student loans or chose not to take out loans?
BIDEN: Is it fair to people who in fact do not own multi-billion dollar businesses to see one of these guys getting all of the tax credits? Is that fair? What do you think?
Huh? We're trying hard. Maybe we're too literal here. What does that mean? We have no idea. He had no idea. So, they haven't answered the question. How does it make any sense to punish the people who did the right thing, who paid their loans off? And there are a lot of those because Americans are law abiding people. They want to do the right thing. It's the law. They don't need 87,000 new armed IRS agents to do the right thing. They're Americans. They want to do the right thing. That's the overwhelming majority of the country. So, what about them? What do they get in exchange for doing the right thing voluntarily? Well, Elizabeth Warren was actually asked this maybe two years ago. Here's her response. I don't care.
AUDIENCE MEMBER: I want to ask you one question. My daughter is getting out of school. I've saved all my money, she doesn't have any students loans, but am I going to get my money back?
WARREN: Of course not.
AUDIENCE MEMBER: So, you're going to pay for people who didn't save any money so that those of us who did the right thing get screwed.
WARREN: No, it's not that anybody got screwed.
AUDIENCE MEMBER: Of course, we did. My buddy had fun, bought a car, went on vacations. I saved my money. He made more than I did, but I worked a double shift, worked extra. My daughter worked since she was ten, so you're laughing at me.
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Oh, so there's one guy in America who still cares about fairness. Remember fairness. If you want a functioning society, things have to be fair. If people believe things are fair, they will voluntarily comply with the rules, but the second they realize things are stacked against them or inherently unfair, the people in charge don't care about fairness, they will do all they can to shirk their responsibilities and to ignore the rules.
That's why no one in Greece pays taxes because they think the system is rigged. Presidents should not accelerate that degradation of public spirit. Again, if you wanted to improve the country by disbursing billions of tax dollars, you would help people like the guy you just saw who worked hard to pay his debts and then if you really wanted to go forward with debt forgiveness, then you could make an argument for that, who you award it to?
Well, you would award to people who might conceivably improve the country you live in. Who would that be? Well, let's see. Dental and veterinary students, structural engineering majors, people who did something useful in college, but you would never in a million years even consider giving a tax subsidy to lawyers or gender studies majors or diversity administrators. Why? Because you don't want more of those people. We have way too many of them already. And then you would never send money to anyone who supported BLM riots or anyone who claimed on Twitter that America is a systemically racist country.
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Why would you send them money? Why would you send the fruits of America to people who hate America? What is that? It's suicidal. No sane person would do that. So, what you're watching, as always, is class warfare. They reward the top and the bottom, people who don't need it and people weren't trying, and then they crush the struggling middle, the law-abiding, the people who want to do the right thing, who have collective spirit. They hurt those people.
Why would you forgive the college debt of someone who spent six years majoring in oppression studies at Long Beach State? You would only do that if you're engaging in the ugliest kind of partisan politics. Reward my voters. It's the question of paying people to watch Joy Reid. It's like subsidizing an NPR pledge drive. The message? They do not care about you at all, and they're no longer pretending.
