No One Asked Me But… (March 8, 2023)

By DR. LARRY MOSES

No one asked me but… The President has decreed that student debt up to $20,000 is to be canceled. Forgiving this debt will cost the American citizens anywhere from $450 billion to one trillion dollars. Later this year, the Supreme Court will decide if that is even a Constitutional power of the President.

Let’s see if I understand the issue. A student who could have gone to a State College or University for half of what it cost to go to a more prestigious college or university borrows thousands of dollars to pay for the more expensive education. Is this not the same as the person who could have bought a Ford deciding to increase their debt for Rolls Royce and now wants you and me to pay for the difference?

There is little doubt that when one leaves Harvard for an entry level job, they have an advantage over the UNLV graduate. However, five years’ work experience will trump the college diploma.

While I don’t believe college is the answer for all people, it definitely was for me. As my major professor explained to me, “Larry, a really smart person does not need a college degree. In your case, get as many diplomas as you can and display them behind your desk.”

Maybe I don’t have a valid complaint. How did I pay for my education? My father was killed in action in Beho, Belgium during World War II and I qualified for the War Orphan’s G.I. Bill. I also qualified for the G.I. Bill by serving in the United States Marine Corps. My wife worked as a registered nurse to help support us while I went to school.

I have three sons who graduated from various universities. My oldest son is a graduate of UNLV and his education was paid for by his working and the family subsidizing his education. My youngest son graduated from UNR; again by working and the family subsidizing his education. My middle son joined the United States Marine Corps and qualified for the G.I. Bill. He used his G.I. benefits and did take out a loan, that was about the average loan of a college student, that he paid off after leaving college. Interestingly enough, the college G.I. bill required a voluntary deduction from his pay to be credited toward a fund to draw on when he entered college.

All that being said, one must wonder about the fairness of college debt forgiveness. Who will pay for those loans? The answer is the American taxpayer. Those who may have wanted to go to college but did not qualify for the loans will pay. Those who did not care to go to college because the occupation they chose did not require a college education will pay. Those who went to college and paid their way will pay. Those who went to college on borrowed money and paid their debt, will pay.

Does this seem fair? It is estimated that the average tax payer will be on the hook for about $2,500 if the figure for the total loan forgiveness is a mere $450 billion.

Even more ludicrous is the fact that the debt forgiveness is for a single individual making up to $125,000 a year. If a couple applies for debt forgiveness, the total is extended to $250,000 a year.

The average college debt is $28,000. This is less than a car payment. If a person making $125,000 and couple making $250,000 a year cannot figure out how to make the payments on a $28,000 loan, they should have paid more attention to their math classes in college.

No one asked me but… Another financial issue with the Biden administration is their attack against Social Security. Let me explain that Social Security is of very little interest to me because I don’t collect enough Social Security to buy a Big Mac.

This is only fair because I paid very little into the government’s Ponzi scheme. Early in my working days, I filled low paying jobs that required a small Social Security deduction. When I started teaching school, another low paying job, I paid into PERS and Social Security was not required.

I find it interesting that most American workers are paying into Social Security but the account is running dry. Where has the money gone? Has the government been using Social Security as a private piggy bank? This appear to be the case. This is an effort that would make Bernie Madoff proud.

One solution to the problem of a shortfall being offered by the Biden administration is to raise the age to collect Social Security to 70 years. How about applying the $450 billion the administration plans to use to forgiving student loan to returning the money misappropriated from the Social Security fund?

No one asked me but… I cannot conceive of what 31 trillion of anything is… let alone dollars. It made me go on a search for who the American government owes $31 trillion dollars to.

I found a myriad of creditors including foreign governments, banks, private investors, state and local governments, and the Federal Reserve own most of this debt. It takes the form of Treasury securities, bills, and bonds.

About a third of the debt held by the public is held by foreign countries. Japan is the largest creditor. The next four largest creditors are China, the U.K., Luxembourg, and the Cayman Islands.

Roughly 30% of the national debt is owned by the U.S. government itself. The U.S. government borrows from departments of the government, such as Social Security, that takes in more money than it uses on a daily basis. This money hypothetically has to be paid back to those agencies but that never seems to happen.

I had an interesting thought. Since most of the nations that we owe money to actually owe us money in return, why don’t we just trade debt. If we still owe more, we pay only the difference.
If they are still in debt to us and can’t afford to pay the difference, we will continue to carry the balance. Not being an economist, I thought this was a good idea.

However, after reading further, those wiser than I said that this would ruin the world economy. I can only take their word for it.

Thought of the week… We don-t have a trillion-dollar debt because we haven’t taxed enough; we have a trillion-dollar debt because we spend too much.
—  Ronald Reagan