The Unconstitutionality and Irresponsibility of Biden's So-Called "Cancellation" of Student Loan Debt

September 24, 2022 4:19pm

There are two indisputable facts about college loans: 1) the easy availability of taxpayer subsidized money for college is THE reason the costs of tuition, room, and board have FAR outpaced inflation, and 2) Joe Biden's so-called "cancellation" of student loan debt was nothing but an unconstitutional taxpayer funded vote-buying scheme.

College is outrageously expensive because the government makes it too easy to get money for college, and the Democrats - as they always do - have bought votes from lazy and irresponsible people by writing off up to $20,000 in student loan debt: $10,000 for borrowers who did not receive Pell Grants and $20,000 for borrowers who did receive Pell Grants. Pell Grant recipients have already received free money from the taxpayers. Why should they get twice as much now as those who didn't?

According to the Department of Education, the typical four year student with loans now graduates with nearly $25,000 in debt. Is that a lot? Yes, it is. But it's $15,300 less than the average new car loan and $3500 less than the average used car loan. And the average car loan - new or used - gets paid off in 68 months. That's a little over 5 1/2 years. But how long does it take to pay off the typical student loan? Most student loan contracts are structured to be paid off in ten years. But the average borrower actually takes 21 years to pay it off! Why? Because people make the minimum payments, and the government keeps allowing payments to be suspended for a whole host of reasons - all while interest is accruing, of course. And those numbers are for a person with a four year degree. People who took out loans for graduate schools can take 45 years to pay 'em off! That's crazy. And it makes no economic sense for most people.

If a doctor borrowed $250,000 to get his medical degree in a field that's in demand, that might make sense. But if some idiot 2.0 GPA Leftist borrowed $250,000 to get a degree in gender discrimination and white patriarchal oppressionology with a minor in philosophy from some private Ivy League university, that fool will NEVER earn enough to pay off the loan. But the government will equally loan out the annual maximum to both. And the government will set up the repayment schedule based on the person's post-graduation income. So the doctor making a $300,000/year will get out of debt a lot faster than the person with the useless degree in Destructive Activism studies. Unless, of course, the Democrats cancel some of those student loans in exchange for votes.

And that is exactly what Biden has done. Well, no it isn't. That's what the Democrats and their allies in the fake news said Biden did. But Biden didn't cancel ANY college debt. All he did was transfer the debt from the students who incurred it to the taxpayers who did not. And it wasn't about "paying for college." It was about "paying for votes."

It is horrible policy. But is Uncle Joe's act of forgiving student debt like he did even legal? Can he constitutionally do it? No, he can't. "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."

Are those my words? No. Those are the words of Democrat Speaker of the House Nancy Pelosi. It was one of the rare times when Nancy Pelosi actually spoke the truth about the constitution's separation of powers and the limits on what the Executive Branch can do. She said those words in response to a question by a reporter at one of her weekly press conferences. You can see her say it at the 14:30 point of the video at https://www.c-span.org/video/?513769-1/house-speaker-pelosi-holds-news-conference.

But Speaker Pelosi said that BEFORE Biden transferred somewhere between a quarter trillion dollars and a half trillion dollars of student loan debt from the people who borrowed it to the taxpayers who did not. But what did Pelosi say AFTER Biden's illegal transfer of student loan debt? She said she supported his actions. How’s that for respecting our constitution, huh?

Those actions mean the taxpayers will be on the hook for that "canceled" student loan debt for generations to come. And that's on a macro scale. What it means on a micro scale is that a plumber who did an apprenticeship instead of college is paying for someone else's college education. It means the guy who enlisted in the military so he could get GI Bill funding for college is now paying for the college education of that lazy pacifist who didn't. It means the student who worked while attending college is paying for the tuition of the frat boy who got a degree in drinking and partying. It means the parents who sacrificed and saved for eighteen years to pay for their kids to go to college are now paying for the education of kids whose parents drove the newest cars and went on fancy vacations instead of saving for their kids' educations. But that is typical of every Democrat program, isn't it? What? You were responsible and took care of yourself and your family? Suckers!

While the so-called "cancellation" of student loan debt dominated the headlines, another part of Biden's action reduced the monthly loan payments that borrowers have to pay on their remaining balances. But like most Democrat programs, they sound good to the dumb masses (read those two words together quickly) who are uninformed ignoranuses (spelling intended) who don't have the intellectual capacity to think beyond the talking points they've been spoon fed. The reality is that by reducing the monthly payment people have to make, the length of the loan is extended, and the interest costs will be substantially higher.

A thirty year mortgage on a house has lower monthly payments than a 15 year mortgage. But the time it takes to pay it off is double and the amount of interest paid over the life of the loan is 40% - 60% more depending on the interest rate. So the ball and chain of debt weighs down on the borrower for twice the time and costs around 50% more over the life of the loan. And that usually means people end up delaying the start of saving and investing for their futures, which just keeps them indebted to the lender longer. And since student loans are almost entirely funded by the U.S. government these days, that keeps voters indebted to the Democrats longer. And that's exactly what the Democrats want; for the largest possible number of people to be dependent on government programs for as long as possible.

Government dependency breeds more than just lazy parasites. It breeds voters who will vote for more and more subsidies and handouts from the nanny state. It causes people who have biologically reached adulthood to intellectually and financially remain diaper-clad infants who can't take care of themselves and depending upon - and voting for - Democrats to keep spoon-feeding them. It is a disgusting and very deliberate dumbing down of America. It is an intentional breeding of as large of a parasitic class as possible. Because parasites vote for Democrats. That explains the entirety of the Democrats' love of welfare handouts to as many people as possible. Democrats don’t want us to be free and independent because if we can take care of ourselves and don't need the government to care for our every need, then we wouldn't vote for Democrats.

Government handouts are the closest thing we have to a perpetual motion machine. Because dependency breeds more dependency, and dependents vote for Democrats who promise more and more free stuff, the Democrats breed and import as many infantile parasites as possible - all under the guise of "helping" them of course. But it doesn't help them. It hurts them. And it will destroy our country.

In the words attributed to Alexander Tytler (even though there's no evidence he ever actually said them), a society goes through eight stages:

“From bondage to spiritual faith;

From spiritual faith to great courage;

From courage to liberty;

From liberty to abundance;

From abundance to complacency;

From complacency to apathy;

From apathy to dependence;

From dependence back into bondage.”

We are now very late in that cycle. And we're running out of time to change it, especially at the rapid pace the Democrats are imposing it upon us.

The demise of our Republic is best described in words attributed to Alexis de Tocqueville even though there's no evidence he ever said it either. That quote is "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."

And that has been the Democrat plan since the 1930s. But it accelerated in the 1960s with the Cloward-Piven Strategy, got put into overdrive under Barack Obama, and is now in hyperdrive under Joe Biden. There is no limit to how much money most Democrats are willing to spend to destroy this country's capitalist economy, so they can rebuild it as a socialist utopia - with them in charge, of course. Now, that doesn't absolve Republicans of their complicity in a lot of that runaway government spending. During the overhyped COVID pandemic, Republicans were just as eager to spend money like drunken sailors with fiat money as the Democrats were.

The day Barack Obama was sworn-in to office, January 20, 2009, the national debt was $11.1 trillion. It was $19.8 trillion when Trump was inaugurated, meaning it increased 78.3% during Obama's eight years. Pre-COVID under Trump, it increased another $3.4 trillion to $23.2 trillion. But the wasteful bi-partisan so-called "COVID Relief Spending" added another $2.9 trillion under Trump. And then the Democrats promptly added another $1.9 trillion in more unnecessary COVID relief spending in March 2021. Add to that the regular annual budget deficits and the other wasteful vote-buying spending bills the Democrats have passed over the past 20 months they've been in total control of Congress and the White House, and the national debt is now $30.9 trillion.

Since the day Barack Obama was inaugurated, the national debt has almost tripled from $11.1 trillion to $30.9 trillion. It's gone up 178%! And with Biden's student loan vote-buying scheme, the Democrats have just added to our national debt another half trillion dollars to trillion dollars, depending on whose analysis we believe.

But let's look at the danger of just the raw total of the known, already-incurred national debt of $30.9 trillion. Do you have any idea what a massive sum of money that is? And where is that money coming from? It's mostly been fiat money created out of thin air by the printing presses.

Pre-COVID, in February 2020, the M1 money supply was $4.002 trillion. Just three months later, in May 2020, the M1 money supply was $16.232 trillion. That was an increase of 305%! In three months!

And the M1 money supply in July 2022 was $20.514 trillion. So in 30 months, the M1 money supply has gone up 413%. How can we NOT have massive inflation following a quintupling of the money supply in 2 1/2 years???

The M2 money supply is broader than the M1, so many consider it to be a more important metric. Well, in February 2020, the M2 money supply was $15.458 trillion. Just three months later, in May 2020, the M2 money supply was $17.835 trillion. That was an increase of 15.3%! And the M2 money supply in July 2022 was $21.709 trillion. So in 30 months, the M2 money supply has gone up 40.4%.

That's not as big as the increase in the M1, but it's still a massive increase. It's still irresponsible. And it's still very inflationary. That kind of fiat money lit the inflation fuse. The explosion was inevitable. The only question was exactly when inflation would explode and how bad that explosion would be. It is the reason high inflation is going to be with us for a while, regardless of which party governs this nation over the next four years.

That high inflation will have a terrible effect on our debt. The 10 Year U.S. Treasury Rate is about 3.4% right now. The 20 year Treasury is about 3.8%, and the 30 year is around 3.5%. Those rates are all at least 70% higher than what they were at the end of last year. The exact rate increase are 126% higher for the 10 year, 81% higher for the 20 year, and 70% higher for the 30 year. And this quarter, the Series I Savings Bond is paying a whopping 9.62%!

The effect those interest rates will have on our national budget is huge. The national government's current debt is $30.9 trillion. That means every 1% we pay in interest costs $309 billion. If we pay 3% interest on that debt, that's $927 billion dollars - almost a trillion dollars in debt service alone. That doesn't include any principle reduction. That's just the interest. And 9.62% interest on $30.9 trillion would be $2.97 trillion.

THREE TRILLION DOLLARS IN INTEREST ALONE??? The current federal budget, which is the budget for fiscal year 2022 which ends in two weeks totals $5.8 trillion. So $3 trillion dollars would constitute 51.7% of the entire federal budget this year.

2022 spending on Medicare, Medicaid, the Children’s Health Insurance Program, and the Affordable Care Act totals $1.4 trillion. We'll spend $1.2 trillion on Social Security. That's $2.6 trillion between those two programs - $400 billion dollars LESS than what a $3 trillion interest on our debt would be. In case you're wondering, the Defense Department will get $768 billion.

To be clear, that national debt is financed with both short term and long term bonds. So even if interest rates skyrocket from here, much of our debt will still be financed with lower rate instruments. But the problem remains that as interest rates go up, the cost of servicing our debt goes up. And as the cost of servicing our debt goes up, the percentage of our budget needed to pay the interest will go up. And that will require even more borrowing. The government will borrow from its Visa card to pay its MasterCard. Or it will require massive tax increases which will put tremendous downward pressure on our economy and cause even more economic harm than we're experiencing now.

Or we could just reduce federal spending. But that won't ever happen. We're caught in a vicious cycle of economic calamity. And we're not getting out of it anytime soon no matter who's in control of the government.

But divided government, with Republicans controlling the House and Senate in 2023 and 2024 would be somewhat beneficial. And it would be far superior to the Democrats controlling everything for the next 2 1/2 years. That's not partisanship. That's objective observation. I hate both parties. But I hate the Democrats more. Both parties suck. On a scale of zero to 10, Democrats are a 1, and Republicans are a 4. Both are failing grades.

But the reason I just went through those numbers is because the cost of Biden's college loan vote-buying scheme will make our national deficits and national debt much worse. It's unsustainable. And everyone knows it's unsustainable. But it will buy votes for Democrats in November. And that's the only goal of Democrats - political power. They don't give a damn about our nation, our finances, our Constitution, or our future. As long as the DemonRats are in power, they're perfectly OK with sending the country to hell in a hand basket.

Democrats are trying to justify Biden's so-called "cancellation" of student loan debt by saying the students didn't understand what they were getting themselves into when they took out the loans. Think about that. The stupidity of that argument is beyond comprehension. These very people who are saying that 18 year-olds are too immature to understand what a loan is are also telling us that an 8 year-old is mature enough to choose to change gender and undergo sex change procedures without the parents' consent. If you believe such Democrat lies, then you're an idiot.

And would someone please explain to me why somebody whose college education doesn't produce enough value for him to pay off his loans is of such importance to society that the taxpayers should be forced to pay it off??? Seriously. Why should the taxpayers be forced on the hook for the student loans of someone who borrowed a quarter million dollars to get a master's degree in gender studies, which qualifies them to contribute nothing of value to society? All that gender studies degree prepares someone to do is be a ne’er-do-well, malcontent, crybaby, Leftist, community activist whose mission is life is to destroy the United States as a free, constitutional republic and usher in a socialist utopia under one party rule - with that party being the Democrats, of course.

But even if someone got a degree in something useful like hard sciences or business, why should the taxpayers take over his student loan payments and get nothing in return, huh? Well, we know the answer to that question too. Society as a whole may not get anything in return, but the Democrat Party gets a lifetime of votes from the freeloader.

Many people rightfully acknowledge that the burden of student loan debt is a big problem. It is a big problem. But the Democrats' solution to the problem, as usual, will make the overall situation worse without really even being of much help to the people it is supposedly designed to benefit.

As we've discussed, the problem was created when the Democrats made borrowing money for college too easy with no consideration of whether or not the college degree being pursued would have any economic benefit to the borrower in terms of better jobs with higher pay. Instead, it was marketed as an "Everyone deserves an education" policy of goodness and equality for all.

But despite it being sold as making college more affordable, it actually made college LESS affordable. Not in the near term, of course. Everything is more affordable when it can be put on a credit card with no short-term discomfort. But when that easy money comes due - when it's time to pay off that credit card - or in this case easy money student loan, a lot of people realize they can't afford the payments. So they got hit with the double whammy of higher costs of a college education because school administrators knew they could raise prices and students could easily borrow enough money to pay those higher costs; and then they got hit with the second whammy of "Oh, hell, my worthless degree in America-hating propaganda isn't lucrative in the job market, but I'm saddled with this massive debt I incurred to get it." And then they cry to the cameras and to their elected officials who enabled their dependency in the first place to coddle them even more and enable them even further by saying it wasn't the student's fault they took out such massive debt and by promising that if the debtors would simply vote for more Democrats, the government would pay off their loans with taxpayer money. And, of course it worked! Because that's how Democrat vote-buying schemes always work.

Today, 45 million Americans owe $1.6 trillion in student loan debt. The average borrower owes $28,950, which means Biden will cut the average Pell Grant recipient's student loan debt by 69% and will cut the average non-Pell Grant recipient's student loan debt by 34%. That's a a very basic back-of the envelope calculation. I based the loan amount on the overall average. But the average Pell Grant recipient owes more than the average non-Pell Grant recipient; I just don't know the exact figures. I looked for that data, and couldn't find it broken down that way.

The Biden Administration estimates that the entire remaining student loan balance for roughly 20 million borrowers will be written off. That's a pretty good number of voters isn't it? "Hey, I just canceled the ENTIRE BALANCE of your loan, so remember who did that come election day!” But wait! There's more! Normally, when a debt is forgiven, the borrower has to add the forgiven amount to their income, so the IRS can tax 'em on it. But the Democrats' so-called "American Rescue Plan" specifically eliminated that for canceled student loan debt, meaning it will NOT be considered taxable income by the federal government.

And keep in mind that no borrowers with federally-held student loans have been required to make a single payment throughout the entirety of Biden's time in office. Not a penny. Not since March 2020. And Biden just extended that payment pause until after December 31st this year, so it will be AFTER the November midterm elections. And get this - people who've made payments during that time anyway are being encouraged to request that those payments be refunded. Do you know why? So it can be forgiven! So it can be picked up by the taxpayers! Seriously. I know that sounds like a joke, but I promise you it's not. People who have paid anything toward their student loan balances since March 13, 2020 have been encouraged by the Democrats to request refunds of those payments so the total amount they paid back (up to $10,000 or $20,000 depending on whether they got a Pell Grant or not) can be picked up by the taxpayers. How's THAT for a great vote-buying scheme, huh?

But if a plaintiff is able to establish judicial standing to sue, the courts will eventually reverse Biden's college loan cancellation scheme as the unconstitutional action that it is. And when that happens, the uneducated Democrats and their allies in the propaganda press will accuse the Republicans of being evil fascists who hate educated people. And just as what happened when the Supreme Court properly overturned the flawed Roe v. Wade decision, the Left will be outraged over losing something they were never legally entitled to in the first place. And that's why, as destructive as Democrats are, American academia and the American press are worse. Because if people were properly educated and informed, the Democrats would never be able to get away with the deliberate dishonesty they do.

A lot of Democrats and their allies in the propaganda press have said it is hypocritical for Republicans to oppose student loan forgiveness if they voted for the Paycheck Protection Plan (PPP) that Congress funded when the economy was shut down by COVID mandates. But it is intellectually dishonest to compare the two types of loan forgiveness because they have nothing in common. The student debt was voluntarily taken via contract that required repayment. And it was for the elective activity of seeking higher education. The PPP was written into law as a loan forgiveness giveaway program from the very beginning.

Further, the PPP wasn't really a loan program to business owners as Democrats and the Fake News have told us. It was funded as a form of unemployment compensation at a time when governments FORCED businesses to close. And since very few closed businesses can afford to pay people to NOT work, the government gave them the money to pay people to NOT work. If those employees were not paid with PPP money, in most cases they would have been paid via unemployment compensation anyway. And either way, it would have come out of the government coffers.

So to say that Biden's illegal executive action to write off people's student loans and put $10,000 or $20,000 of their loan balances onto the backs of the taxpayers has anything in common with the legislated PPP loan forgiveness is grossly dishonest. Which means it is typical propaganda of the DemonRats. And they'd never get away with such dishonesty if we had an objective press in this country. But we don't have an objective press. What we have in this country is an activist press that will flat out lie to you either by commission or omission in support of the DemonRats' destructive agenda. It's disgraceful. And dangerous.