Debt for Votes: The Bankruptcy of Biden's Promises

Student loans and government “forgiveness” has been a hot topic among progressives since the Occupy Wall Street movement began. The movement consisted of educated but underemployed urban progressives upset with the obvious corporatist corruption that ensued after the Great Recession. The central theme was that Wall Street operated a series of blatantly corrupt and risky financial schemes that tanked the economy, but the instrumental and systemically important Wall Street players were bailed out at taxpayer expense (i.e., socialism for the rich). The Occupy Wall Street protesters sought to verbally oppose the Wall Street bailouts, while also expressing their support for a taxpayer bailout of the then-$1 trillion in outstanding student loans.

The concept of student loan forgiveness touches on the basic principle of fundamental fairness. Graduating high schoolers and professionals seeking associate, bachelor, graduate, or doctoral degrees are often sold degrees on the basis that the degree will provide them with an abundance of opportunity. Unfortunately, those opportunities are often exaggerated. According to recent reports, more than half of recent four-year college graduates are underemployed.

Worse, after a decade, nearly half of the recent four-year college graduates “still don’t hold a job that requires a four-year degree.” Separate research indicates that just over 54 percent of independent undergraduate students accepted federal student loans. When looking at these large discrepancies, one would expect the solution to be an evaluation around whether a degree is required to perform certain occupations.

Unfortunately, many of today’s most critical issues involve short-term solutions to potentially catastrophic long-term issues. These short-term solutions typically revolve around creating new government programs or throwing additional taxpayer funds at existing programs. Besides being short-sighted, these solutions are immoral.

First, as I have previously written, there is no way to forgive or cancel outstanding student loan debt. Instead, the debt burden would instead be placed on all taxpayers, many of whom neither accepted this debt nor agreed that forgiveness is a politically astute policy.

Second, writing off student loan debt at the taxpayers’ expense allows universities to continue inflating costs without providing sufficient guarantees that quality employment with a requisite wage will be available. Third, loan forgiveness continues to perpetuate the myth that “one’s best shot—perhaps only shot—at achieving success in life is to have a college degree.” These criticisms of student loan forgiveness, however true they are, ignore the political justifications for pursuing such a policy.

Student loan forgiveness, as a policy, is supported by a majority of young voters. Younger voters, an integral part of the Biden 2020 election coalition, were not fond of Joe Biden’s 2020 primary campaign, but the voting bloc swung decisively in Biden’s favor in opposition to then-President Trump. Today, younger voters view Biden as insufficiently progressive. No doubt the polling has triggered alarm bells within the Democrat Party power structure.

As such, President Biden has tried to unilaterally implement student loan forgiveness plans due to congressional opposition. On June 30, 2023, the Supreme Court struck down Biden’s first plan by a 6–3 majority vote in Biden v. Nebraska. Recently, Biden bypassed Congress and implemented new “fixed” programs, which he touted in his 2024 State of the Union speech. In late February 2024, Biden had the audacity to boast about his administration ignoring the Supreme Court ruling. He said, “And the Supreme Court blocked it. They blocked it. But that did not stop me. I announced we were going to pursue alternative paths for student debt relief for as many borrowers as possible.” Despite the shamelessness of these actions, Biden can promote himself as a champion of student loan forgiveness to voters.

The Biden administration, however, is fully aware that its student loan forgiveness programs will not withstand legal scrutiny by any objective measure. Presidents have often tried to bypass Congress with executive orders as performative measures to demonstrate that they are doing something. At Newsweek, John Yoo and Robert Delahunty write of the Biden administration’s initial student loans programs:

The Biden Administration’s student loan forgiveness program was a political ploy. Knowing from earlier judicial reversals that the program was illegal, Biden announced it in August 2022 to sway younger voters in the November 2022 midterm elections. But Biden also calculated that when the Court overturned his program, he could turn the debtors against the Court, and blame “conservative Justices” for their hardship.

That gambit may or may not work. Biden’s “loan forgiveness” was always a sham, characteristic of an administration steeped in contempt for law.

The Biden administration’s actions on student loan forgiveness have been deeply corrupt for all of the reasons noted. However, it is important to emphasize that student loan forgiveness is a vote-buying scheme. As stated earlier, Democrats rely on young voter turnaround as part of their winning coalition. Unsurprisingly, Senate Minority Leader Mitch McConnell has called out the Biden administration: “Not only has the Supreme Court ruled President Biden’s student loan socialism unconstitutional—the scheme is also profoundly bad policy.”

Though Republicans are eager to pile on the Biden administration for its illegal young voter vote-buying scheme, this example is merely symptomatic of a broader crisis of conscience. Politicians across the political spectrum have been corrupted to believe that most societal ills can be solved through taxpayer funds. As we continue to approach the 2024 general election, it is very likely that both the Democrat and Republican presidential nominees will promote policies designed to throw taxpayer funds at issues. As Benjamin Franklin said, “When the people find that they can vote themselves money, that will herald the end of the republic.”

This article originally appeared on Mises Institute