Hi C.

Thanks for your comment!

I agree with you that the effect of forgiveness on aggregate economic activity is not the main concern when discussing forgiveness.

The reason I focus on that connection in this piece is that partial forgiveness has been proposed as part of the (fingers crossed) coming stimulus package. Biden has mentioned forgiving $ 10.000 for example. So my point is likewise: when discussing stimulus, student debt forgiveness is not desirable, since there are better ways to spur economic activity.

Now, there could be other arguments for forgiving student debt, but these have no place in the stimulus debate.

You mention something about the rising costs of education and the distributional effects of debt forgiveness.

I don't see how doing something that will distribute more wealth toward the top of the income scale would reverse any trend in wealth inequality (let's assume it exists, but it merits an entire discussion on its own).

It appears to me you may have some wrong perceptions about the incidence of student debt. You may find this piece useful in clearing it up:

https://medium.com/an-injustice/three-common-misconceptions-about-student-loan-forgiveness-81c1289082e

Regards!

Asger

I’m an economist doing policy design and analysis. I write about the economy, taxation, innovation and growth, policy design, and financial markets.

I’m an economist doing policy design and analysis. I write about the economy, taxation, innovation and growth, policy design, and financial markets.