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Canceling Student Debt Would Send the Stock Market to the Moon

Dino

Russian Asset
All that money that students are paying now gets redirected to the stock market-Everyone's 401k goes parabolic, everybody is winner.
Or not...

However, Moody’s also found the economic impact would be relatively minimal, similar to a “tax-cut-like stimulus to economic activity” in the near-term. The report also found, among other impacts, the potential for:



  • Increased moral hazard: For example, future student borrowers could be incentivized to borrow more student loan debt knowing that their debt will be forgiven.
  • More student loan debt: Future student loan borrowers may borrow more student loan debt, but their student loan debt may not be forgiven, leaving them with potentially higher leverage.
  • Lost Revenue: Since about 90% of student loan debt is federal student loans, the federal government would lose about $85 billion, or 0.4% of GDP, in forfeited student loan principal, interest and fees.
  • Muted Impact Due To Borrower Base: The majority of beneficiaries of universal student loan cancellation are high income earners, which could limit the economic benefit.
https://www.forbes.com/sites/zackfriedman/2019/12/03/student-loans-debt-forgiven-impact/#5a2b728474e9
 
Or not...

However, Moody’s also found the economic impact would be relatively minimal, similar to a “tax-cut-like stimulus to economic activity” in the near-term. The report also found, among other impacts, the potential for:



  • Increased moral hazard: For example, future student borrowers could be incentivized to borrow more student loan debt knowing that their debt will be forgiven.
  • More student loan debt: Future student loan borrowers may borrow more student loan debt, but their student loan debt may not be forgiven, leaving them with potentially higher leverage.
  • Lost Revenue: Since about 90% of student loan debt is federal student loans, the federal government would lose about $85 billion, or 0.4% of GDP, in forfeited student loan principal, interest and fees.
  • Muted Impact Due To Borrower Base: The majority of beneficiaries of universal student loan cancellation are high income earners, which could limit the economic benefit.
https://www.forbes.com/sites/zackfriedman/2019/12/03/student-loans-debt-forgiven-impact/#5a2b728474e9
The revenues will be made up in capital gains taxes as their the money gets re-invested into capital assets.
 

Winston

Do you feel lucky, Punk
All that money that students are paying now gets redirected to the stock market-Everyone's 401k goes parabolic, everybody is winner.
Debt can not be cancelled, as doing this only redirects who pays the debt and taxes rise and the stock market tanks.

Furthermore not all funds can be added to 401k plans, nor can all people afford to do this

Edited
 
Last edited by a moderator:
Debt can not be cancelled, as doing this only redirects who pays the debt and taxes rise and the stock market tanks.

Edited
Just put it on the nation's credit card- Just like the Trump tax cuts- Bam! It's the 10 trillion economic stimulus the stock market needs to keep rising.
 

Winston

Do you feel lucky, Punk
Just put it on the nation's credit card- Just like the Trump tax cuts- Bam! It's the 10 trillion economic stimulus the stock market needs to keep rising.
If they do cancel all student debt do I get refunds for the college bills I paid for my sons? Or are the only people who benefit the freeloaders who only know how to take loans? Also if they do this the freeloaders will all buy more stuff they can't afford anyway thus the debt just morphs a little bit, they will still be in the same hole like all the fools who took fannie mortgages.

Is your mortgage paid genius?

Try GOOG or AAPL instead of begging for a handout
 
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