[2/21/18] Report Says If US Government Cancelled All Student Loans The US Would See $2.5 Trillion Benefit
A new report projects that if the U.S. government were to cancel all student loan debt it now holds the US economy would see a $2.5 trillion over 10 years.
Student loan debt in the U-S has reached $1.4 trillion dollars. That’s greater than all credit card debt and also eclipses all motor-vehicle loans. Researchers at the Levy [lee-vee] Economics Institute say canceling that debt would be a major boost to the economy.
Stephanie Kelton, the report’s lead author, said 44 million Americans have outstanding loans, and many struggle to make payments or are in default. She says canceling the debt would stimulate the economy because 44 million people would have an extra 300 to 1,000 dollars in their pockets every month…
022018 Student Loan Debt 1 :14 “…can now go out and do.”
Kelton’s team used two macroeconomic models, the Fair model and Moody’s model, to forecast the effects of debt cancellation over ten years. They found that clearing one-point-four trillion dollars of debt could add as much as two-point-five trillion dollars to the economy. Skeptics point out the move would add to the federal deficit because the government, in addition to releasing 90 percent of the debt it owns outright, also would have to service debt held by private lenders.
Kelton argues that the government doesn’t actually need the dollars represented by student loans on its balance sheet, because it holds the monopoly on currency and can add more dollars whenever it wants. She says taking on debt held by private banks would be a lot cheaper than the one-point-five trillion dollar tax overhaul recently passed by Republicans in Congress.
022018 Student Loan Debt 2 :10 “…at about half the price tag.”
The group’s projections showed that in addition to increasing national G-D-P, the move would also create more than 1.5 million new jobs annually, which would be more than half of all the jobs created after the Great Recession between 2010 and 2015.