If a private individual forgave a debt, he might be seen as generous.
But when government starts telling borrowers they need not repay chunks of their debt, it is not an act of generosity but very nearly an act of theft — from taxpayers.
President Barack Obama is proposing that “public service” workers’ student debts be forgiven after 10 years of payments. While that would include some workers at worthwhile nonprofit organizations, in practice, it would amount to a get-out-of-debt-free card for lots of government workers. (Private-sector workers would get the same debt forgiveness, but only after 20 years, when the overwhelming majority would have paid off their loans anyway.)
The goals of the president’s proposal are unclear. Does he think the tens of millions of Americans in the private-sector jobs that keep our economy moving — and provide tax revenue that keeps government workers employed — are somehow less worthy? And is it the administration’s proper role to decide which jobs “serve the public” and which do not? Is a good computer technician or plumber less valuable to society than a bureaucrat at the Internal Revenue Service or the Department of Housing and Urban Development? Moreover, should we be creating incentives for more people to go into already-bloated government, rather than into the productive private sector?
But this debt-forgiveness plan would be wrong even if it were extended equally to all.
Who, after all, would get stuck with the tab for all those student loans that would not be repaid? The taxpayers, of course! We will all pay for the loans in the form of higher national debt and higher taxes.
What the president proposes is not to eliminate student debt but merely to shift who has to pay it — from the individuals who freely promised to repay their loans to taxpayers who made no such promise.
That is an idea worth dropping.