Bernie: Let's bail out all the student-loan debtors -- including the upper class

A lame pander reeking of flop sweat. Warren beat him to the punch on this, remember, proposing in April that a small tax on mega-millionaires could pay off most of the student debt in this country. That was back when she was crawling along at around six percent in the polls and trailing Bernie by double digits. A splashy bailout for the young and young-ish was her way of trying to show Sanders’s progressive base that there are other choices on the primary menu this year. But even in lefty-pander mode, Warren’s plan placed limits on taxpayer largesse. Only the first $50,000 of debt for each debtor would be paid off under her plan. If you’re someone who racked up truly massive loans, as one aiming for a lucrative postgrad degree in law or medicine might, then you’d have to pick up some of your own tab. That was her concession to the poor optics of handing out cash to some of the best-paid members of America’s professional class. Can’t fight a class war in which the upper class benefits as much as, or even more than, the lower class, right?

Now here comes Bernie, two months later, nervously insisting that you can do that. Warren has roughly doubled her polling since April, mostly at Sanders’s expense; she’s already passed him in more than one national poll and stands poised to pass him in the RCP average soon if trends continue. The man needs a way to remind lefties that there’s only one true socialist in this race and all the rest, including Warren, will cuck out with half measures as president. So here it is: Student-loan forgiveness for everyone, full stop, without regard to their ability to pay. Doctors, lawyers, you name it — everyone’s off scot-free. (What I said about Warren’s plan in April is even truer here: Under this proposal, the less responsible you were in incurring debt you couldn’t afford and the less willing you’ve been to sacrifice in order to repay it, the more your government will reward you.) A class-war giveaway that doesn’t account for class feels absurd, but it makes sense as a primary pander. This is Bernie showing Democratic voters that no one but no one will be as bold in handing out free sh*t as he will.

Sanders is proposing to pay for the legislation with a new tax on financial transactions, including a 0.5 percent tax on stock transactions and a 0.1 percent tax on bonds. Such a levy would curb Wall Street speculation while reducing income inequality, according to a report by the Century Foundation, a left-leaning think tank, although conservatives warn it would stunt economic growth and investment…

“The cost will march toward $3 trillion and benefit a lot of wealthy families and future high-earners,” said Brian Riedl, an analyst at the Manhattan Institute, a libertarian-leaning think tank. “Of all problems requiring a $3 trillion federal expenditure, the college costs of middle- and upper-class college graduates seem lower-priority.”

A fierce debate has raged in left-leaning policy circles as well as over whether canceling student debt offers too much help to families with higher incomes. The top 40 percent of earners would receive about two-thirds of the benefits from Warren’s plan, according to Adam Looney, a former Treasury official under President Barack Obama who is now at the Brookings Institution, a center-left think tank.

That number is likely to be higher under Sanders’s plan, given that proposals by Warren and Castro do not call for wiping clean the debt of those earning over six figures.

He also wants to make all public universities and community colleges free, because why not? As for suckers like me who already paid off their debt or the many Americans who decided to pass on college for whatever reason — including, perhaps, because they didn’t want to take on debt — I don’t know what to tell you. There are no plans in Sanders’s or Warren’s proposals to compensate those who made the mistake of managing their financial obligations prudently, but Philip Klein is probably right that that’ll change soon. Now that Bernie’s offered to pick up the tab for everyone with current debt, the only move left to out-socialist him is to offer reparations to those who don’t have debt but might have if they’d handled things differently. Expect that plan from Beto or Buttigieg in a month or two.

There’s also the small matter of the middle and even lower class, most members of which didn’t go to college, having to fund this bailout with their tax dollars. Right, right, I know — Bernie says he’s going to fund it by taxing Wall Street. But every dollar extracted from Wall Street for a student-loan bailout is a dollar that can’t be applied to one of the many, many other expensive new entitlements which the left wants to introduce during a Sanders presidency. Remember, by one estimate this guy’s health-care plan will cost $32 trillion over 10 years. The tax he’s proposing on Wall Street to pay for this student-loan thing could have helped pay for that instead. You’ll have to pick up the slack for one program or another.

Ironically, although this plan is obviously aimed at winning back some progressive votes from Warren, I think it may end up helping her expand her appeal. Warren isn’t trying to win the nomination by consolidating progressives and counting on them to outvote the rest of the party. She’s pitching herself to the center too, insisting repeatedly that she’s a capitalist to contrast her relative moderation with Bernie’s socialism. It appears to be working, with some centrist groups beginning to see her as a potential compromise nominee between Bernie and the more centrist Biden. Having Sanders go nuts with student-loan relief makes Warren’s still-nutty-but-not-as-nutty capped handout of $50,000 per debtor seem prudent and “moderate” by comparison. It might even help her with some lefty voters who, while appreciating Sanders’s ambition, won’t easily digest the criticism that Bernie’s plan will primarily benefit postgrads with higher earning potential.

As fraught and alienating as it is, the case for racial reparations seems more straightforward to me than the case for bailing out a single generation of student-loan debtors en masse. I’d understand it more if the bailout targeted only the poorest students, or if it was limited to those who encountered a gruesome labor market in the first few years after the Great Recession, but there seems to be no logical limiting principle here and no explanation for why these debtors as opposed to debtors who are 10 years older should receive relief. It’s like a conservative caricature of a left-wing redistributionist program, lifting a pot of money from Wall Street and then looking for some pretext, without much rhyme or reason, to give it to someone else.