They fundamentally do not understand how money and debt work in reality. They basically think of it like digging dirt out of a hole:
A loan is digging a hole, and you put the dirt (money) somewhere else. Paying back the loan is putting dirt back in the hole. So to cancel the debt and get rid of the hole, the dirt has to come from somewhere! Is it going to come from my dirt pile???
But obviously that’s not remotely how it works because unlike dirt, money can be infinitely created or destroyed at will by the government. So they can just snap their fingers and fill the hole without changing any of the piles.
Debt cancellation often involves the government paying the creditors to cancel the loans. In the case of government loans, they are the creditor and creditors are allowed to cancel debts at will without the exchange of money. But then it’s often a tax write off, which I assume a government agency can’t do XD
Yeah I know. Additionally a good chunk of the debt that is being forgiven would not have been paid in the first place, so it's not exactly changing much in that situation
What the fuck do they mean "pay for?" It's not some spending program, it's debt cancellation. How do they think this works?
They fundamentally do not understand how money and debt work in reality. They basically think of it like digging dirt out of a hole:
A loan is digging a hole, and you put the dirt (money) somewhere else. Paying back the loan is putting dirt back in the hole. So to cancel the debt and get rid of the hole, the dirt has to come from somewhere! Is it going to come from my dirt pile???
But obviously that’s not remotely how it works because unlike dirt, money can be infinitely created or destroyed at will by the government. So they can just snap their fingers and fill the hole without changing any of the piles.
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Debt cancellation often involves the government paying the creditors to cancel the loans. In the case of government loans, they are the creditor and creditors are allowed to cancel debts at will without the exchange of money. But then it’s often a tax write off, which I assume a government agency can’t do XD
They think that people owe debt to specific guys and the government is going to raise taxes to pay those guys on the students behalf.
It's reduces the revenue the govt is collecting in the future
Good thing our government prints its own money which is artificially inflated in value due to geopolitics and is not dependent on revenue
Yeah I know. Additionally a good chunk of the debt that is being forgiven would not have been paid in the first place, so it's not exactly changing much in that situation
Technically it partly removes a revenue stream, but that revenue stream has been gone since the beginning of covid anyway.