Nixonian Politics and Student Debt Cancellations

 [[{“value”:”In the political economy chapter of our textbook, Modern Principles of Economics, Tyler and I discuss how voters appear especially responsive to economic conditions in the year of an election. Politicians who want to be reelected, therefore, are wise to do whatever they can to increase personal disposable income and reduce inflation in the year
The post Nixonian Politics and Student Debt Cancellations appeared first on Marginal REVOLUTION.”}]] 

In the political economy chapter of our textbook, Modern Principles of Economics, Tyler and I discuss how voters appear especially responsive to economic conditions in the year of an election. Politicians who want to be reelected, therefore, are wise to do whatever they can to increase personal disposable income and reduce inflation in the year of an election even if this means decreases in income and increases in inflation at other times.

One of the most brazen examples comes from President Richard Nixon. Just two weeks before the 1972 election, he sent a letter to more than 24 million recipients of Social Security benefits. President Nixon’s letter read:

Higher Social Security Payments

Your social security payment has been increased by 20 percent, starting with this month’s check, by a new statute enacted by Congress and signed into law by President Richard Nixon on July 1, 1972.

The President also signed into law a provision that will allow your social security benefits to increase automatically if the cost of living goes up. Automatic benefit increases will be added to your check in future years according to the conditions set out in the law.

In other news:

President Joe Biden on Wednesday will announce $1.2 billion of student debt relief for nearly 153,000 borrowers — and he’s sending emails to make sure they know whom to thank for it.

…“Congratulations—all or a portion of your federal student loans will be forgiven because you qualify for early loan forgiveness under my Administration’s SAVE Plan,” says the email message from Biden that the Education Department plans to send on Wednesday to the latest group of borrowers receiving loan forgiveness.

“I hope this relief gives you a little more breathing room,” Biden writes in the message.

Note also:

…The administration says that it has now approved loan discharges totaling nearly $138 billion for nearly 3.9 million borrowers through dozens of administrative actions since coming into office.

“Administrative actions,” in other words without Congress passing a law. You may recall that the Supreme Court ruled that the administration did not have the authority to cancel student debt under the HEROES Act (which it obviously didn’t). However:

Hours after the Court issued its decisions in Nebraska and Brown, the Biden Administration announced that it was beginning a regulatory process, called negotiated rulemaking, to consider providing loan cancellation under the HEA rather than the HEROES Act.

Addendum: Do also read my previous post where I noted “…the student loan program, as currently written, is looking to be one of the most costly, inefficient and unwise government programs of the 21st century.”

The post Nixonian Politics and Student Debt Cancellations appeared first on Marginal REVOLUTION.

 Economics, Education