This galaxy take on student loans tries to convince us that loan forgiveness is “not actually costing anyone any money.” It received a disturbing amount of likes and shares, which means it’s being taken seriously, so here’s the breakdown.
▪️It begins by giving a hypothetical scenario where the lender is charging a 365% interest rate, which is well into loan shark territory. In this scenario, yes the lender could still profit despite forgiving some of the interest accrued, but student loans avg around 7% interest, entirely different.
▪️All money for Federal student loans originates from the US Treasury, which is then sent to the Dept of Education and then to students. Congress appropriates this money each year. It is funded through federal tax dollars (or borrowing) and absolutely costs money.
▪️When recipients repay their loan, this is sent back to the US Treasury (via a student loan servicer middleman). Ostensibly, this would repay the initial taxpayer money sent out, if everyone repaid their loans. If the loans are forgiven, the US Treasury takes the hit.
▪️Pretending it’s not costing money because interest accumulates is nonsensical. In the meme’s hypothetical scenario of 365% interest, yes. But at 7% interest, when the CPI is currently above 8%, the government (i.e. taxpayer) is already losing on the loans.
▪️And that’s if everyone was paying and there were zero costs associated with administering the loans. But people aren’t paying (there’s still a moratorium), there are always defaults, and there are administrative costs.
▪️Plus, not only is $10K per borrower being forgiven, Biden’s order also changes the income-based debt repayment program (IDR) to cap payments at 5% of discretionary income (income exceeding 225% of the poverty line).
▪️Thus, an individual making $75K/yr would only be responsible for $2,221/yr ($185/month) whether they borrowed $20K or $200K. And after 20 years (now sometimes only 10 years) the remaining loan balance is forgiven (i.e. absorbed by the US Treasury).
▪️The result is this will cost a lot of actual money. The Wharton School estimates ~$500B over 10 years, but the real impact could be the changes to the IDR, which could easily cost over $1T as new borrowers change their behavior (take on even more loans).
https://budgetmodel.wharton.upenn.edu/issues/2022/8/26/biden-student-loan-forgiveness
▪️This meme is correct on one aspect, your taxes aren’t paying for loan forgiveness, because the government isn’t adding new taxes to pay for it. It will simply add to the debt, which will be paid by future taxpayers and/or through inflation. But it will certainly cost someone actual money.
▪️Wait, this is the guy libertarians and the new right rave about being a great historian?! This sounds like a clueless meme from The Other 98%, except they wouldn’t add in the bizarre defense of feudal lords. Feudalism didn’t deprive peasants of their livelihoods for abstract goals? This is total fantasy.
▪️Amazon employs 1.55M, so this is less than 2% of their workforce, although these cuts will be to corporate, which employs 350k, so 8.5% of that. The CEO says there is an excess of bureaucracy at Amazon, and AI can automate certain repetitive tasks. Also, much of the cuts will be to HR, which is expected shrink by 15%, yay. Managers and HR are peasants now?
▪️I don’t know the inner workings of Amazon, and neither does Darryl, but this seems to be normal management practice to keep a company efficient and competitive. Given the immense size of Amazon the numbers look large, but far bigger shakeups happen all the time in the private sector. Apparently, under the new ...
▪️This statistic is just made up. The reality is that there hasn’t been a real study on this since 2013, when Pew did a poll. They found that Democrats were actually more than twice as likely as Republicans to report ever using food stamps (22% vs 10%).
https://www.pewresearch.org/short-reads/2013/07/12/the-politics-and-demographics-of-food-stamp-recipients/
▪️Obviously, those percentages could have changed over the past decade, but it’s very likely that Dems still receive more SNAP benefits. Certainly, without an actual study or poll the claim should be thrown out, as it wildly contradicts a previous study.
▪️The meme probably comes from a 2024 analysis by Social Explorer, which found that 78.7% of US counties with the largest increase in SNAP since 2010 voted for Trump in 2020. But that tells us nothing about the actual number of Republicans (or Democrats) who are receiving benefits, just county-wide trends.
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▪️I was playing around with the new Grokipedia and it already seems much better than Wikipedia (which admittedly isn’t saying much). I was looking for a topic that is politically polarizing that I also knew a lot about, so used “Kenosha unrest shooting” to compare the two.
▪️A key component to the shooting was understanding the broader context behind the Kenosha riots and who Kyle Rittenhouse ended up shooting. Wikipedia simply says that Jacob Blake was shot by police and was paralyzed, thus unrest. Grokipedia gives a much more in-depth account so the reader can see that Blake was a serial criminal with a warrant who had a knife and was resisting arrest while fleeing with children in his car.
▪️When it comes to those who were shot, Wikipedia just gives the names and ages. Grokipedia goes in-depth on each person and about their violent criminal history and mental instability that night.
▪️Part of the left wing mythology over Rittenhouse was removing the context and ...
