I REMEMBER, IN A COLLEGE LITERATURE class, reading Jonathan Swift’s brilliant satirical essay “A Modest Proposal.” In it, Swift’s character suggests that the Irish could go far in alleviating a host of social ills—including overpopulation, abortion, food shortages, and unemployment—by raising their children to be eaten by the wealthy class. However absurd, the tongue-in-cheek argument was well-reasoned and made practical sense.
Frankly, that’s what came to mind when I recently read an editorial by Jon Chattman called “Forgiving Student Loan Debt Would Stimulate Economy,” published on The Huffington Post (http://tinyurl.com/b572bg). The banking and auto industries received bailout money, so why not bail out students and recent grads who are shouldered with tens of thousands of dollars in student loan debt? Just wipe it off the books, give everyone a fresh start, and all will be fine.
Crazy, right? Maybe not. Physicist Niels Bohr once reportedly told a colleague, “We all agree your theory is crazy. The question is whether it’s crazy enough to have a chance of being correct.”
Chattman introduced readers to Robert Applebaum, a 35-year-old attorney, who is himself struggling under loan debt. Applebaum formed a Facebook group called “Cancel Student Loan Debt to Stimulate the Economy” dedicated to the cause. He believes forgiving loan debt for those making under $150,000 annually would help boost the economy from the bottom up. At this writing, the Facebook group (http://tinyurl.com/d6f5hc) has nearly 67,000 “fans.” Applebaum makes a reasonable argument.
“Forgiving student loan debt would have an immediate stimulating effect on the economy,” he writes. “Responsible people who did nothing other than pursue a higher education would have hundreds, if not thousands of extra dollars per month to spend, fueling the economy now. Those extra dollars being pumped into the economy would have a multiplying effect, unlike many of the provisions of the plan presently under consideration. As a result, tax revenues would go up, the credit market will unfreeze and jobs will be created.”
The plan has merit. For one thing, it could lead to the creation of more teachers and social workers, who currently can’t pursue their careers because those jobs don’t pay enough to let them simultaneously repay loans and keep a roof over their heads.
But the striking thing is the conversation that has started on the Facebook page and on The Huffington Post. Many people say they understand and want to honor their obligation to repay their loans. But, in this economy, that’s getting harder and harder to do. Perhaps debt relief—or even deferment, as some commenters suggest—could help them and the economy grow and thrive again.
Applebaum’s idea is not a new one. For many years there have been efforts to persuade industrialized nations to forgive the debt of third-world countries that could never repay the billions of dollars loaned to them. These haven’t always succeeded, but in many cases, debt levels have been reduced or eliminated, giving these nations a chance at survival. Why not our own citizens?
While I don’t fully support the idea, I’m not opposed to it either. Could it work? Is it feasible? I don’t know. But I think it should be put on the table with every other idea. Like Swift’s proposal, Applebaum makes a good amount of practical sense. There is no doubt that these are unconventional times, and I believe they call for unconventional solutions.
Write to Tim Goral at email@example.com.