“You wanna borrow, you gotta pay the man.” Rocky Balboa was right, even way back in Rocky I.
Rocky didn’t break Bob’s thumb like Mr. Gazzo told him. Bob was late on his payments and Gazzo didn’t like it.
“How come you didn’t break this guy’s thumb like I told you?”
“I figure if I break the guy’s thumb he gets laid off and he can’t make the payments …”
“Let me do the figurin’ Rock! Just let me do the figurin’! These guys think we’re running some kind of charity or something.”
Rocky, Philly palooka though he was, had a tender heart. Still, he collected the debt because he understood the deal. Whether you’re borrowing from a loan shark on the docks or from a major lending institution — and the difference is sometimes negligible — a loan is an agreement, a contract.
“You wanna dance, you gotta pay the band,” Rocky reminded the terrified Bob.
President Biden, however, is working his way toward turning the basic principles of borrowing, understood by everyone from the ancient Mesopotamians to South Philly leg breakers, upside-down. He wants to cancel student loans on a mass scale.
A terrible idea in the presidential pantheon of terrible ideas. He’s already canceled some $17 billion in student loans for 725,000 borrowers through what the White House calls “targeted relief.” But that was clearly just an hors d’oeuvre.
Biden appears to be considering forgiving $10,000 of student debt per borrower. Who will pay for this? We will. and by “we” I mean those of us who paid cash the old fashioned way, or took out loans and paid them back, or who never even attended college. It’s such a bad idea than even Biden himself poo pooed it which, like many other things, he’s apparently forgotten.
“The idea that you go to Penn and you’re paying a total of 70,000 bucks a year and the public should pay for that? I don’t agree,” Biden told New York Times columnist David Brooks in an interview last year. Right, Mr. President. So, what changed?
For starters, Biden’s popularity is plummeting like Wile E. Coyote from a cliff and that little dust cloud you see when he hits the dirt is the Democrats’ fate in the looming midterms unless something changes. In short, Biden needs a win and he appears willing to pursue it through executive action despite rising inflation and a shrinking economy. The timing for this will never be good but it’s difficult to imagine it being much worse.
If there’s any good news, it’s that Biden doesn’t appear prepared — at least not yet — to go as far as socialist Sen. Bernie Sanders (I-VT), who wants to forgive all, yes all, $1.7 trillion of student loan debt. The whole scheme seems grossly unconstitutional and illegal.
My family wasn’t wealthy by any stretch but my mother, who never attended college, managed our finances with ruthless efficiency. She operated by one simple axiom — don’t buy anything you can’t afford. She was also loath to take out any loans unless she knew she could pay them back in short order. My parents put my sister and me through college, debt free. There was no magic involved. They sacrificed. There were no expensive vacations or cars. They lived comfortably but simply, always within their means.
So, the Biden administration is effectively saying to people like my mother and millions of others who paid, or are in the process of paying back students loans, “You’ve done pretty well for yourself so we want you to pay back the loans of some strangers, like the kid who borrowed 70,000 bucks a year to go to Penn.”
This is, above everything else, a wealth redistribution scheme straight from the Sherwood Forest School of Economics. and really, Robin Hood and his Merry Men were just a bunch of thieves in silly underwear anyway.
College tuition is too high and has risen at rates that far surpass inflation. Of course, one of the reasons tuition is so high is because virtually anyone can get a loan, regardless of their ability or intention to pay it back. If this sounds familiar it’s because similar loan practices led to the catastrophic burst of the housing bubble in 2008. We tend to learn little from history.
Still, if you’re going to borrow, you gotta pay the man. Rocky understood.
So did Bob. I wish the politicians advocating for loan forgiveness in the name of “fairness” understood how unfair it is.
Rich Manieri is a Philadelphia-born journalist and author. He is currently a professor of journalism at Asbury University in Kentucky. You can reach him at firstname.lastname@example.org.