Whenever talk of student debt cancellation, or even of a “student debt crisis,” gets too loud, there is a bevy of pundits ready to tut-tut. Don’t you so-called progressives know that most student debt is held by young professionals? That the young professionals with the biggest debt loads are unlikely to default on their debt because they have leveraged their education into high-paying jobs (or at least have well-off family who can pitch in)? And so don’t you see that cancelling student debt would mostly just be a subsidy to already comfortable people? And you call yourself progressive? Shame! Go think about what you’ve done. Let the professionals take care of the policymaking.
Now that the Levy Institute has published a report on the likely macroeconomic effects of student debt cancellation and some left politicians have taken up the idea, David Leonhardt at the New York Times saw fit to rehearse the arguments he and others have made multiple times before (apparently not having read the arguments against his position in that selfsame report). Here’s why he’s wrong again.