An Econolol Hall of Fame Nominee…Free Loans for All!

We were asked to sign this petition in favor of  a proposed bill by Congressman Hansen Clarke (greatest name ever) that proposes a rational, well-reasoned economic policy…or not.

Rep Clarke would like to forgive the student loan debt of all Americans to produce an “immediate stimulative effect on our economy”.  The tentative title for this bill was “Hooray for Free Stuff” but apparently that name has been dropped.  Read the petition here…

We feel a tad silly even posting this as it is almost too absurd to be wasting time and thought on…but since upwards of 400k people have signed this petition, here is an excerpt from the reply to my confused, but well intentioned, friend who sent it to me.

“Investing in education as in anything else is a personal choice where the individual must assess the costs, risks, and potential benefits from the investment. There are many who choose the path of education and advanced education and there are many who choose to enter the workforce to gain skills, this represents a trade-off. Education may result in an individual’s cost of labor (compensation worth) increasing exponentially, while it may take another person years of gaining experience and skills to reach that same salary level. This second person’s investment has been his time and sweat, rather than educational costs. Will this individual also be compensated with the magical Gov’t money? If I chose to start my own business and face the risks entailed therein rather than pursue an MBA and the business failed, should I too be compensated? Or if it succeeds, should the plethora of taxes I will be exposed to go to paying down the investment of someone who chose an alternate route?”

Simple stuff and that was one paragraph of a longer email that went on to explain how gov’t expenditures work, how market inefficiencies are created, and other condescending blurbs.

Anyways, the lesson here is that no matter how absurd a legislative proposal may be, as long as someone is receiving something for free, it will garner support, unintended consequences be damned.

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