Biden Just Gave Away Another $1.2 Billion Of Your Money. He’s Not Done Yet.

A few years ago, the total outstanding principal on student loans was $1.6 trillion. Just to put that in perspective, that’s eight times the mortgage losses in the S&L meltdown of the 1980s and almost double the size of subprime mortgages in the 2007 financial crisis.

Biden wanted to forgive these loans to pander for votes among borrowers in their 20s and 30s. His ability to do so without congressional approval was litigated to the Supreme Court, which ruled that Biden did not have the authority to forgive the loans.

At this point, Biden’s lack of respect for the Supreme Court is well-known. He ignores their rulings all the time. This case was no different.

Biden proceeded to forgive the loans anyway using small slices and technical rationales such as lack of disclosure by the lenders, overstatement of job prospects by the schools, putative public service by the borrowers, and so on. Biden even gave a speech recently where he bragged about how he had ignored the Supreme Court.

We can leave all of that to the lawyers and to future litigation. What about the money?

This article reports than Biden just forgave another $1.2 billion of student loans on top of billions of dollars of earlier loan forgiveness. Who pays for all of that? You do.

When the student loans are made, no expense is recorded on the federal budget because the loans are assets and are expected to be repaid. When the loans are forgiven (which can be years after the loans were originated), the amount forgiven is recorded as an expense on the federal budget deficit and the asset is written off. The deficit is paid with taxes and future borrowing that are also paid with taxes.

Every time Biden forgives another tranche of student loans, you should get out your checkbook and write another check to the U.S. Treasury because that’s what’s actually going on.

Biden is buying votes with your money but without your knowledge or consent. As we say in New Jersey: Enjoy.

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