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New Democrat Brainstorm: Forgive Student Loan Debt, So the Kids Can Take Out Mortgages


If you think there’s anything accidental about the student loan debt bubble, you haven’t been paying attention to how the Left works.

Debt is a fantastic way to control people, because politicians can offer to relieve portions of that debt in exchange for votes. The political battlespace has been well-prepared by teaching citizens to hate the banks that loan them money to fulfill their ambitions and satisfy their desires.


Student loan debt is an especially useful instrument of control, because young people deeply resent it… especially when they can’t find decent jobs after graduation. They’ve been told college is an entitlement, and anyone who doesn’t go is destined for a life of miserable blue-collar drudgery.

Their exorbitant university tuition purchases them a low-quality education that seems, at some institutions, to consist primarily of training in how to become a useless, bitter radical that no sane business owner would employ. The Left tacitly acknowledges the poor quality of the incredibly expensive educational institutions it dominates by telling Americans they need to import huge numbers of skilled foreign workers, even as the citizen workforce dwindles and wages remain flat.

The result is a new generation burdened with staggering student loan debts it will have a great deal of difficulty repaying. Right on cue, here come the same Democrats who created the higher-education crisis, with offers to alleviate some of the financial burden their policies piled upon the backs of young people.

Rep. Marcy Kaptur (D-OH) argues at The Hill that we should “renegotiate student loan debt” so the kids can turn around and take out mortgages they won’t be able to repay. Say, what was that 2008 financial crisis about, again?

Drive through the neighborhoods of Ohio.  You will observe thousands of vacant homes devoid of a generation of aspiring young homeowners. The opportunity for this generation to buy a first home has been thwarted by sluggish income growth in the job market often made worse by the overcharge of student loan debt.  That debt has put home ownership out of reach for millions of credit worthy borrowers.

All across America, this story repeats itself.  Millions of habitable homes sit unoccupied. In 2014, the percentage of houses sold to first time homebuyers dropped to 33 percent, the lowest level in three decades. These separate but related conditions retard economic growth, depressing home purchases across our country.  These trends must be reversed. Debtors must become equity stakeholders.

The current slow recovery is the first since World War II where housing has not led our economy forward. At the end of last year, nearly 17 million homes sat vacant in the United States. That’s enough empty homes to house the combined populations of Ohio and Indiana. Vacant structures also drag down adjacent property values and contribute to a downward spiral in neighborhood stability and worth.

Wow, what a forbidding wasteland middle America has become over the past eight years! Who’s been President, and which party did he belong to? We’d better make sure we never put those guys in charge of anything, ever again. Looks like permitting them to nationalize student loans under the guise of health-care reform was a terrible idea.

Kaptur then discusses the immense $1.3 trillion student loan debt, noting that the number of Americans with such debt increased from 29 million to 40 million in just ten years. “Student loan debt is weighing down millions of young families, effectively locking out their buying power to purchase their first home, the most common way in which Americans have grown wealth in previous eras,” she asserts.

It sure does sound like things worked a lot better in the good old days when Obama Democrats didn’t control the economy! Too bad we can’t send articles like Kaptur’s back to the voters of the Aughts in a time machine, with an especially urgent warning to keep socialist hands off the subprime mortgage industry.

It’s no accident that young people are now emerging from primary education into an over-credentialed, under-performing job market where absurdly expensive college diplomas are needed to begin building the sort of life people could get without them a generation or two ago. It’s no accident that the landscape is littered with cobwebbed surplus real estate worth billions of dollars.

Those conditions are the result of deliberate socialist policies – market interventions staged by politicians who arrogantly declared they knew how to allocate economic resources better than the people who wanted to voluntarily buy and sell them at market prices. Naturally, they had little trouble finding private-sector cronies eager to make a few bucks off their policies.

There’s an air of cargo-cult thinking around the celebration of home ownership as the key to wealth creation. Finding ways to set people up with middle-class houses doesn’t automatically grant them sustainable middle-class lifestyles. That’s one of the most important lessons to take from the 2008 financial crisis. Homes can become financial booby traps, if they’re not managed carefully. They are best seen as an important instrument of family wealth creation when all of the other ingredients of middle-class success are present… pointedly including a stable family.

The social upheaval engineered by the Left over the past fifty years has left too many Americans unable to become “home equity stakeholders,” as Kaptur puts it. Her proposal amounts to getting the Department of Education, HUD, and the Treasury Department together to devise a means of waving away student-loan debt so they can take out home mortgages.

That won’t do anything to address the government-created crisis in higher education, and if it repeats the subprime-crisis mistake of saddling people with mortgages they can’t really afford, it will only temporarily alleviate the problem of excess home inventory. The houses will eventually wind up in foreclosure again.

“Congress has the power to unleash the debt stranglehold on the next generation,” Kaptur concludes. “Let’s transform student loan repayments into equity stakeholds. We have the resources, the power, a compelling economic interest, and a moral responsibility to do something about unshackling the aspiring generation.”

It’s too bad Democrats didn’t have any moral qualms about shackling that generation in the first place. The truth is that liberals were eager to do so, and they’re salivating at the prospect of buying the younger generation’s votes by offering them student loan debt relief, “free” community college, and other goodies. There will probably be a whopper of an offer coming from Hillary Clinton at some point during her presidential campaign. Let’s hope young people have learned enough to stop rewarding the party that constantly seeks to indenture them.

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