Joe Biden’s Debt Cancellation Games

Laura: Canceling student debt is something they could still do. Why do you think they are not?

Ryan: I only have psychological guesses. It’s safe to say that Biden could do it without anyone else saying so. He could just cancel it and be done with it. I think you see typical Democratic hesitation, a reluctance to do aggressive boundary-pushing things if they can possibly help him. It smacks of Trump to them, or, worse, the socialist left. I think maybe more importantly, you see the class division within the Democratic Party and a desire to discipline the young left, which you see in a lot of people like Josh Barro, Matt Yglesias – that kind of person. Student debt football has become something of a weapon in this internal coalition argument.

Alexander: It has taken on symbolic importance beyond politics, that is, Which side will win this fight for the Democratic Party?

Ryan: Yeah. It is true that young college graduates are a central constituency of the new socialist groups to come. They’re advocating for the cancellation of student debt, so telling them to shut up is a very popular thing. If you pledge to keep the AOC and all the filthy hippies away from the levers of control inside the Democratic Party, make student debt forgiveness some kind of handout to Hamptons millionaires or whatever. The other is a pretty powerful rhetorical weapon.

Alexander: Or women’s studies graduates from Oberlin who don’t want to pay their bills.

Ryan: “Why didn’t you get an engineering degree, you stupid feminist?”

Alexander: It’s funny: you bring up AOC as a representative of the more left-wing flank of the Democratic Party, but the politics of this very quickly became very mainstream, which I think makes the ambivalence of the White House on this. I know your magazine, The American perspective, actually reported on the debate within the party and at the White House. Chuck Schumer – not a socialist himself – spent Biden’s first year in office saying, “You have to cancel people’s debt. You said you were going to. You have to do it.

Ryan: These things mix. It’s certainly not the case that it’s only the Hamptons millionaires who would benefit here. I think Schumer is not a super precise retail politician, but he is more of a retail politician than Matt Yglesias. I think he sees this as a winning issue for his coalition. It’s just the internal dynamic – you know, if the Republicans had something like that, where some section of the party wanted something that maybe wasn’t questioned very well, like it wasn’t a thing which was a super slam dunk, 90% approval, everyone loves it, they would do it right away. They were kind of doing propaganda restricted to the people who benefited from it, and then they were silent about it. They would upgrade to Benghazi 2.0 or something like that.

Laura: It’s interesting—what you’re describing is basically that they have a political agenda and they’re able to achieve multiple goals. I think when we talk about canceling student debt, we talk about it like, like, “That’s one of the few things Joe Biden can still do.” Perhaps the mistake is to talk about only being able to do one thing, because political parties tend to be successful when they can do many things.

Ryan: Yeah. I mean, it’s the kind of thing where Republicans — for all their flaws — act like a political party much more than Democrats. They have their agenda, they try to achieve it, and then they move on. They don’t wrap around their own coalition axis for months and months, which is what Democrats did with Biden’s Build Back Better agenda. This is a debate you could have resolved with a few economists and administration aides and about 15 minutes, I think, on the first day of the new administration: do the write-off; on to the next thing. Ultimately, you know, I think it has to come down to Biden. He’s in charge here, and if he wanted that to happen, he’s the top guy. He decides whether you will write this decree or not. He didn’t push one of his economists against the wall with his hand on his back and say, “Tell me this is going to be a good thing, and now go on CNN and say it.” He just didn’t.

Alexander: I’m sure there are economists in the White House who said that would be a good thing economically. Let’s get to the heart of the matter: this debt has been frozen for many borrowers for a long time, but forgive it, what do you think of the economic impact of this?

Ryan: The latest figure announced is $10,000. You see people being a little dismissive about it, because a lot of people have six-figure debt. But that would wipe out about a third of all balances. That would reduce another quarter or something by half or more. This would be very significant debt relief for these people. Economically, you’re talking about putting a few hundred dollars a month—something like that—in people’s pockets. It would be – it may factor into the thinking of the administration – anti-inflationary to restart payments and not cancel debt, because then you would force people to send more money to the government. It would essentially be a huge tax increase.

Alexander: An increase in taxes on people in debt.

Ryan: Yeah. Conversely, if you believe that the inflation problem is not primarily caused by overspending – especially not overspending among a relatively small group of people – then they would have more money, they would have less debt, so their credit would be better, they would be able to borrow money to eventually buy a car or a house. That would be a pretty big economic boost for a lot of people, but if it were up to me, I’d say, “Start with $50,000 and go from there,” for the reasons I mentioned earlier. : from a practical point of view. most of this debt is not repaid.

Laura: What do you think will be the political consequences if Biden does nothing about this?

Ryan: I think that would be the worst of all possible worlds. You’ll have dangled that little carrot of “We’ll give you something” right in front of the noses of some of your most loyal constituents, a kind of new party core: college graduates. They were quite heavily Republican at the time. Then you rip it off for simply inexplicable reasons and a betrayal of the promise it made. The whole party looks so pathetic and helpless, you know, just a victim of their own stupidity and inconsistency.

Alexander: I find the political part like this confusing, because I feel like we can talk about democrats operating in fear of backlash, maybe they’re operating in fear of resentment and backlash that student debtors received a handout, maybe it’s behind a party, but if you operated like a normal political party, you would say that the people who will feel resentment about this are not our political base.

Ryan: University graduates under the age of 45. It’s like Biden’s most successful category of people — up there at the top, at least. To give them a thumbs up… I mean, a bit of good old Tammany Hall Democrat spirit, I think, would go a long way here. It would be like, “No, we are in power to give material gifts to our constituents.”

Alexander: Embrace the document!

Ryan: Otherwise why would you wanna get in the game, baby? That’s the whole point of holding political office.

Alexander: Let’s cancel student debt and bring back patronage jobs. It’s my platform.

Ryan: Exactly.

Laura: I feel like it would go beyond just making people happy who get this relief, because I think for a wider range of voters it would just prove, like, ‘The party I’m with am aligned can do things because it does one thing.

Ryan: In your opinion, it is extremely dangerous that the party can do nothing at all, even really about the actions of the executive, and feel that it is useless to vote for them, except to keep the Republicans – that the Democrats aren’t really going to try anything to help you, and the best you can hope for is that for a few years the Republicans won’t run anything. It’s just the kiss of death for a political party. It’s just not a very big motivation, especially for the younger voters we’ve been talking about who aren’t that attached to the political system and don’t have a lot of loyalty to the party as a whole and expect get something.

Alexander: One of the reasons Democrats ignore young voters in quotes is that they’re less consistent than older voters, but the way you make a voter a party loyalist is to associate them the fact that you are in power with something good happening for them – I would say think.

Ryan: Yeah. There is such a feeling, especially among young people – high school and college students under 45 – that the American constitutional republic is simply broken. I think it’s a terribly dangerous attitude to allow and let fester by blocking your own party’s agenda or refusing to use any of the tools of the executive to help your constituents – to prove to the time that your party can do things for the people who vote for it, kind of a social contract for a political party, and also just to demonstrate that government is still able to function in a way that it seems he may not be. But at least in the case of student debt, that’s up to Biden to decide. He could make it happen tomorrow.

Laura: Well, that reinforced all my misery about the Democratic Party.

Alexander: Yes, we found the main reasons why everything is horrible, so I appreciate that, Ryan. Thank you, as always, for making me feel good about the American experience. It was a pleasure talking to you today.

Ryan: It was a pleasure to be interviewed.


Alexander: The politics of everything is co-produced by Talkhouse.

Laura: Emily Cooke is our executive producer.

Alexander: Myron Kaplan is our audio editor.

Laura: If you enjoyed The politics of everything and want to support the show, one thing you can do is share this episode with a friend.

Alexander: Thanks for listening.