Category: Economic

Student Loan Forgiveness – Be careful what you wish for…

I’m still on the fence on how this will be done properly. Student loans (college loans) have been poorly mismanaged for several years. Whether it be at the initial start of getting a student loan up to where you’re working or starting to work and pay off your student loan balance.

Again, what I may see happen are unintended consequences once everything has been implemented and a few years pass after everything has been said and done. What people may not understand, beforehand, that student loan forgiveness has been tried under the Clinton administration (REPAYE) – as indicated in the video above – there was a repayment plan but the remaining balance forgiven was then TAXABLE AS INCOME to you (the remaining of the loan that was forgiven):

Under Biden’s proposal for this student loan is that:

If the balance would be forgiven under Biden’s proposal, who would essentially pay for these “forgiven” student loan debt balances? Here’s where I foresee the unintended consequence – This will impact quite a bit of taxpaying Americans – in all spectrums of the taxpaying Americans – not just the high income and/or wealthy. It may not impact everyone instantly – but it will over time… and I bet the taxes on income will go back up… I could be wrong – but only time will tell.


Biden: Cancels Student Loans 3 Ways

Biden: Cancel Student Loans Immediately

If people remember, the Federal Government took over the student loans back in year 2010. The Federal Government was the main creditor, as of 2010, to manage the student loans. My question is, “Why was the need to do so?”

Apparently some members of Congress don’t know that banks are no longer the “middle-man” in student loans because the Federal Government took over.
Some things to think about…

Thomas Sowell is a gem

A very good interview with American Economist, Mr. Thomas Sowell. He’s born in the 1930’s and he’s well in his 80’s today. Still a very intelligent and a wonderful individual. This is one of many interviews I have seen of Mr. Thomas Sowell. He is truly a gem for this period, among others of course.

He has argued that it is a propaganda tactic akin to those used by Joseph Goebbels because it comes with an attitude that it must be “repeated long enough and loud enough” till it is believed and people “cave in” to it (Wikipedia).

Is increasing minimum wage beneficial or hurtful? I believe it is hurtful.

  1. A lot of people will lose their jobs or have their hours reduced.
  2. Businesses will close and the jobs they created will disappear.
    1. This will affect small businesses heavily.
  3. Young people will lose that “entry-level” job opportunity.
    1. Having a entry-level position usually teaches an individual – new to the work force – basic responsibilities (e.g. showing up on time, working together with others, knowing how to follow instructions, providing customer service, etc.)
    2. No one can get the better job until they have their FIRST job.
  4. The cost of ALL workers will have to go UP.
    1. Increase in labor cost to workers – will lessen the profit of that business
    2. If there’s less profits – the unintended consequence is that the business will cut the hours (as referred above), hire less people, and not expand their business.
  5. Fewer people will open businesses.
    1. A company that does not exist never employs anyone.
  6. Prices for everything will go up

Another perspective on increase in minimum wages.

At the 1:10 minute mark.

The unintended consequences has resulted because of the increase in minimum wages in Seattle, WA.

The minimum wage has ever been an ongoing discussion for many years – this interview was done in 2013.

Tax Rates – The Laffer Curve

Pay attention to the Romer & Romer Study.

He does make a valid point.

It doesn’t matter what kind of business you operate or if you’re just an employee for a company… Under the progressive tax system, the more money that you make, the higher tax bracket you’ll be put in and more taxes you’ll pay out of your own pocket.

Obviously, the higher tax bracket you start being into, you find ways to lower your taxes or you just work less.

This adds on to what one of John Stossel’s videos mentioned, the higher the taxes there is imposed – the wealthy or big businesses making big bucks find ways to lessen their taxable income (e.g. work less hours) or move their business outside were they can utilize favorable tax incentives, etc.

America’s Progressive Income Tax overview

Simple example of the Progressive Income Tax

Concept of basic Economics of “Cause and effect.”