Saturday, May 19, 2018

What's the Fastest Growing and Biggest Asset on the Government's Balance Sheet?

Bill pours a beer and tells us.

-Robert Wenzel  


  1. It's worse than that. If the state lends money to a business or a student, even if the borrower repays the loan, with interest, there is still an economic distortion that occurs. Because the money lent out was forcibly extracted from taxpayers, we have no way of knowing if that use -- the loan -- was the most urgent use of those funds in terms of maximizing the satisfaction of consumer preferences (and lots of reasons to think that it wasn't). Focusing just on the seen is a mistake.

  2. The true cost of student loans to taxpayers and the economy is NOT the loans themselves. It is the payment of principal and interest that inhibits the payment and purchase of other goods and services. Graduates (and non-graduates) with high loan payments are delaying home purchases, starting families and purchase of other related goods and services putting a drag on the economy.