The Roots of Opposition
The point needs to be reiterated: Full student debt cancellation, of the kind Sanders is proposing, would create at least a million more jobs than the Warren plan. Why, then, would progressives oppose it?
Some of the liberal opposition is often grounded in the mistaken belief that Warren's plan would do more to reduce the racial wealth gap than Warren's. The opposite is true: full cancellation would reduce the racial wealth gap more than Warren's plan would. As economist Marshall Steinbaum, a co-author of the Levy report, later concluded: "The more debt cancellation there is, the more racial wealth inequality is reduced-at least among the plans that have actually been proposed."
There is also a deep attachment to targeted economic programs in certain liberal circles, based on the sense that government programs should be focused solely on individuals in dire need. (I wrote an essay in The American Prospect on that topic.) For student debt cancellation, this is often framed as a desire to avoid helping the "wealthy." But truly wealthy individuals are unlikely to hold student debt. If they have family wealth, there would have been no need to borrow for college. If they have subsequently become wealthy, their advisers have almost certainly told them to pay off student debt, which normally charges high interest rates.
It's true that there are some mildly prosperous professionals who hold a large amount of student debt. But it takes a strange moral logic to deny jobs for a million working people out of fear that, say, a well-to-do orthodontist on Long Island might get a break she doesn't deserve. There is no such liberal compunction about infrastructure programs, for example, even though they could make a few construction executives wealthy as they create jobs for working people.
The million-plus additional jobs created by full cancellation would go to a broad array of working people in a range of fields, in industries that range from restaurants to sales, and from auto manufacturing to construction. A large percentage of them would go to people of color, which would further reduce the racial wealth gap at a time when the African American unemployment rate remains roughly double that of whites.
To sum up:
- Full cancellation creates at least a million more jobs than Warren's partial cancellation
- Full cancellation does more to reduce the racial wealth gap than Warren's plan does
- Full cancellation will almost certainly do much more to benefit millennials, the generation that's been hardest hit by student debt and is the largest percentage of the workforce
- Full cancellation will almost certainly do much more to help black workers, who are experiencing twice the unemployment of white workers
There are other benefits to full cancellation, too. It's easier to explain to voters. Its million-job advantage makes it easier to build support among people who have never gone to college or acquired student debt, groups that might otherwise resent student debt cancellation. It would stimulate more economic growth, with greater advantages for the entire economy (including investors). And it wouldn't be subject to gaming, the way Warren's plan would be. (Children would claim to live elsewhere, people would move taxable income from year to year, couples would defer marriage, etc.)
Elizabeth Warren has many impressive policy proposals, and is very possibly unaware of the differing impact of her means-tested student debt plan on working people. There is every reason to hope she will reconsider after reviewing the advantages of a broader proposal, and join with Sen. Sanders in supporting full student debt cancellation.
This article was produced by Economy for All, a project of the Independent Media Institute.