Student Loan Forgiveness Was a Misguided Initiative Anyway

Whenever the government opts to simply distribute funds, it's bound cause issues, and understandably so, for numerous reasons. It's not their money, after all. It's our money. And how ever it gets spent needs to at the very least, make sense.

The student loan forgiveness program never did.

If you benefited from the program, it's easy to see why you might support it. But at the end of the day, the bottom line is clear: if it's debt, and it's elective debt like college loans, then the responsibility to repay it should fall on the one who incurred it.

While the program was a key initiative touted by the Biden administration, polls consistently showed it was extremely unpopular—not to mention it wasn't actually constitutional.

When the government is already burdened with its own enormous debts, and is literally hemorrhaging money, how can we, as Americans, support what is essentially frivolous spending of our tax dollars? It makes no sense.

We know the why of course, although the left would never admit to it. They called it a "crisis." They were trying to buy votes from a needed sector of society. It's really that simple.

It's dead in the water now, as was recently announced. Well, of course it is. They don't need the votes anymore. Well, that and the Biden administration knows the program won't see the light of day under the Trump administration anyway.

Nor should it. Because again, it made no sense to do it in the first place.

I think there were a good many people who thought about it and wondered, where else could the money be spent if we could assume we actually had it to spend? What other areas may have offered better opportunities to provide relief, not to just one sector of society, but the masses?

Maybe we could have suspended the federal gas tax to help reduce the cost of gas and diesel. Maybe we could have offered an automatic energy credit to help with the burden of higher energy bills, especially during winter months.

Or better yet, perhaps we could have looked to aid our aging public by raising social security benefits, suspending income taxes on those benefits, or if we wanted to forgive debts, maybe we could have forgiven medical debts incurred by seniors.

The point is that while just giving money away alone rarely makes sense, if it was to be given away, at least one could better digest the notion of doing it at all if what it was given away for made at least some sense.

Set aside, if you will, that many people had to be left scratching their heads a bit at the whole idea of student loan forgiveness. I mean, aren't college grads supposed to be the smartest of the smart? They couldn't figure out how to manage and repay the debt? And wasn't the whole sell of the college education to make more money than non-college grads? But they couldn't repay the debt even with the supposed higher wages? And non-college grads would now have to pay college tuition through taxes on lower wages?

Beyond just giving money away, perhaps what would be better to do is to address why college costs as much as it does, and why the promise is not delivering the goods, but rather saddling students with debt they can't repay in the first place.

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© 2024 Jim Bauer

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What Are the Drones Doing Over Our Heads?
Despite reassurances, the mystery of the drones over New York and New Jersey has imaginations running wild. Until we have some answers, it's anyone's guess why they are there and what they are up to, leaving growing public concern and speculation.

No New Tariffs: Told You So

I AM NO MORE A FAN OF TARIFFS THAN ANY OTHER RIGHT MINDED CONSERVATIVE IS. Tariffs are bad, we all know it. So, you would think when I first heard President Trump utter the word "tariffs," I would have immediately and rightly cringed.

No sir. Don't do it. PLEASE don't do it. You will destroy every single economic gain you have achieved.

But I paid close attention to what Trump was actually saying. You had to dig deeper into the context of Trump's language to fully understand what the aim was here.

President Trump did not want to impose tariffs. What he wanted to do was bring some of these other countries, whom with we have serious trade deficits with, to the table to negotiate. 

You have to start somewhere. And for him, the place to start was to simply say, "Look, we have the economic might and power and we also have a very strong and robust consumer base that you (these other countries) have a strong desire to be able to gain access to. You are going to want to work with us to level the playing field a little bit."

More dollars in the American economy by providing more jobs to Americans also ultimately offers an opportunity to create more buyers for foreign made goods.

I had a strong, sinking suspicion that we would not see the tariffs Trump was supposedly wanting to impose. That sinking suspicion is even more now after the USMCA announcement which will replace NAFTA provided the three congress's can ratify it, and the announcement that Trump will delay raising Chinese tariffs for 90 days while more negotiations are underway.

The tariffs aren't coming, folks. Not from what I can see. And this will only further bolster the economy and lay more groundwork for increasing American jobs, increasing access to these other countries' consumers, and so the wheels of commerce will turn.

Everybody involved will see a benefit here. Everybody.

If You Think Steel Tariffs Are About Steel Tariffs...You Are Missing The Point

THE TRUTH IS, THERE IS MORE TO THIS STEEL AND ALUMINUM TARIFF THAN WHAT MEETS THE EYE, and it is clear that those who are strongly opposed to the tariffs, citing historical examples that even I cannot disagree with, it is the dynamics of the tariffs that everyone is missing the point on.

When I found myself to be a proponent of the tariffs, which admittedly does go against my grain a bit, it was only after I looked at what Trump was really proposing. What he was really saying. And what his true intent of the tariffs happen to be. His signing of the executive order today only serves to confirm the message I was getting when he first talked about it.

It is not an across the board tariff. There is a ton of flexibility built into it. And the tariff is not the intended target. Nor are importing countries. ONLY the bad players. AND he has a larger interest in mind.

Like renegotiating the decades old and outdated NAFTA agreement, which should not be ditched, but certainly should be revisited.

The executive order is clear that at least one of our primary suppliers of steel, which happens to be Canada, is not currently included. Neither is Mexico, although they do not supply much, if any of our steel. So really, what is the real impact of the tariffs? I would argue it is actually nominal.

BUT, that does not mean that steel suppliers and producers of products that use it to make their products are not going to miss the bigger picture, jump on the train, and use it as an opportunity and as an excuse to raise their prices. And they are doing it already even though the tariffs do not even go into effect until sometime next month.

What does this ultimately equate to? It's a money grab, folks. It is gouging the end user on the premise that prices will be negatively impacted on a broad scale when it is clear that will not be the case at all.

Just read the wording of the executive order instead of taking in the talking points of all of the naysayers.

Granted. Yes. You do have to deal with the impact of the tariffs, even if they may be largely inflated and fake. Sellers set the prices and buyers have to simply pay the prices set. That's the nature of the game. But at the end of the day the price increases, at least for now, have nothing at all to do with the tariffs, and have everything to do with what the sellers either anticipate, or want the perceived outcome of the tariffs to be.

The fact is that right now what we see happening is more reactionary in the price of steel since the tariffs have not even gone into effect yet. Steel producers and manufacturers who use steel are honestly pulling price increases out of the air almost as badly as callers of the $15 an hour minimum wage did. There is no market data to support the increases. There is no added cost to the market right now. It's all just anticipatory. In other words, what is driving up the cost of steel and aluminum right now has nothing at all to do with the tariffs, only the anticipation of the tariffs and the perceived idea as to what those tariffs will mean at the end of the day.

The light at the end of the tunnel is that if you actually read what is in the executive order what you find is that nothing in the executive order is in stone. The executive order, when you dig a little deeper into it, is nothing more than a tool to negotiate. That is what Trump does, and he is good at it. The executive order is a conversation opener.

Here is what you want. Here is what we want. How do we find common ground to get there? If you give us a little of what we want, we can negotiate what you want—including on these tariffs—and we can meet somewhere in the middle, and we all win.

That is what these tariffs do. That is what these tariffs hope to achieve. To open a dialogue. Trump has been very clear that the percentages can go up or down depending on the country, and depending on what else we all may want to talk about when it comes to trade.

The difference between tariffs and the impacts of them of the past and the ones we are looking at now are the dynamics and the real intent of what they hope to achieve.

If you do not understand what these tariffs actually mean, I suggest you read the book by Donald Trump called The Art of the Deal. You cannot take these tariffs on the surface. You have to open your mind a bit and read into what he is really trying to do here. If you do that, you'll see that what Trump has in mind actually has nothing at all to do with steel and aluminum imports. There is a much bigger and broader picture here. It's the macro. Not the micro.

Keep an open mind and give this a little time and what you will see is that steel and aluminum prices will stabilize, and what we will wind up with at the end of the day is a much better situation when it comes to all trade for America and American workers. Mark my words.

Tax the Rich?

It's an idea that looks great on paper, and certainly the masses enjoy the idea of taking money out of the pockets of the rich. While the vote in the recent reelection for President Barack Obama was not a clear mandate for higher taxes, the Obama administration is definitely interested in continuing its pursuit of diminishing the wealth of the most wealthy people in the country. In fact, he recently announced that he wants to raise $1.6 trillion in new tax revenues, which is double the amount he originally said he wanted.

The question is who ultimately pays the tax? I think the answer is very clear. It's not the rich.

In order to understand how taxes affect everyone and not just the rich, one has to keep in mind what businesses do when they have to incur higher costs to run their businesses. Higher taxes are costs.

While it is not a direct comparison, I can use my rental property as an example of what happens when the cost of owning and operating that property increases. As a part of the rent I offer my tenants "free" heat. I put the word free in parenthesis because whether or not the heat is truly free is a bit of sleight of hand, is it not? So long as my rental property produces cash flow, the actual cost of the heat is being paid by the tenant. So, what happens when the cost of my heat bill goes up? Of course this cost is ultimately passed on to the tenant in the form of higher rent.

The same applies to the cost to insure my property, or the cost of repairs to the property. You can also apply this to higher costs incurred through higher property taxes. All of these costs are ultimately passed on to the tenant in the form of higher rent as well. Perhaps the costs are not immediately passed on. But at some point they must be, otherwise I have no reason to own the property.

I've made the point before that businesses do not pay their overhead. In fact, they recoup their overhead.

In addition, it's important to note that any money that the government collects from the private sector are essentially removed from the real economy. I've heard many people on the left argue that dollars collected in tax revenues are simply spent by the government, and that those monies ultimately wind up in the economy as a whole inevitably.

The problem with this thinking is that it is not exactly true. Consider that much of the dollars that the government collects must go to repaying debts and interest we owe on those debts. That means that a lot of the money goes to other governments we've borrowed money from—China would be one of the larger ones. We also spend hundreds of billions of dollars a year in foreign aid. Again, that money does not necessarily return to our own economy. The money essentially just disappears.

At the end of the day higher taxes on the rich and on businesses means less money will be spent on investing in new company startups. It means less money will be spent on research and development, and on capital expenditures. It means less money will be available to hire more workers, or provide pay raises. It means less money will be available to pay, for example, certain benefits like healthcare for their workers. It means less money will be available to make matching contributions to their worker's 401k plans. It means less money will be spent on marketing that helps their businesses to grow.

And let's not forget the first example I made about investment. Less money will be in the real economy for people to help companies obtain the funds they need to expand the business. All of this leads to higher unemployment, less job creation, and higher prices for all of the goods and services that the middle class, and the poor buy.

When it comes to taxes, people really need to see the forest for the trees. Sticking it to the rich is sticking it to ourselves, and there really is no way of getting around that. If President Obama does not cut spending, and reduce taxes across the board, the people who will be hit the hardest are the very people who he says he wants to help.