Fact: “For over 30 years, the rich have gotten richer, the poor have gotten poorer, and the middle class is slowly but surely being squeezed out of existence.” How long can this trend continue, and to what end? Most importantly, what should be done about it?
Hansen Clarke (D-MI) proposes a solution in the form of a bold economic stimulus strategy that directs debt forgiveness to the middle class American (taxpayer) rather than super-rich, corporate elite. H. Res 365 asks congress to bestow their billion dollar charitable bailouts to debt-ridden college students. Reversing a talking point favorite, it’s considered more of a trickle-up approach to fortifying the economy that aims to strengthen the middle class, rather than bring it to its knees.

Once the required amount of signatures are received, the following letter will be forwarded to the US Congress and President Barack Obama:

“Forgiving the student loan debt of all Americans will have an immediate stimulative effect on our economy. With the stroke of the President’s pen, millions of Americans would suddenly have hundreds, or in some cases, thousands of extra dollars in their pockets each and every month with which to spend on ailing sectors of the economy. As consumer spending increases, businesses will begin to hire, jobs will be created and a new era of innovation, entrepreneurship and prosperity will be ushered in for all. A rising tide does, in fact, lift all boats – forgiving student loan debt, rather than tax cuts for corporations, millionaires and billionaires, has a MUCH greater chance of helping to rise that tide in a MUCH shorter time-frame. The future economic success of this country is wholly dependent upon a well-educated, prosperous middle class. Instead of saddling entire generations with debt from which there is no escape, let’s empower the American people to grow this economy on their own!

Therefore, we, the undersigned, strongly encourage Congress and the President to support H. Res 365, introduced by Rep. Hansen Clarke (D-MI), seeking student loan forgiveness as a means of economic stimulus.”

Desperate times call for desperate strategies and all hands on deck to prevent untold societal despair. The trickle-down rationale for the $700 billion federal bailout package (every penny provided for by the American taxpayer) was a long shot with dreadful results including a frivolous spending extravaganza for “needy” billion dollar corporations. HR 365 may have it’s drawbacks too, but with college students accruing record amounts of student loan debt at high interest rates, a radical approach could actually present the solution. It’s time the middle class receive some of the benefits and safeguards that those less in need of it habitually enjoy. And at the end of the day, the nation’s prosperity and that of the middle class are one and the same.

We’re in desperate times folks. Is Rep. Clarke’s H. Res 365 on the money or off the mark? If you’re with the former and would like to sign the petition, click here.

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  • So do we all realize that forgiving debt does not mean the debt goes unpaid? Someone has to pay the money back to companies who own the loans. If the government forgives those loans and pays them for us, do you all know that means we are paying off the debt? That money comes out of tax payers dollars. So everyone would be paying for your education and not just use. This is not a wise way to stimulate the economy and is only robbing Peter to pay Paul. Those of us with debt need to look for businesses to start so that we can make enough money to pay our own bills while employing others. Just my opinion.

  • joan frisinabowles

    It is time for Congress to pass legislation that is going to begin to benefit the middle class and the working people or the middle class as we know it will perish. Forgiving student loans will put trillions of dollars back in the consumers pockets, stimulate the purchases in this country, and help people save their families from the devastation of this depression. This is a different depression. Work has changed. Jobs have disappeared, and the ones emerging are not filled by most Americans because our educational system has failed them. We have a failed ideology in ths nation, and it must change. Congress is Bought. Therefore helping their banker buddies. Americans are struggling to get their voices heard and change this nations dysfunctional legislation, and restore Consumer protection laws. DEBT is discussed by many economists as the reason the middle class can’t stimulate the purchases in the USA. This will only get worse. Forgiving debt for We The People is absolutely imperative, and the time has come to change from old-think to new-think, and as many economists do agree, it will take bold and new ideologies to replace this failed one. Support forgivestudentloandebt reform and pass HR 365! Go Hansen Clarke! Go Forgivestudentloandebt.com and Robert Appelbaums’ group. Sign the petition over l/2 million have already signed – at signon.org! The middle class must stand up and seek the truth and act on it. It is our responsibility a citizens — or we will perish.

  • Jeff

    as someone who has a tremendous amount of student loan debt, I would gladly accept this proposal for a full forgiveness of all student loan debt. it would accelerate the purchase of my first home, which would obviously contribute to building the economy. let’s face it, this entire country’s success is predicated on the ability of individuals to purchase real property. from that stems property taxes and all the extra costs associated with the maintenanc and upgrades to the house, having a location for raising children, paying for school systems, etc. however, a full proposal of forgiveness of loan debt is just not practical. even if the govt were to say that only federal loans are forgiven, there would have to be a time frame put on that and would basically be discriminatory towards individuals who have yet to take out their federal loan (i.e. high school juniors or seniors who have been counting on it as a way to finance part of their education) or for individuals who have gone the alternate route of accepting private loans from banks. someone on here obviously pointed out that the cost of your debt is not just wiped off the slate, it must be paid for by someone so ultimately govt forgiveness means a greater tax on the entire country. the one thing to consider here is that this is something the govt would be considering against other forms of economic stimulus.

    since full student loan forgiveness appears to be an untenable position, the more likely situation should be this: uncap the student loan interest tax deduction currently capped at $2,500 and phased out between $60,000 and $75,000 of MAGI. the $2,500 is a direct adjustment and doesn’t require anyone to itemize their deduction. if we did that, we effectively make all student loan interest deductible for tax purposes and give people a tax incentive to get a higher degree. if the govt determines that it can’t forfeit all interest, then cap the deduction, preferably at higher than $2,500, but take away the phase out. if nothing else, at least index the phase out to geographic location. making $75K in a place like NYC versus making $75K in a place like Charlotte creates a HUGE disparity in the tax system and penalizes people for working in higher paying/higher cost cities. i’ve been saying this since my very first tax class.

  • JustOneStory

    To this discussion, I add my own story. I have an undergrad and grad degree. The top three degrees in difficulty are medicine, law and engineering. I have two of the three degrees. Since first graduating, I’ve seen entire classes in these two fields turfed by companies with a thank you and one-month severance pay.

    As to all those “cheap” alternatives, I used as many as I could. I got scholarships, I worked and coming out of undergrad I scored one of the best jobs of anyone in my class. I paid on my loans on-time for years. When my division was sold to a competitor and all members of management were RIFFed, I went back to school. I got scholarships. I worked. I went into public service law. I’ve worked for the prosecutor, for Legal Aid, for a domestic violence non-profit, as a public defender and now I enforce child support orders.

    I maintained loan payments, used forebearances, consolidated and helped others with their own consolidations. My husband and I built a business, bought property, paid our taxes and all that other responsible middle-class stuff. I’d published short stories and was working on a novel.

    Then one night at 1:20 AM, a knock at the door brought it all down. Four words that change everything – “There’s been an accident.” My husband was crippled for life. Over $1,000,000 in medical bills in the first 90 days. No health insurance. Applying for Medicaid. Losing my savings and retirement fund in order for him to get the medical care he needed. Being left alone with three part-time jobs, a business and being his caregiver. The failing economy and its effect on the job market. What employer is going to take on a half-million dollar a year obligation on their health insurance plan (yes, insurers check dependent costs when they give their annual bid to the employer)?

    My loans are in the first stage of foreclosure. One guarantor is being compassionate and trying to help me re-consolidate under some new plans. However, my phone rings 20-30 times a day with robocalls from the other vendor. If my wages are garnished, I will have to quit that job. I can’t work and lose 65% of my check – especially when 65% of my monthly paid is about 1/3 of the interest. I can find cash work under the table to keep food on the table. If I was alone, I would say “screw it” and walk and join the underground economy. However, I have to support my paralyzed husband and keep a roof over his head.

    So, before you smugly say that a loan is a loan and all loans must be paid, remember there are a million stories behind those who support this bill. I’m willing to compromise. Forgive all interest and reduce debts to principal only with no interest. Allow for hardship reductions and discharge. Credit for all public service work (the current public service credit is onerous, I dont’ see anyone making it and no one will be eligible until 2017). Just do something . . .

  • SpottingLies

    What non-sense! Do you know that your loan payments are income to someone? Someone who paid out the cash already and now is expecting you to pay it back. If you want to see the economy completely collapse, forgive all loans, heck why not just print everyone $1,000,000? Oh, by the way, this is perfectly fair to someone who just finished paying off their loan by working two jobs and busting their behind? Are you going to give them their money back? How about me? I paid my loan off 25 yrs ago. I sure could use that money now.

    • Maize

      @SpottingLies — if you paid back your student loan 25 years ago, you probably went to school at least 30+ years ago. The cost of education now is TEN TIMES what it was in the 1980s, adjusting for inflation, and at the same time the real wage has gone down by about $1/hr. So sure… maybe we should only give students 90% debt forgiveness to make sure they have the same chances in life that you did.