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Age Group 18-34 Wants More Free Money for Themselves. But Who Will Pay for the Free Money?

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40 comments on Age Group 18-34 Wants More Free Money for Themselves. But Who Will Pay for the Free Money?

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Data on Progress Poll, annotations by Mish

Business Insider writer Ayelet Sheffey says Student loan forgiveness could lure nearly half of Americans in key battleground states to vote in November.

  • Data for Progress and Rise surveyed Americans in key battleground states on student-debt relief.
  • It found 45% of respondents would be more likely to vote if Biden cancels $10,000 in student debt.

If you are looking for fluff reporting, look no further. 

Hoot of the Day 

Amusingly, Sheffey quoted delusional thinkers commenting about delusional thinking.

New York Rep. Alexandria Ocasio-Cortez said in December it would be “actually delusional” to think Democrats could win elections if they fail to follow through on voter priorities. Massachusetts Sen. Elizabeth Warren said in January that canceling student debt “would persuade a lot of young people that this president is in the fight for them.”

Delusional Thinking

AOC and Warren are delusional.

Democrats will get trounced in November because the radical Left hijacked the party, not because Democrats failed to pass the legislation. 

Curiously, Sheffey did not even link to the poll! 

The Touted Poll 

Headline vs Reality

  • BI Headline: Student loan forgiveness could lure nearly half of Americans in key battleground states to vote in November.
  • BI Bullet Point: It found 45% of respondents would be more likely to vote if Biden cancels $10,000 in student debt.
  • Reality: The baseline poll shows an edge for republicans over Democrats 48-44. That changed to 46-45 in favor of Republicans after a series of leading questions.

The change, assuming it’s believable, is from R+4 to R+1 in the battleground states. 

Is the Change Even Believable?

Perhaps, but I rather doubt it. 

People who believe in free money for student loans are going to vote Democratic anyway. 

Ask enough leading questions and a percentage of people will change their reply along the lines of “Heck yes, I would rather have even more free money.”

What Would More Free Money Do?

In three words: Dramatically increase inflation. 

  • More free money would increase demands for all kinds of goods and services. 
  • Increased demand for goods and services would further strain supply constraints and increase labor demands and constraints.

Four Measures of Inflation

Inflation data from St. Louis Fed, chart by Mish

Chart Notes

  • CPI stands for Consumer Price Index
  • PCE stands for Personal Consumption Expenditures.
  • PCE differs from the CPI (Consumer Price Index) in that it includes expenses paid on behalf of consumers such as Medicare and company medical plans whereas the CPI only included expenses directly paid by consumers.
  • Core means excluding food and energy
  • Neither the CPI nor PCE directly includes home prices, instead they incorporate rent
  • The yellow highlights on dates indicates timing of free money stimulus checks

Inflation had already taken off before the final and biggest round of free money.

That third round of fiscal was grossly unwarranted and fueled huge inflation in a big shotgun blast of free money.

Real Income and Spending Billions of Dollars 

Real Income and Spending data from the BEA, chart by Mish

I bet you can easily spot three rounds of free money. Inflation started to accelerate before the third and biggest round.

Fluff Questions and Reporting

It’s easy to ask biased fluff questions and get the answers you want in polls.

Next time, I would like to see Data for Progress and Rise Free ask “Would you be willing to cancel student debt if it meant higher prices for rent, higher prices for goods, and higher prices for everything in general?” 

Of course those saddled in student debt would still say yes. Everyone else would say no, or lie.

“Rise Free Org” is an amusing name. If you want a further rise in inflation, vote for more free money.

Real Personal Income Declines for the 9th Time in 10 Months

For discussion of the above chart, please see Real Personal Income Declines for the 9th Time in 10 Months

For discussion of inflation measures including an additional focus on food, please see Let’s Look at Four Measures of Inflation Plus a Spotlight on Food

The economic illiteracy of Progressives is astounding.

This post originated on MishTalk.Com.

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40 Comments
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Braiton
Braiton
2 years ago

Ah, the eternal quest for free money! But seriously, wanting more free money is like a universal anthem for the 18-34 squad. The real conundrum, though: who foots the bill for this financial fiesta?

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Braiton
Braiton
2 years ago

Ah, the eternal quest for free money! But seriously, wanting more free money is like a universal anthem for the 18-34 squad. The real conundrum, though: who foots the bill for this financial fiesta?

Last edited 2 years ago by Braiton
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jfpersona1
jfpersona1
4 years ago
I’m not sure I actually saw an answer to the question of who will pay.
The general answer, of course, is those who (a) can pay and (b) can’t or don’t have enough representation in our government to protect them.
From a generational standpoint that will be (in order of ‘ability to take advantage of them’) (a) Gen-X – too small to have the political cover to be protected and entering or within their highest earning years, (b) Boomers – still have enough clout as a large generation to protect themselves and no one wants to go up against ‘the poor fixed income elders’; however, they are losing members to old age and have not particularly endeared themselves to the younger generations, (c) Older Millennials – enough difference in ‘phase in life’ and outlook that they may not share political outlook with their younger counterparts and they are actually earning money, making them a target.
I don’t say any of this to start a back and forth between generational representatives – only to tell people to get ready to make peace with what happens to them. I will be disappointed if a general cancelation of student debt occurs without some sort of ‘leveling’ (such as bankruptcy or a benefit for those who paid their way without incurring a debt they couldn’t repay). I will not, however, be surprised if that ‘leveling’ does not occur and I’m steeling myself for that eventuality.
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Counter
Counter
4 years ago
If you think things are expensive now just wait until they are free
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Rbm
Rbm
4 years ago
Everybody has their hand out to the government in some form or another. From oil industry/ small business tax write offs. / banks in 08.
Everyone has their reasons why they deserve it and others dont. Guess when it comes down to it. Its who has the power to make it happen for their cause.
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honestcreditguy
honestcreditguy
4 years ago
Reply to  Rbm
funny, I haven’t had one?
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Carl_R
Carl_R
4 years ago
To summarize, everyone wants free money, but no one likes inflation. Give people the free money they want, and then, when they pay for it with inflation, they are unhappy. So, giving free money can provide a temporary boost in votes, but at the cost of popularity in the long run. Is giving free money risk free? I think not.
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vanderlyn
vanderlyn
4 years ago
the VA and military is cradle to grave marxism. get birthed on a US gov hospital and buried in a VA grave. clothing, food and shelter all 100% GOV. why do you blame the kids for wanting some of the free sh*t army goody bags. i don’t.
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KidHorn
KidHorn
4 years ago
Why does anyone believe anything in a poll? They take a tiny sample and extrapolate it an enormous amount. And polls have clearly been a tool of the left. They think that if polls make them more popular, it will suck others into backing them. People wan to be part of a winner. Seems it’s just as likely to galvanize the other side. People are just as likely to turn out to vote against a bad candidate or idea as they are to vote for a good candidate or idea.
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Jojo
Jojo
4 years ago
Once we achieve a post-scarcity world, there will be no need for money. Famed SF author Iain Banks wrote a series of 8 books on such a future called “The Culture”. Read it for a possible future, IF we don’t destroy ourselves first.
——–
Culture series
The Culture series is a science fiction series written by Scottish author Iain M. Banks and released from 1987 through to 2012. The stories centre on The Culture, a utopian, post-scarcity space society of humanoid aliens, and advanced superintelligent artificial intelligences living in artificial habitats spread across the Milky Way galaxy. The main themes of the series are the dilemmas that an idealistic, more-advanced civilization faces in dealing with smaller, less-advanced civilizations that do not share its ideals, and whose behaviour it sometimes finds barbaric. In some of the stories action takes place mainly in non-Culture environments, and the leading characters are often on the fringes of (or non-members of) the Culture, sometimes acting as agents of Culture (knowing and unknowing) in its plans to civilize the galaxy.
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Doug78
Doug78
4 years ago
Reply to  Jojo
I have heard of him but haven’t yet read any of his books but I will now. Thanks. Eventually we will live in a post-scarcity world and it would be interesting to explore its economics or lack of.
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Jojo
Jojo
4 years ago
Reply to  Doug78
This is one of my favorite series. Recommend starting from book #1.
The Culture novels (Oops, thought it was 8 books as I posted above but is actually 10)
1. Consider Phlebas (1987). London: Macmillan. ISBN 0-333-44138-9
2. The Player of Games (1988). London: Macmillan. ISBN 0-333-47110-5
3. Use of Weapons (1990). London: Orbit. ISBN 0-356-19160-5
4. The State of the Art (1991). London: Orbit. ISBN 0-356-19669-0 – also included below in short fiction collections, but included here because it is considered part of the culture series.[80]
5. Excession (1996). London: Orbit. ISBN 1-85723-394-8
6. Inversions (1998). London: Orbit. ISBN 1-85723-626-2
7. Look to Windward (2000). London: Orbit. ISBN 1-85723-969-5
8. Matter (2008). London: Orbit. ISBN 978-1-84149-417-3
9. Surface Detail (2010). London: Orbit. ISBN 978-1-84149-893-5
10. The Hydrogen Sonata (2012). London: Orbit. ISBN 978-0-356-50150-5
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Charlescmt
Charlescmt
4 years ago
Actually, I agree with student loan amnesty. At this point in a late stage debt bubble debt forgiveness or Jubillee are common. The only way to dig ourselves out of this debt hole is to induce measured inflation which often, historically, includes debt forgiveness. Instead of these universal checks in the mail we need to focus on crucial sectors like student debt. The 1980s & 90s were not prosperous because of some politician or tax policy. It was because a huge boomer generation entered their peak earning and spending years. Now we have a huge millennial generation entering those same prime years but they are hobbled by huge student debts needed to pay the education industrial complex to get worthless diplomas & skills for which there is insufficient demand. Let the Fed monetize $1.6 trillion of Federal debt which is to be used to erase these student debts totally. This will stimulate millennial consumption and, of course, inflation which will dilute the debt bubble and serve as moderate redistribution of wealth from the wealthy who are lenders to everyone else who are borrowers. To counter this inflationary pulse, the Fed needs to normalize real interest rates. Raise their key rate 50 basis points every six weeks till it exceeds inflation.This will crash the markets and cause about 20% of public companies, the zombies, to go under. This bust will offset much of the inflation of the debt amnesty while the positive real rates will halt further growth of the debt bubble which is the ultimate cause of many of these problems. Another reason to bail out millennials, moral hazard be damned, is that they need to be freed up to have babies! Many are getting older and they want to have them as much as we need them to do so. Birthrates among them are collapsing. Without a new generation to grow up to consume and produce, we will be facing sub-1% growth for decades! A recipe for revolution and more wars!
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StukiMoi
StukiMoi
4 years ago
Reply to  Charlescmt
Literate people long (as in milennia) since, realized that the ONLY remotely workable way to cancel debt, is to simultaneously cancel ownership of whatever the debtor owns. It’s called bankruptcy. Used to be common understanding back when people, at least those with student debt, could still read.
Borrowing to buy a stock, or a bond, or a house, or a car; then having the borrowing cancelled while leaving the asset intact; is simply unworkable. But that is exactly what canceling student debt of those who own any asset is. Since they literally bought said asset instead of paying down debt.
There exists, of course, no reason whatsoever to treat student debt any different from any other debt. BK clears it, period. If the guy has no assets, oh-well. Shouldn’t have lent him any money then, sucker!
What is completely, 100%, both unworkable and plain and obvious idiotic (hence no doubt exactly what dimbulb-in-chief has in mind) is to clear student debt, yet somehow still pay the creditor. With other people’s money, of course. That’s what locklimit idiocy and illiteracy looks like in practice. Hence no doubt what the locklimit idiots currently running all and everything in The West, means by “debt forgiveness” : Rob third parties, in order to, yet again, bail out not students, but useless and worthless and utterly expendable in every way banksters. Just las always. While counting on the idiots being robbed to again, as always, flaunt their advanced state of locklimit indoctrination by going along with; even cheering for; it.
Mish: Your spam filter is another locklimit idiot artifact of Western incompetence.
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TexasTim65
TexasTim65
4 years ago
Reply to  Charlescmt
This only makes sense if you give everyone 10k (or whatever amount you want to forgive). This includes those who paid back their loans since they clearly would not have done so if they knew 10k was being forgiven. In other words decades worth of former college students would need their 10k too to make things ‘fair’ which ultimately comes down to another round of stimulus of ~10k for everyone.
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honestcreditguy
honestcreditguy
4 years ago
Reply to  Charlescmt
not one person in the US deserves anything, if student debt wiped out, all workplaces should be liable for discrimination for degree only jobs…
plus I’ll take the 50K I just paid for daughters out of my cash since that is called paying off what you signed for.
the vanity college sheep need a serious whipping….lets hope this depression teaches those vanity sheep with less intelligence of 70’s HS kids a hard lesson
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shamrock
shamrock
4 years ago
“People who believe in free money for student loans are going to vote Democratic anyway.”
Not quite, they will vote Democratic OR not vote at all. It seems to me the point is to move voters from not vote at all to vote Democrat.
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whirlaway
whirlaway
4 years ago
Reply to  shamrock
Yes. That one is so easy to see. Younger people are less likely to vote, particularly among D-leaning voters in mid-term elections. And the lack of any relief on the student loan issue is going to make it even less likely that they would vote.
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yooj
yooj
4 years ago
Make student loan debt dischargeable in bankruptcy. Then I’d have less sympathy for for those seeking forgiveness. Debt slavery is un-American. Of course, those who misused the loans would have weak BK claims. Good faith should be two-way.
Also, the free money grab would be more objectionable if the cohort were not bound to support the Medicare and Social Security of their elders, irrespective of the elder’s means.
Free money grab is bad but should be contextualized.
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ajc1970
ajc1970
4 years ago
Reply to  yooj
This is the way to do it.
And also the way to get rid of the college price gouging, because once lenders start taking hits, they’ll stop loaning $200K to 20yos with no future earning potential and no collateral. Less money chasing the same goods and all that econ 101 stuff… That of course also means getting rid of all govt guarantees on these loans
Anecdotal: I returned to college for an advanced degree in May 2021. I had the option to pay out-of-pocket but all the Biden/Dem talk of forgiveness, I figured it was worth it to roll the dice… Loan fees 1.05% and no interest until I finish my studies (5.28% after). If there’s forgiveness of pretty much any amount, it covers my loan fees plus some (potentially everything). Even if odds are 10-1 against any forgiveness, this is a positive expectation move. If there’s none by the time I finish up my degree, I just pay off the entire loan and suck up the 1.05% LO fee as the cost of the game. Meanwhile there’s a good chance all of you pay for my grad degree. Thanks in advance.
As far as voting for Dems… nope, as Mish states, the left wing has captured my former Party. It’s not that I like the GOP, but unless there’s a complete purge in the Dem party, I view them as the lesser of 2 evils and probably will send my vote the GOP’s way for quite a few election cycles.
And I’m ideologically opposed to student loan forgiveness, but I’ve paid enough taxes and gotten screwed enough by dot-gov over the years (especially owning a small business during COVID) that I’ll happily accept it if they offer.
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KidHorn
KidHorn
4 years ago
Reply to  ajc1970
I’m a democrat and feel the same as you. After the 2016 election, they went insane.
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KidHorn
KidHorn
4 years ago
Reply to  yooj
The problem is student loans have no collateral, so everyone will file for bankruptcy after graduation.
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Carl_R
Carl_R
4 years ago
Reply to  KidHorn
No, not everyone will, but certainly some will, which is why lenders are careful, and why borrowers can only borrow a portion of their tuition. Remember that bankruptcy forms a long-lasting blot on your credit record, and that is not something that most young college graduates want.
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TexasTim65
TexasTim65
4 years ago
Reply to  Carl_R
It all depends on the amount you owe. It’s not worth filing bankruptcy for 10K or less in loans, but if you have 20, 30 or 40+K in loans it may make a lot of sense to do so given how much money you don’t have to pay back along with interest which could double the amount you truly pay over time.
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Carl_R
Carl_R
4 years ago
Reply to  TexasTim65
And that is why banks rarely used to issue student loans over 10-20k, except, perhaps, to students in medical school, or something similar. Students knew that was the practical limit, so they worked part time to make small loans work. The cap on student loan sizes, in turn, capped what colleges could charge for tuition. When you could no longer discharge student loans in bankruptcy, loans got much easier to get, and loan sizes increased dramatically. That, in turn, had the unintended consequences of virtually eliminating resistance to tuition increases, and led to a massive building boom of new, improved facilities on campuses.
Now, 20 years or so later, we are facing additional unintended consequences, a generation of students who foolishly signed loan papers, and who didn’t appreciate the cost they were incurring, and then, in turn, didn’t focus on taking advantage of the college experience as an opportunity to learn job skills that would build their lifetime earning capacity, and thus ended up with a lifetime of debt and little to show for it.
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KidHorn
KidHorn
4 years ago
Reply to  Carl_R
I don’t disagree with you, but a lot of students will file for bankruptcy shortly after graduation. And if students are doing it in mass, as I suspect would happen, it won’t be much of a spot on a credit rating. Banks will view it as somewhat normal.
I think we should abolish Sallie Mae. Like I think we should abolish Fannie Mae and Freddie Mac. They both push default risk onto tax payers and encourage inflation. They were originally started under the guise of allowing blacks access to housing and higher education, but the 60s were a long time ago. I don’t think discrimination in lending is a serious issue any more.
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Carl_R
Carl_R
4 years ago
Reply to  KidHorn
And I don’t disagree with you. Some surely will file for bankruptcy, just as happened in years past. Back then, the lenders developed systems to assess the risk and reward, and I suspect they would, again.
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Carl_R
Carl_R
4 years ago
Reply to  yooj
This is it, exactly. Student loans used to be dischargeable in bankruptcy, and when they were, four things were significantly different than the things we see now:
1. Banks were reluctant to loan to students in large quantity. That meant that students would work to pay as much of their tuition as they could, and only borrow what was absolutely necessary. The fact that they were working to pay for it also meant that they put a higher value on the education, because they were aware of the full cost.
2. Students focused on educational paths that had a reasonable chance of repaying the debt. This was partly because the lender forced it, and partly because they were very conscious of the value of the money they were borrowing.
3. Colleges were forced to operate frugally, as opposed to having all-new buildings and high pay, and they put an emphasis on providing scholarships to help those in need.
4. The quality of the education was actually higher. One of the most important determinants of how much a student learns is how important it is to the student to learn. When they just sign a paper and are enrolled, it is easy to place a low value. When they work part time 20 hours a week in order to pay part of the tuition themselves, they place a higher value on learning.
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TexasTim65
TexasTim65
4 years ago
Reply to  Carl_R
100% correct. It all went downhill the minute government got involved in student loans under the pretense of helping out poor people.
It also added an unintended consequence in that with more and more kids able to go to college via loans, more and more jobs suddenly needed college degrees that never needed them before. This reinforced the need for even more kids to go to college perpetuating the cycle of loans.
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Nuddernoitall
Nuddernoitall
4 years ago
Pravda could not have said it better. Consider the four separate “crafters” of this story. 1) Data For Progress. The following is from their website statement: “What is Data for Progress? A new generation of progressives is rising — a generation unafraid to fight for what we believe in.
We are a multidisciplinary group of experts using state-of-the-art techniques in data science to support progressive activists and causes.” 2) Rise. … and here’s who they are: “The tagline of RISE – Respect. Inspire. Support. Empower. – embodies the work of RISE. We believe that RESPECT is the cornerstone to ending violence and creating peace. We strive to INSPIRE the community to be active in the movement to end gender-based violence.” 3) The Business Insider reporter is two years removed from getting her college degree. Her Insider Business beat is, “student debt and climate change issues.” 4) Business Insider. A longtime left-leaning publication ironically not business friendly and not all sourced through inside editorial contacts. SO, in other words, certainly not an unbiased piece. BUT, I will also state that politicians on the left have begun their frantic money (or gas cards, or other forms of currency) giveaways; all of course designed to win votes in November. Don’t be shocked to see Biden cancel some student loan debt to gain a vote or three.
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denker
denker
4 years ago
As far as student loan forgiveness, just another brick removed in the wall that built the country. Responsible repayment of debt. Now US a country of deadbeats, looters and parasites. Needs to be put down like a crippled horse.
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denker
denker
4 years ago
Business Insider. Can only stand to read a bit and then leave the site. Used to be even fluffier. Articles like “Where to buy the best cronut in Manhattan”. BI= NYC centric, woke and irrelevant.
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garryl44
garryl44
4 years ago
What exactly Have Dems passed?
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whirlaway
whirlaway
4 years ago
Reply to  garryl44
Precisely. This happens all the time:

1. The DONORcrats propose a right-wing legislation (like Obolacare in 2009, infrastructure bill in 2022)

2. Republicans oppose it even though it is a right-wing idea. This helps create the (bogus) left-wing vs right-wing narrative.
3. The legislation passes, with a few Republicans voting for it, mostly only if necessary.
4. People get sick of the DONORcrats and don’t turn out in large numbers for them in the subsequent elections.
5. Right-wing Republicans then claim that the DONORcrat Party lost because it “went too far left”
6. Right-wing DONORcrats embrace the idea and say, “See, this is what happens if we go too far left!”.
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TheWindowCleaner
TheWindowCleaner
4 years ago
Monetary Gifting IS THE NEW PARADIGM…that will enable actual free markets and stable free flowing economies. Virtually all free market advocates make a fetish out of free markets and are delusional about modern economies being free BECAUSE THE HUMAN CIVILIZATION LONG MONOPOLISTIC MONETARY PARADIGM OF DEBT ONLY MACRO-ECONOMICALLY QUARANTEES INSTABILITY NO MATTER WHETHER SUCH PARADIGM IS WIELDED BY THE PALACE OR THE PRIVATE BANKS.
Monetary Gifting is also what will enable the wet dreams of Rothbardian libertarian/Austrian advocates like huge personal and corporate tax cuts, the almost entire elimination of re-distributive payroll taxation, beneficial deflation and rock solid general prosperity. I know it asks a lot of people who haven’t had a new thought in life let alone in economic and monetary theory in 30-40 years, but try it, you’ll like it.
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Lisa_Hooker
Lisa_Hooker
4 years ago
Generally speaking, poor folk are usually willing to accept more free money.
Never forget – the United States has the best government money can buy.
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LM2022
LM2022
4 years ago
Reply to  Lisa_Hooker
Huh? The investor class is one of the biggest recipients of free money thanks to artificially low interest rates. Rich people do no real work but have passive investments and yet everyone wants to crap on poor people. God Bless America.
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TheWindowCleaner
TheWindowCleaner
4 years ago
Reply to  LM2022
You’re absolutely right, but light a candle instead of cursing the darkness with the new monetary paradigm of Gifting with the policies of a 50% discount/rebate at the point of retail sale and a 50% debt jubilee at the point of loan signing. Forget redistributive taxation and other leftish tropes…and of course forget the right’s tropes as well and consider the integrative solutions possible with the new monetary paradigm.
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Lisa_Hooker
Lisa_Hooker
4 years ago
Reply to  LM2022
Not crapping on anyone. Simply pointing out that poor folk are possibly the most pragmatic and pretty much are nobody’s fool.
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whirlaway
whirlaway
4 years ago
“Democrats will get trounced in November because the radical Left hijacked the party, not because Democrats failed to pass the legislation.”

Which can easily be proved wrong by noting that when they initially passed the relief bill, Biden’s popularity remained high for several months. It was only when they started running away from meaningful left-wing policies (using Manchin and Sinema as the excuse) that they started plummeting.

Let me predict another “explainer” that the right-wing will produce after the elections (and which the DONORcrats will gleefully accept), and that would be the 2022 election would have been a bigger disaster for them if they had passed legislation favoring the students, the working classes and working families. It is sure to show up on election night – like clockwork!

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