Debt Cancellation will come whether we like it or not. So it’s in everyone’s interest to develop a sensible plan that liberates the (mostly) innocent and assigns responsibility where appropriate.

There are certain moments in history where each person—and eventually the larger community—must decide which path to follow, ultimately leading us in vastly different directions. With the U.S. student debt fiasco now approaching $1.6 trillion and 45 million borrowers, we seem to be rapidly advancing towards such a moment.

At present, one of the biggest problems regarding the student loan debacle is the dismal nature of the polarized “debate.” Not just on debt relief, but on the many dysfunctions of the college system and its financing mechanisms as well.

On one side, we have free-lunch Democrats that want to “give” everything away in order to buy votes and seize control of higher education; their Debt Forgiveness schemes merely dump liabilities onto taxpayers and give banks and colleges a free pass. Republicans and conservatives, meanwhile, prefer to lecture students on the morality of paying your bills, while forgetting that students didn’t create the corrupt system of mandatory college or its skyrocketing costs. That came from “responsible” adults. And both sides insist that federal involvement in all levels of learning is essential.

Since Debt Cancellation is one of those explosive topics that can lead to partisan bickering and empty sloganeering, I should start by saying that I disagree with nearly everything that BOTH official sides are saying. After much searching, I was able to find a few sensible voices in the wilderness as detailed and expanded upon later. But at this point, anything rational or productive on this issue remains strictly forbidden in the mainstream press, which strongly favors centralized banking and collective education, preferably sold in easily digestible sound-bites.

Taking a broader approach to this looming decision, the major themes of this essay are:

• Weak Arguments against Debt Cancellation from the ‘Right’


• Weak Arguments for Debt Cancellation and ‘Free’ College from the ‘Left’


• Winners and Losers of Honest Debt Forgiveness

I’ll try to fill in some related gaps along the way, mainly to address entrenched ideologies on overall education and financing.

My conclusions are: 1) people can learn quite well without federal involvement and the suffocating strings attached, 2) after over a century of massive (over 2,000%) inflationary stresses, Americans could benefit from an overdue Inflation Dividend, and 3) student Debt Cancellation will come whether we like it or not, so it’s in everyone’s interest to develop a sensible debt re-structuring plan that liberates the (mostly) innocent and assigns responsibility where appropriate. As for culpability, I’m talking about banks and colleges, not taxpayers.

For demographics, I don’t mind saying that I turned 50 this year and never had any debt from college when I graduated in 1991, back when state school in New York was pretty cheap. I work in the private sector and find time to research and write on the side, among other things.

Washington Orthodoxy: Education Must Be Centrally Controlled

With “education” becoming increasingly politicized over the last century, it’s hard to find valuable information through the haze of overt and subtle misinformation. As usual, if you follow the money it leads back to a common theme. Total government spending for combined federal, state and local levels (K through college) came to a staggering $1.1 trillion for FY2019. That enormous pot of “free” gold comes with heavy strings attached and influences nearly all modern decisions on the topic of learning.

First of all, both parties in Washington and at the State capitols almost unanimously view individual learning as a group decision. Proceeding from that bias, public schools in America have become burdened with licensing restrictions, teacher credentials and accreditation requirements to justify accessing their “fair” share of public funds.

Those self-focused legalities have led to an inward emphasis among academics over time. For generations, there has been widespread agreement amongst ruling elites of all political persuasions: kids learn better in awe-inspiring fortresses of grand architectural triumph.

All of these accessories add enormous costs to taxpayers and stifle any meaningful academic freedom. None of those gimmicks have been shown to add value to actual education, since literacy rates were generally higher (and delinquency rates were far lower) 200 years ago when almost no one in the U.S. went to college. Modern education at the college level has become so corrupted with authoritarian ideology that two separate organizations (The College Fix and Campus Reform) are kept busy documenting the daily abuses.

The university system in particular—since its State-fueled rise in the 12^th century—has always been about politically and theologically correct lectures, assigning safe books (from the ruling class point of view) and testing on recited orthodoxy. Remarkably little has changed to that ultra-conservative structure, which made more sense before the invention of the Printing Press (c. 1450), when hand-written manuscripts were rare and knowledge was centralized among political and religious elites.

The main difference today is the widespread acceptance of university-style “indoctrination” methods (a term our ancestors openly accepted) across such a wide segment of society. College no longer exists as an exclusive retreat for the idle rich, aspiring politicians and the clergy. A solid core of the middle-class now views obtaining a college “degree”—at any cost—as an important milestone in life.

As a result of its new-found popularity, the university model’s inherent shortcomings have become magnified. Longstanding concepts of dialogue and creative problem solving have been pushed aside for mass-market approaches that rely heavily on the weakest forms of teaching (one-way books and lectures). These formats invite all sorts of political correctness and appeasement of special interest groups, as evidenced by the increasingly weaponized schooling for Capitol-style awareness.

A better alternative has always been available, if people were willing to work for it. This once commonly did (and may soon again) involve community schooling for basic math and English, self-study or private clubs (aided by independent scholars where appropriate) for the liberal arts and sciences, then more mentoring and apprenticeships for professional skills (as doctors still do). These efficient, social and personalized teaching methods were crowed out over the last century from the mad rush for outside funding and superficial credentials. Mentoring and apprenticeships seem poised to make a comeback now, due to the high cost and low quality of college and the online availability of educational courses on virtually every topic.

Community schooling for K-12 is now making a resurgence as well at the grass roots level, although it’s rarely recognized as such. This positive development comes from the millions of families involved in more personalized education—often referred to as “home schooling”—which increasingly occurs in group settings with paid teachers or via co-operative bartering. Locally funded Community Colleges now attract far more students than even a generation ago. These schools are not just less expensive than their four-year counterparts; Community Colleges usually skip the exhausting “Publish or Perish” mania for boosting academic pedigree and pass on federal research Grants that do nothing to improve student achievement.

The last frontier is the privileged and isolated confines of the state and federally funded four-year college and university system, which has been resisting change for pretty much all of its existence. With the help of technology, institutional barriers may finally yield to progress. Students can now access thousands of more independent scholars at online providers such as Khan Academy, Udemy, EdX, and Coursera to help fill the need for advanced training or merely satisfy the pleasure of learning.

For the first time in decades, teacher competency matters more than artificial titles—precisely because students finally have real input in the selection process and teachers face fewer obstacles in reaching interested students. At least it does for untethered experts found on the internet, which includes some of the better Old Guard college professors, and at multitudes of privately administered classes.

These are all good developments that get little or no credit in Legacy Media. My point in mentioning the condensed history above is to dispel the myth that people can’t be educated without “help” from the federal government. That’s a lie that has gone unchallenged for far too long.

For the rest of this piece, I’ll give it my best shot at combatting the bi-partisan misinformation on student Debt Cancellation and providing reasonable arguments for true Debt Forgiveness.

Weak Arguments against Debt Cancellation from the ‘Right’

Under normal circumstances, the advice to “pay your bills” and not go into debt in the first place makes great sense. So does the advice to work… most of the time.

What so many conservatives forget is that no sane person works 7 days a week. Human beings need rest every so often (and afternoon naps are highly beneficial according to my personal research). When a corrupt financial system has been foisted on Americans of all ages and economic levels for generations, people need a break and society needs a chance to reset and stabilize.

Right-wing partisans don’t see it that way, when it comes to young people saddled with liabilities from ridiculously high college costs. All they see are lazy kids trying to slack off again, which is of course sometimes true. Professional conservatives also relish the chance to pummel career Democrats for being soft on the “crime” of not paying your debts. British debtors’ prisons followed this logic throughout most of the 18^th and 19^th centuries, imprisoning thousands of people for the offense of not repaying an ill-considered loan from a wealthy lender.

Over the last year or so, I’ve collected some examples from the leading thinkers on the libertarian right on the topic of Debt Forgiveness. Mind you, the screaming rants of AM talk radio and FoxNews are infinitely worse. And neo-con puppets were ignored due to their track record of irrelevance. These “thought leaders” offer the best conservative arguments I can find.

Economist and author Doug Casey abandons his usual calm analysis and offers petty insults on the “whacky” and “evil” Democratic Party “freak show” pushing for pseudo Debt Forgiveness. Mr. Casey says “Forgiving student loans would be disastrous. First of all because it would encourage more kids to go to college.” He gives no support for these illogical statements, which I address in more detail below. His angry taunts of people with student loans is classic conservative compassion: kids in debt “want somebody else to pay the consequences. I say, Tough! It’s now time to pay the piper.” Like many, Mr. Casey confuses Debt Forgiveness (resulting in far fewer loans available for future students, meaning kids will finally have to PAY for themselves) with “free college.” Those are two completely different entities, although politicians often lump them together.

An even weaker analysis of Debt Forgiveness comes from another normally good economics expert (quoted favorably much later), Martin Armstrong of Armstrong Economics. Writing about debt options in general, he states:

We either default, which will result in civil war and revolution, or you inflate your way out like Venezuela so your Social Security check will not even buy a cup of coffee. A default will result in war.

As institutional investors, both gentlemen above may have some exposure to Debt Cancellation that they neglected to mention (or at minimum, should have clarified). Ditto for this hysterical analysis from a flack working for billionaire media mogul and financier Michael Bloomberg. And for full disclosure, I’ve done some volunteer work on setting up a non-degreed professional mentoring system. If all goes well, that endeavor may actually earn money someday. If not, no big deal; I’ve got a job outside of the educational field.

Popular conservative writer Matt Walsh (like many others) settles on the classic liberal argument: it’s not fair for indebted students to get a break since so many others did not. Mr. Walsh augments his position with the claim that “it costs almost five billion dollars to operate Harvard for one year” based on a questionable analysis (his link) from Harvard. Who knew all those dusty books and opinionated philosophers cost so much?

Rounding out the attacks from the right, a libertarian critic of Debt Forgiveness and former college finance professor, Michael Rozeff, at least gets it correct on who would pay the bills under the leading Democrat proposals:

Some of our home-grown socialists/communists (like Sanders and Warren) want taxpayers to assume the debts of students. … All their proposals are outrageous. All are undiluted communism. All are unfair in the extreme. All make a mockery of contracts.

The sacred “contract” than many pro-business conservatives and libertarians talk about is not always what they make it out to be. Any written contract becomes a dead piece of paper (kind of like our Constitution) when powerful special interests poison the system for so long that words (like “education”) no longer have meaning, our fiat currency (see Roosevelt and Nixon) is nearly worthless, and true cost discovery becomes almost impossible.

We also need to factor in the mandatory licensing and degree requirements of many professions and the corporate Human Resources policies requiring college just to get an interview. Then it becomes apparent that quite a bit of coercion comes into play for a high school grad “deciding” what to do next. The act of coercion generally negates the legitimacy of any contract. When students are essentially FORCED to obtain a “degree” to get a professional job and college costs have skyrocketed due to corrupting subsidies and entitlements for decades… the students are actually the LAST ones we should blame.

Yes, many college undergraduates have been brainwashed by radical (and subsidized) professors to believe that everything should be “free.” The free-stuff ideology promoted by some tenured fanatics promotes their belief that all aspects of life should be centrally managed by remote officials and financed by voiceless serfs. But again, students didn’t create that warped mindset. College administrators, bank executives, financial counselors—like the 28,000 loan advisors at the National Association of Student Financial Aid Administrators (NASFAA)—and two D.C. parties full of pliant politicians did.

In the end, who’s the bigger fool? The inexperienced student who took on a loan they now can’t pay off, or the adult lender who offered unsecured credit to a young “slacker” in the first place? For now, most conservatives seem to side with wealthy bankers and college administrators.

Weak Arguments for Debt Cancellation and ‘Free’ College from the ‘Left’

On the other side, we have liberals and progressives who ostensibly favor some type of student Debt Cancellation. The biggest problem here is that all of their leading proposals are just bait-and-switch cover for another bailout of Wall Street banks, while funneling more taxpayer money to feckless college administrators. The associated rush to keep student “aid” flowing also obscures the overt politicization of schools already underway, which would only get worse under a system of full government control—sold as “free” education.

The fraudulence of these Debt Forgiveness schemes should be laid bare by the internal contradictions and “free lunch” mentality surrounding the plans. Before touching on the broader picture of bi-partisan support for academic control, I’ll look at the main two Debt Forgiveness proposals of the 2020 Democrat presidential frontrunners, U.S. Senators Elizabeth Warren and Bernie Sanders (with links provided to their respective plans).

According to numerous favorable press accounts (like this one which was featured in Microsoft News) “Warren estimates her plan would cost $1.25 trillion over 10 years, and Sanders says his plan would cost $2.2 trillion.” “In addition, they demanded the government make public college free.”

Bank Bailouts Posing as Debt Forgiveness

For starters, it should be apparent to any thinking reader (or competent journalist) that true Debt Forgiveness should cost almost nothing. Maybe a few million for administrative costs and the obligatory public ceremonies. But nowhere near the staggering sums of cash—and new taxes—that Warren and Sanders are seeking.

These plans amount to nothing more than another taxpayer bailout of big banks, that Democrat supporters of student debt relief plans usually fail to acknowledge. Worse yet, the bailouts would come on the backs of people who responsibly payed off their own college loans or maybe never attended college at all.

Unfortunately, it’s this type of duplicity from the left that has so many conservatives and independents disgusted with the overall concept of student Debt Cancellation. Throwing in “free” college for everyone just sinks the plans entirely in many people’s minds.

Government Advertising for More Government Schooling

The structural flaws beneath the demands for political bailouts also warrant consideration. The college and university system in America has grown to become one of our biggest industries, bringing in nearly $650 billion in revenue for the latest school year available (Fall 2016 to Spring 2017). For comparison, the total U.S. automotive industry revenue stood at $752 billion for 2018.

As detailed below, over 80% of college and university revenue now comes from outside loans, grants and direct government spending. That makes the college books-buildings-and-lectures circuit probably the most subsidized industry in America, next to the federal military.

With so much money and prestige on the line, the college and university industry spends billions to attract students into their system each year and to entice politicians to keep funding it. The U.S. Department of Education (U.S. DoE) uses tax dollars to elicit more taxpayer support for what they frequently spin as “aid” or “assistance.” The College Board (2017 report on the right) is a tax-favored organization that has been steering kids towards the university system since 1900. The College Board uses similar jargon to market the “benefits” of debt-fueled classroom instruction to prospective customers.

The U.S. DoE office that produced the 2016 Federal Student Aid report on the left has an administrative budget of $1.6 billion with almost 1,400 employees. The agency boasts of delivering “nearly $125.7 billion in [federal] aid to more than 13 million students attending over 6,000 postsecondary educational institutions” for that year.

Other common advertising tactics among the thousands of money-making colleges include images of sprawling campuses with grand buildings, action photos of semi-professional (but unpaid) sports figures, and smiling youths adorned in flowing graduation robes clutching their “degree.” The multi-billion-dollar college and university advertising blitz mainly plays up superficial distractions that have nothing to do with the quality of education. And this has been going on for decades, as college costs and student debt keep rising.

Since college was essentially federalized in 1944 from the Army G.I. Bill and subsequent legislation, schools have gone on a non-stop spending binge for enormous sports stadiums, medieval- and renaissance-style architectural displays, and posh facilities and other luxuries for students and faculty. Of course, none of this adds any detectable improvement on learning. It does, however, boost the prestige of college administrators and wealthy alumni, who may get additional titles or a building named after them, respectively.

From a cursory overview, it would seem that the government and non-profit sectors have issued at least as much or possibly more false marketing to keep students trapped in debt than their much smaller for-profit college counterparts, who brought in only $16 billion of the $649 billion annual haul for U.S. colleges and universities. In other words, the too-pure-for-profit schools reap fully 97.5% of the total college and university income stream.

But in the political world, it’s only the smaller, more modest “for-profit” schools that feel the sting of judgment. These schools largely operate beyond the control of state and federal bureaucracies, which angers some politicians. During the Obama Administration’s crack down on private for-profit schools—the meager 2.5% of the college revenue pie—managers at Corinthian College (once with over 100 campuses) and ITT Technical Institute (formerly with about 130 campuses) were investigated, vilified and drummed out of business over vague charges of wrongdoing.

Based on my review of over a dozen contemporary press accounts, the only decent reporting I could find came from Taki’s magazine, who came to the defense of ITT Tech. On the other extreme, then-Attorney General of California, Kamala Harris’s scorched-earth campaign against Corinthian College that threw thousands of students to the curb included grandstanding that the school used “aggressive and persistent internet and telemarketing campaigns… on daytime shows like Jerry Springer and Maury Povich.” Other than that, no attempt was made to put allegations (even if correct) in context with known academic fraud and financial abuses committed routinely at governmental and non-profit schools.

Really Free Teaching vs. Paid ‘Free’ Teaching

One half-truth that liberals keep repeating stems from their desire for everything to be controlled by the State and “free” to passive participants. The smidge of truth lies in the practical case for free teaching as opposed to free schooling. There is a difference.

For basic math and English instruction as well as vocational skills, science and mentoring, I can certainly see the value in using paid instructors. But within the subjective genre of liberal arts, I can see a strong argument for relying primarily on bi-vocational teachers. That is, people who actually have some experience working in the marketplace, then teaching from a voluntary or minimally paid standpoint as governed by peers, students and non-coercive standards. Tens of thousands of free internet bloggers and writers and even greater numbers of religiously motivated volunteers do precisely that, teaching important lessons on history, philosophy, theology, economics, politics and other topics of personal enlightenment.

The alternative approach of promoting tenured liberal arts professionals gave us the anti-social PC rot we face today (and also Harvard alumni’s leading role in the Salem witch trials, which they’d rather deflect). Anti-profit extremists—common at government schools, non-profit institutions and many subsidized churches—often fail to realize the importance of “serving” in the marketplace, where consumers have the free choice to buy their products or services, due to high quality and a fair price. It’s axiomatic but rarely acknowledged that people who refuse to serve in the marketplace resign themselves to a life of asking for charity, with an implicit arrangement so as to never risk irritating their benefactors (ultimately, the ruling authorities; with considerable pandering to their supporters).

So I welcome any liberal arts professors who want to teach for free. Getting paid means it isn’t free. No one needs political permission to teach for free. A college professor should understand that.

More ‘Liberal’ Smoke and Mirrors

The willful misinformation doesn’t stop with bogus claims of “free” teaching, cheesy college advertising and occasional made-for-TV show trials, like we observed with Corinthian, ITT Tech, and most recently The People vs. Felicity Huffman. Organized special interests (probably banks and/or colleges) have even paid for a “study” that promises all sorts of positive outcomes if we “cancel” student debt, so to speak. The Levy Institute of Bard College and the Sanders Institute (headed by Bernie’s wife Jane Sanders) jointly released a report called “The Macroeconomic Effects of Student Debt Cancellation.”

There’s nothing in the Levy/Sanders report to indicate these would be bank bailouts or that financial institutions would benefit in any way. Only the brief use of cryptic language (“federally funded”) offers a hint that the enormous debt “cancellation” costs will be dumped on taxpayers. Welcome to Non-profit Ethics 101.

The Levy/Sanders pseudo-study claims a transfer of wealth from working Americans to Wall Street lenders will somehow boost the GDP by $86 to $108 billion and create 1.2 to 1.5 million new jobs per year. Who knew that bailing out super-rich bankers was so economically stimulating?

This type of academic artistry provides talking points for pro-college, pro-banking, pro-taxing politicians. And partisans in mass media gobbled it up. Still, it would be interesting to see if any independent economists could confirm or refute any of those figures, with more upfront declarations of input assumptions.

What does the ‘Liberal’ Media Say about Debt Forgiveness?

To see what the respectable left has to say, I searched on the topic of “Debt Forgiveness” plus various liberal/progressive news outlets such as Slate, HuffPost, Mother Jones, and The Nation (2011 and 2015). The results were mostly uninspiring.

Common themes included complaining that Debt Forgiveness favors “the rich,” bashing “shady” or “dodgy” for-profit schools and insisting even the most generous Debt Cancellation plan “does not go far enough.” Neo-liberals seem to agree that education should be tightly controlled by the federal government, forcibly financed by the masses and offered “free” to passive participants as a charade to justify political meddling.

One puzzling attribute of most “liberal” voices I could find was a conspicuous reluctance to criticize the corrupt and highly profitable banking cartel that helped create the debt fiasco in the first place. Perhaps this is a sign that neo-libs have come to appreciate fiat currency and all the wonderful programs it can finance. A rare exception to this trend was veteran journalist William Greider’s 2011 article in The Nation, which bracingly refers to “the barbaric and suffocating behavior of the nation’s largest banks” (and lots more like that) when talking about housing debt. He even cites the example of the ancient Hebrew society’s debt jubilee, among many other things. Although Mr. Greider managed to write over 20 pages on debt and banking without once mentioning the gold standard or fractional-reserve financing, it was nice to see that one liberal can still criticize the U.S. financial system in fairly straight language.

To that extent, it was also odd to see so many “libertarian” critics of centralized banking line up with Wall Street for wanting to keep soaking students with interest payments on loans that banks largely pulled from thin air. Apparently, libertarians dislike the theory of fractional-reserve loan sharking, but can accept $1.6 trillion of that stuff in practice.

Since the concept of Debt Forgiveness resonates loudly with the 45 million Americans straddled with college loans to pay off, Democrats seem to be winning this argument at the moment. Half of a plan (plus Wall Street appeasement) usually beats no plan at all. With the Republicans busy whining about “social justice warriors” and Millennial “cupcakes,” Democrats are making inroads with millions of voters who intensely want a better deal.

A Few Rational Voices in the Marketplace

Despite the dearth of quality analysis among most elements of our mass media, a few bright spots did stick out. Searching around, I could find a few sensible thoughts expressed on the general topic of student debt. A 2015 Forbes article suggested that “The dysfunctional federal student aid programs need radical downsizing and ultimate elimination. Universities need to have ‘skin in the game,’ sharing in taxpayer losses from excessive loan defaults.” Those are good points, but the piece otherwise avoids the overall topic of Debt Forgiveness.

Hedge fund manager James Rickards made more explicit arguments in favor of Debt Forgiveness in a 2012 article in U.S. New & World Report. Mr. Rickards says: “Even on moral grounds, it seems difficult to put the entire burden of adjustment on the debtor. For every imprudent debtor there is an overzealous and reckless lender.”

He adds the historical basis for Debt Forgiveness, which so many traditional conservatives (and God-hating liberals) seem to be overlooking:

The Bible’s book of Leviticus provides that every 50 years all mortgage debt is to be forgiven. This occurrence was called the Jubilee Year. This may seem like a shocking imposition on creditors and a free ride for debtors. Yet, consider the behavioral feedback loops. In the 10th year after the last Jubilee, lenders might lend freely for a 20-year term. By the 45th year it seems likely that long-term credit would have dried up because the lenders were as aware of the coming Jubilee as the debtors. This was a self-regulating system that deleveraged itself before credit bubbles grew out of control and threatened a widespread collapse. It was an orderly deleveraging that seems enlightened in comparison with the disorderly and draconian deleveraging our economy is experiencing today.

I couldn’t agree more. The self-regulating economy of orderly deleveraging should be greatly preferred by anyone wishing to avoid the chaos of hyper-inflation or uncontrolled debt implosion that would likely bring on a widespread collapse if left unchecked.

For those wishing to dive deeper into the history of Debt Cancellation, two scholarly books have been written on the topic in the past decade. The most recent is economist and historian Michael Hudson’s 2018 book …and forgive them their debts: Lending, Foreclosure and Redemption From Bronze Age Finance to the Jubilee Year. The other volume is anthropologist David Graeber’s 2011 book Debt: The First 5,000 Years.

I have only done some related digging on a recent interview with Mr. Hudson and skimmed Mr. Graeber’s book’s Wikipedia page. With the exception of James Rickards’ excellent but short article on Debt Cancellation, either book would almost certainly have to surpass the partisan drivel exhibited in the dozen or so articles cited above. With or without those authors’ insights, the topic of real Debt Forgiveness deserves a more candid explanation than what our politicians and news media have offered so far.

Winners and Losers of Honest Debt Forgiveness

When considering the challenges of the massive and rising $1,600 billion mountain of student debt, it’s important to keep straight what’s really going on. Democrat proposals to “wipe out” college debt only transfer the burden to other innocent parties. That is both “unfair” in any ethical evaluation and terrible economics as well, guaranteeing that college costs will continue to soar at other people’s expense. Republican willingness to appease wealthy bankers and rich colleges by keeping kids languishing in debt isn’t any better.

An inescapable consequence to any responsible Debt Forgiveness plan is that someone will have to pay. As Michael Hudson says: “You can’t bail out the banks, leave the debts in place, and rescue the economy. It’s a zero-sum game. Somebody has to lose.”

Many politicians want to penalize some version of “the rich,” which usually ends up meaning middle-class taxpayers. Another option would be to let the ones who created this mess (banks and colleges) bear the brunt of any solution. There is simply no “win-win” scenario where everyone goes home happy.

The anti-government fantasy that “doing nothing” will yield to marketplace magnificence is a farce to begin with, because nothing about subsidized college or centralized banking resembles natural market conditions. Any “do nothing” approach fails to realize that the kids trapped in debt aren’t going to stay quiet, keep paying their bills or even stick around forever. In other words, it’s in everyone’s interest to pursue a rational path of organized debt re-structuring. The sooner the better. The only alternative is a more random, spontaneous debt implosion and over-reaction (remember the New Deal?) that could be catastrophic.

For the remainder of this essay, I’ll focus on how Debt Cancellation would affect the banking industry and the college system, along with impacts to future and former students. Since centralized banking and subsidized colleges are two of the most influential, harmful and overrated institutions in America, I’ll include some general background for both sectors (that mainstream media tends to oversimplify).

Of course, we can feel sympathy for the millions of workers caught in the buzz saws of centralized finance and socialized education. In both cases, absentee “leaders” cause the real trouble while low-level support staff get paid to go through the motions.

Banks: America’s politically entrenched banking industry fears and loathes the idea of a true Debt Cancellation with an intensity that is hard to overstate. Their concern seems to be commensurate with the injuries they’ve caused to society. To this end, financial institutions are almost certainly behind the current funding of phony Debt Forgiveness (bank bailout) schemes to go along with their purchased loyalty of nearly every politician in Washington.

A good summation on the improprieties of centralized banking in general and the Federal Reserve in specific comes from former Congressmen and Regan-era OMB Director, David Stockman:

The Fed is the number one, the number two, and the number three enemy of prosperity, capitalism, free markets, individual liberty, and the wealth of people in the world today. Central banks have to be totally discredited and taken down.

Martin Armstrong’s economics website adds “the central banks are TRAPPED!!!!! People have NO IDEA what we face.” (bold, CAPS and punctuation in original)

So why do some folks (including me) have such a dim view of centralized finance? Since 1913, the Federal Reserve has successfully chiseled away over 95% of the value of the dollar, with all of the extracted worth going into the pockets of rich bankers who are always first in line at the Fed’s liquidity hydrant. To the average consumer, this means what would have cost a nickel in 1913 now costs over a dollar. And someone who saved a dollar back in 1913, if they were still alive today, would have under 5 cents of equivalent purchasing power. That’s our Fed!

And they’ve got some big customers to satisfy. The top four banks in the county (J.P. Morgan Chase, Bank of America, Wells Fargo, Citigroup) had combined revenues of $440 billion in 2018. Some of this money was earned by processing payments from retailers, making U.S. consumer spending all the more fluid. Some of the money comes from speculating on stocks and real estate, whose prices are inflated by the Fed’s easy-money policies. But most of it comes from the alchemy of turning a $10 deposit into a $100 loan (so-called fractional-reserve banking). The legal counterfeiting of the 90% empty “banks” in America involves corporate officers issuing their own virtual loans backed by a dime to the dollar, soaking in the long-term interest payments, then thrusting out their hands at the Fed Funds window for cheap credit to mop up the carnage when the system “corrects” itself every decade or so.

It’s like reeling in a giant tuna: pull back with all your might, then lu