Relieving over-leveraged Americans of their student loans and consumer debt is one simple way to quickly get through the current debt pain experienced in the economy. Debt forgiveness was last tried in the 1930s at the height of the Great Depression.
The American consumer makes up 71% of the GDP, but the growth rate in the last several months has been negligible. The American consumer is going nowhere. If we don’t address student loans and consumer debt, all the public policy aimed at the fiscal and monetary stimulus is going to be pushing on a string.
Lenders are the ones who have gotten a “free ride” so far with TARP and other bailouts. They are the ones who wrote all the bad loans during the last decade. It is time to forgive student loans and consumer debt.