• Biden’s student debt forgiveness plan sends powerful but dangerous messages
  • A culture prioritizing instant gratification and shirked financial obligations is doomed to fail
  • Free societies promote more virtuous and sustainable values that lead to greater prosperity

Don’t save, borrow. Spend now. Don’t delay gratification or work toward a goal. Satisfy your desires now. Force others to assume responsibility for your financial obligations.

These are all messages being sent by Pres. Joe Biden’s student loan “forgiveness” plan.

Of course, none of that debt magically disappears, but it is shifted onto others and away from the actual borrowers.

Biden’s announcement that the federal government will be “forgiving” up to $20,000 of student loans for qualifying individuals was a big slap in the face to those that paid their way through college through work and savings, along with those who made sacrifices to pay back their college debt, not to mention those who went straight into the workforce and never attended college.

It’s a morally indefensible vote-buying scheme.

Many people must be feeling like Joe Biden played them for suckers right now.

Imagine people who sacrificed for years, setting aside a little bit every month, so that they could send their child to college. Or those students who worked two or three jobs throughout college to pay their tuition, not to mention those who took on extra hours and sacrificed material comforts after college so that they could pay off their loans.

Many of them must be feeling like Joe Biden played them for suckers right now.

The message millions of Americans are receiving is loud and clear: others will take care of your financial obligations and you’re a fool to delay gratification to save up to pay for something you desire.

But what happens to a society organized by the principle of instant gratification and shirked financial responsibility?


A preference for instant gratification — or a high time preference, as economists call it — leads to tragic consequences both on an individual basis and for society. The old Aesop fable of the ants and the grasshopper sheds light on this. The grasshopper spends all summer playing while the ants labor to store up grain for the winter. While the grasshopper had the more enjoyable summer, needless to say his winter is less enjoyable than the ants’, who live to see another spring.

Research supports what common sense should tell you. Namely, societies with lower time preference (i.e., more patience and willingness to sacrifice present happiness for future, greater happiness) will thrive far more than those that are less future-oriented. Investing in productivity-enhancing capital goods, rather than consuming all of society’s resources on present satisfactions, leads to far more prosperous and wealthy societies.

Biden’s student loan “forgiveness” measure, however, sends the opposite message. Why save up to pay for college when the political class will force taxpayers to bail you out? The younger generation will grow up learning that the way to go is to spend now, rack up debt, and let others deal with the consequences.

And the student loan plan is far from the only irresponsible message being sent by government. The national debt now tops $30 trillion — a debt racked up by short-sighted politicians with very high time preferences, concerned only about winning the next election, future consequences be damned.

Moreover, the Federal Reserve’s longstanding easy money policies keep interest rates artificially low and generate price inflation. Such policies condition behavior by punishing savers whose savings earn no interest and actually lose value over time, while encouraging more borrowing of cheap credit that can be repaid later with devalued dollars. Over time, people receive the “don’t save for the future, borrow and spend now” message loud and clear.

A culture that values instant gratification and devalues future-oriented savings and investment will meet the same fate as the grasshopper.

Similarly, the concept of shifting financial responsibility creates tragic consequences. As Frederic Bastiat once wrote, “The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else.”

With student loan forgiveness and so many other government programs, people are conditioned to believe that an entity known as “government” is financially responsible for them. Far too few stop to recognize that the government has no resources of its own and that their burden is being shifted onto their neighbors. As Bastiat wrote, “it is a well-established fact that the state cannot procure satisfaction for some without adding to the labor of others.”

Conditioning society to believe that others are responsible for your financial obligations and burdens can also spell disaster. Why work when others will pay your bills and debts? It’s easy to see that if this mindset becomes sufficiently widespread, output will dwindle to the point where society will be unable to feed itself.

Conversely, a free society — in which individuals bear their own financial responsibilities, helping those in need is done voluntarily, and saving is prudent rather than punished by the central bank’s artificial devaluing of the currency — promotes more virtuous and sustainable values that generate greater prosperity and social cohesion.

Biden’s student debt “forgiveness” plan may be celebrated by those on the receiving end, and time will tell if it provides a political boost to his party in the coming midterms. But its message of instant gratification and irresponsibility can bring even the strongest of societies to a disastrous end.