The Guardian, FT and others have reported this morning on a new report from the Institute for Fiscal Studies on the cost of student loans, which is another ongoing neoliberal scandal within the UK economy.
The details of the report do not matter greatly. What the IFS suggests is that because of the rise in interest rates, the government is now bound to lose money on student loans in the future. The obvious conclusion is that, yet again, we need to return to an era of near-zero interest rates because nothing else serves anyone in society so long as high taxes on wealth suck the unearned gains to those with assets back into the public realm. The IFS do not say that, of course.
That penultimate sentence. Eh?
But note what his insistence is. That we should have negative real interest rates all the time. Ignoring that money has that time value. Ho hum.
But this opened another question for me. I have been wondering whether to include student loan repayments in the Taxing Wealth Report 2024 since they are, in my opinion, a highly discriminatory tax that few with real wealth pay as the wealthy cover their offspring’s debts.
But now think about this. The report is that student loans lose the government money. Therefore they’re subsidy. But the wealthy avoid this subsidy by paying off the fees and not borrowing the money and gaining the subsidy. This is bad because – well, because the rich don’t gain the subsidy?