Economist Nassim Nicholas Taleb, author of the bestselling book "The Black Swan" that deals with the extreme impact of rare events, has criticized President Joe Biden's student loan debt forgiveness plan.
Under Biden’s sweeping forgiveness plan, taxpayers will absorb up to $10,000 in outstanding student debt for individual borrowers earning less than $125,000 per year or $250,000 for married joint filers.
Republicans have panned the debt wipeout as unfair to people who sacrificed to pay off their student loans or never racked them up in the first place but now have to foot the bill for other people’s debts.
“This policy is astonishingly unfair,” McConnell added.
Taleb did not weigh in on the fairness of the forgiveness scheme itself but aimed his criticism chiefly on the U.S. education industry.
"If a U.S. college degree appears to be useless, it is by design," he said, arguing that liberal arts degrees amount to "training for upper class free men (liber) who were above having a profession."
Vocational and professional schools, on the other hand, are meant to prepare people to take on jobs that pay money, he added.
Taleb's remarks that universities—rather than taxpayers—should bear the cost of the student debt jubilee dovetails with the view that it's unfair for America's working class taxpayers who didn't go to college to have to pay for the student loans of those who racked up debt for advanced degrees that have proven of little value on the job market.
It's a view McConnell echoed in his statement, in which he said that “experts who studied similar past proposals found that the overwhelming benefit of student loan socialism flows to higher-earning Americans.”
The Penn Wharton Budget Model confirms the Biden administration's position that none of the benefit will go to the top 5 percent.
However, the Penn model also estimates that between 69 percent and 72 percent of the forgiven debt accrues to borrowers in the top 60 percent of the income distribution.