It comes down to understanding “nothing is free”. Even a free meal was paid for by somebody else. It may be free to you but somebody had to pay for it.

1. The debtor will apply for “debt forgiveness” and when it is approved, the government will take the money out of my wallet and yours (in the form of taxes) to pay the holder of the loan back.
2. A less obvious way it is not free is that when the Government “spends” money on anything, they must take the money from the people the supposedly serve (the government earns no money and only has what they take in the form of taxes or what they borrow and/or print). Even the money they borrow from other nations or by selling T-bills, etc… must be repaid and the interest in it must be repaid as well. That money comes from your taxes if they can take enough from the people they supposedly serve. The money the just print with no backing is a form of a loan that simply dilutes the dollars already in circulation. (If you currently have a life savings $100,000 after working for 40 years, that money will now buy a fraction of the same thing you could have before they printed trillions of dollars. So just think of it as your 40 years of hard work and saving is now worth maybe 25 or 35 years and each time they print more, that number will continue to decrease).

But you shouldn’t feel bad about watching all your sacrifices and savings shrivel up and die; your children and grandchildren will be saddled with the debt you can never pay and will basically become slaves of the government overlords they will be forced to beg for enough food to eat.

Hope this helps explain how this will cost anything.

You will need an accountant to properly explain.

The debt owed is a “income generating asset” in the government’s books.

So the debt is like an investment into a bank, and the repayments with interest the income it generates.

By forgiving the loans, government gives up the asset and the future Income this will provide.

This reduces immediately the governments own credit rating and ability to loan more in the short term and in the long term reduces government income.

So the tax payer need to pay more tax due to decrease in credit score and hence more expensive loans, then pay to make up for the loss of future income (the actual repayments).

My understanding on most student loans the student borrows money to pay the school, the lenders are promised their money back plus interest and if the student fails to make their payments the government has promised to make the lender whole. If the school were to forgive the loan and repay the lender what they were owed I would be in full support. But the government can’t repay the loan, they produce no income. If the debt is just “forgiven” by the government the lenders are being robbed because they lent the money to the students at a cost. If the government repays the lender then the taxpayers are being robbed because the government doesn’t produce or earn money.

In theory if you cancelled all debt the banks would still have the money held in reserve to make loans. You would then have the interest and reserve system multiplying effect to add to the money supply. In this case since the money was not lent directly from the Federal Reserve the government will have to pay the debt to the banks. The banks will then loan that money and it will get multiplied increasing demand and inflation.

The supply and demand theory of too to much money supply chasing too few goods is an over simplification. Devaluation of a currency happens independent of the market if the government chooses to devalue it to lower it's debt. Real wealth measured in goods and services cannot react fast enough to devaluation meaning the real price of goods and services are reduced relative to debt. With inflation the government then gets a greater share of goods and services. That is why they talk about real wages verses monetary wages.

Borrowing money and investing in tangible wealth at the onset of high inflation is a good strategy but only if the value of those assets don't fall. Natural resources are some what immune from low relative wages for example. Housing could be but as the subprime crash showed that is only if demand is stable. Farmland could be a good investment but the government now is too heavily involved in crop prices.

"If the party to whom a debt it owed writes off the debt, isn't that the removal of "x" money from the existing money supply?"

It is unclear to me will the debt be simply "erased" or will the Biden go to FED and tell ti to mouse click for him billions which he can give to those that gave the loans and keep 10% for the big guy. Its unclear which of the two was the plan, but I suspect the second scenario is likely. They won't pass up the opportunity to launder some money for themselves. Its too easy.

"I don't think the Biden student loan forgiveness thing will actually happen, but if it does, how does it have a "cost" beyond increasing the cost of college and college loans going forward?"

The real cost off course is the break down of trust in a system that is already not very trusted. Once the trust is gone, many things are gone. As for the dollar sum, that really does not matter at this point, does it? And that is the real cost, because the dollar value is only matter of trust now.

"If forgiving a debt is actually just paying the debt by transforming the location of the debtor, is there a loan forgiven?"

As I've mentioned in my first reply, that part is not clear to me either? Someone else asked this, but I don't really know. Not sure many know. We can only assume they won't pass up on the opertunity to print bunch of money, give it to those that gave out the loans and keep percentage for themselves. 10% to big guy. Always 10% to big guy. Its how these people operate, so I assume that is how they imagine it would go down.

But as you said, question is can they do it. Some say the legal angle is declare perpetual emergency for whatever reason, use emergency powers to rule by decree and short circuit any do process or checks and balances. They have done this since 2020 at least and they cut in anyone they can on the deal to keep the scam going.

The only thing really that prevented them from going full Nero or Caligula mode is public backlash. But forget any kind of restrain other than that. This is banana republic territory.

I think one class of loans (there is more than one) has the Uni handing the bill to the student and then setting up a loan -- where the student promises to pay off the loan. And, the US gov'mt backs this type of loan in the event the student renegs/defaults. So, the Uni is owed the $$.
I think BeijingBiden is gonna say that for a load of potential votes he will back up a default of $10-20K. So, the US taxpayer picks up the tab. Now, what I've heard these otherwise rich students whing on about (many are from very wealthy families) is that they have loans of >$50K. So, it sounds like BBiden is counting on buying a vote for only a small amount of the initial loan.

I like TimPool's suggestion from this morning. Disqualify all interest (that is what causes an initially modest loan to bloat). If you have already paid some interest that is now translated to either a direct payment of principle or a tax credit to use for years. Any of the principle left is yours to deal with, no forgiveness.