The idea of debt cancellation has become prominent in recent times, particularly with Democratic leaders Bernie Sanders and Elizabeth Warren. However, history shows us that this idea is not unique to the modern day. Modern times resemble ancient Athens through the effort of political leaders such as Warren, Sanders, and Solon to gain support through debt cancellation without regard for economic effect.
Solon, an ancient Athenian magistrate, introduced this idea after his election in 594 BCE. Solon made it a priority to cancel all the debt of those who were unable to pay off their land debts. It was a policy at this time that those who were unable to pay off such debts were forced into slavery. In order to remediate this, Solon elected to cancel all these debts. While he certainly gained the loyalty of the lower class through this decision, it proved to be fatal for the Athenian economy, as creditors were left uncompensated and led to anarchy shortly after his rule. Though separated by thousands of years, this event closely correlates to today’s push for cancellation of student debt. While this idea seems enticing to those suffering from student debt, particularly the lower class, it’s no surprise that this would likely lead to an economic crisis, as creditors would be left uncompensated by millions of dollars. This would certainly have a snowball effect on the economy that could negatively affect all American’s and completely alter the American economy as we know it.
Another negative impact would be the effect on the “beneficiaries” of this student loan forgiveness. While loan forgiveness would take an enormous burden off millions of students, what many do not realize is that this would hinder the value of a college degree in a substantial way. By forgiving all this debt and essentially making college free, a college degree would no longer be much of an achievement, as practically anyone would be able to graduate. This would have an incredibly negative impact on the economy, as college graduates would be much less likely to make a decent living, thus the beneficiaries of debt forgiveness would not benefit in the long run.
Overall, the idea of debt forgiveness is incredibly popular today, just as it was in Solon’s time. However, the reality is that many of those who support this idea do not understand the potential for economic crisis as a result of debt forgiveness. It is unlikely that this debt cancellation would result in anarchy such as after Solon’s debt forgiveness, but it is certain that plenty of people would be left unhappy, and the general opinion on formerly beloved politicians would certainly be altered. At the end of the day, politicians who support this idea are seemingly taking advantage of the lower class and those struggling with debt in order to gain political following and loyalty. Just as in the time of Solon, Bernie Sanders and Elizabeth Warren have gained an immense following from this debt cancellation proposal, but they have failed to recognize the potential negative impact of their idea.
- Zack Genereaux
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