Like some sort of big-daddy dictator, Rep. Ilhan Omar has vowed to make all student debt vanish with the wave of a hand. With all the certainty of a two-year-old, she says that it's 'simple': 

According to the Grabien transcript of Omar's latest appearance on BET:

RYE: “You have introduced debt cancellation legislation you have a very young district in Minnesota you’ve talked about the importance of you of this issue to you personally talk about some of the pillars of this particular legislation and how it work.”

OMAR: “Yeah and as someone who’s part of the debt generation I wanted to make sure that we were creating a proposal that would alleviate the kind of stress that people are dealing with. So what we’re proposing is a simple cancellation of all debt public and private. So a simple cancellation of the one point six trillion dollars. And the way that we will pay for it you know in the next ten years is to add a small financial transaction to speculators and Wall Street. We believe that we had the opportunity to bail out Wall Street and now Wall Street gets the opportunity to bail out the American people.”

(Applause)

OMAR: “And I think it’s really important for a lot of people there might be some people who are listening who might think why would you want to cancel all of this student that right there might be some people who could pay it off and I think for us we look at it as being the most simple and it you know the equitable thing to do because this debt isn’t a rich person problem, right. Trump and his Trump’s children are not benefiting from this cancellation. They don’t carry student debt. Most of the people who carry student debt are the poor and the middle class.”

See how simple it all is? One wave of the hand and watch the $1.52 trillion in student debt vanish. Poof!

The U.S. could always use an extra $1.52 trillion added to its debt levels now, couldn't it? Gonna be a lot of fun to pay back that one and don't think the interest won't accumulate.

But notice also that there's no understanding of the market forces driving up student debt levels - including the incentives universities have to drive up costs and hire useless administrators. That's based on the Obama administration's federal takeover of student loans, which allowed universities to raise costs as high as they liked given that Uncle Sam would always pay. That's what's sadded the young and unknowing students with the huge amounts of debt.

Now Omar proposes to erase the whole thing the easy way, by taxing Wall Street, with "small" transaction fees. Universities will keep raising their prices and hiring their diversity vice presidents, and nobody pays for the mess but Wall Street. This is gasoline on an already raging wildfire, so expect the mere $1.6 trillion in debt cancellation to get a whole lot bigger.

It gets worse. I looked up what the heck she was talking about and found a decent piece in the Minnesota Post, describing the Omar plan which is hooked up with the socialist economic lunacy of Castro-admiring Bernie Sanders.

Omar released her bill, the Student Debt Cancellation Act of 2019, as part of a package with Sen. Bernie Sanders (I-Vermont) and Rep. Pramila Jayapal (D-Washington), two other prominent members of the Congressional Progressive Caucus.

...and...

The authors of the package suggest that it would cost $2.2 trillion over a decade and be paid for by a tax of 0.5 percent on stock trades, a 0.1 percent fee on bonds, and a .0005 percent fee on derivatives. Sanders’ office has suggested that the tax could bring in $2.4 trillion over 10 years, and potentially pay for other initiatives as well. The Congressional Budget Office, which typically reviews the cost of legislation when a committee approves a bill, has not yet produced an analysis of the tax revenue potentially raised by the bill or the costs associated with it.

The bill, and the package as a whole, follows through on Omar’s campaign rhetoric — she ran in 2018 in part on tuition-free and debt-free two-and four-year public colleges and universities; an expansion of Federal Pell grants, which are used to cover education expenses; and the cancellation of all student debt (both private and federal loans).

Omar’s portion of the package directs the Department of Education to cancel all student loans taken out since 1965 within 180 days of the bill being signed. It also grants the Education and Treasury departments the ability to temporarily purchase and then cancel all private student loans.

Since Omar's part of the package is the stupidest and least workable, one almost suspects that the cannier Jayapal and Sanders had the ignorant Omar stick her name on the most useless part.

Omar, of course has no idea how Wall Street works. Wall Street is just this big thing to hate on, not the engine of economic growth in the U.S. economy. Tax one transaction, even a small one, and watch capital flee. Watch transactions become fewer, and watch things like state and municipal bonds, which are what fund education, go bust for lack of funds.

What's more, the futures market derivatives tax is the smallest - which is where the real big money is -- and where we find the big league Soros-level speculation.

Watch the U.S. economy becomes the speculation economy with a tax structure like this, as the cheaper taxes on speculation drive investment from stocks and bonds into futures trading. That's what's going to become more important under Omar than stocks that finance job-creating companies and bonds that finance states and cities (and some very large corporations). That money is going to flee.

Which is exactly what dictators such as Hugo Chavez did to drive away all investment in his country, leaving Venezuela's once world-class oil production facilities in smoking ruins. End the idea of debt, pay no attention to the dynamics that create debt, and watch the fire get big.

 Image credit: BET/AirTV screen shot