Let’s Pay Off Everyone’s Car Loan

The government should pay off all of our car loans. It’s the progressive thing to do.

The hard-left is disappointed that Pres. Joe Biden hasn’t made good on a pledge to pay off $10,000 of every student’s loan debt, no questions asked. Progressives think even Biden’s pledge was too modest. Sen. Elizabeth Warren would go up to $50,000 while others have suggested taxpayers should just pick up the whole tab for everybody.

But, wait, I’ve got an even better idea. Pay off everybody’s auto loan.

Follow me on this, people. Student and auto loans are in the same ball park in terms of the top of the line numbers. Americans hold about $1.6 trillion in student debt or about 11% of total debt held by individuals, and they hold about $1.4 trillion in auto debt or about 9%.

But these debts aren’t spread equally. Only about one in three Americans hold a four-year degree while over 90% of us own a car. And according to a just-released Brookings Institution study, a third of student debt is owed by the richest 20% of Americans while the bottom 20% owe just 8% of it. Brookings also points out that those with a college degree earn 70% more than those who didn’t pick one up. Car debt, on the other hand, is largely concentrated in the middle income quintiles and it can be especially burdensome for the poorest Americans — very few of whom have a college degree.

Moreover, given our second-rate public transportation systems, a lot of Americans need a car to get to work or to school or to just function in society.

So, if we really want to be progressive and we’re going to spend about a trillion and a half dollars forgiving debt, wouldn’t it make more sense to pay off car loans rather than student loans?

What’s the difference between paying off somebody’s Mercedes and paying off their college loans? Paying off car debts would be more progressive.

Of course there would be problems. Say we pay off everyone’s car loan today. Then what happens a couple years from now when millions of Americans have taken out new loans? Do we pay off their loans too? And if we’re going to keep forgiving debt, what’s to stop folks from going out and buying cars they can’t afford, figuring their debt will eventually be wiped away?

Then again, the more moralistic of us might argue that your word should be good for something and that personal responsibility should matter. You knew how much the car cost. You knew the repayment schedule. You knew how much you were likely to earn. You took out the loan. You promised to pay it back. So…?

Then there will be the whiners who will point out that they dutifully paid back their car loans or they’ve been driving a beater for years because they didn’t want to take on the debt or they’ve committed themselves to riding a bike or using mass transit for the good of the planet. Why should they be forced to pick up the debts of people who weren’t as conscientious? Some people just don’t understand social justice, I guess.

Finally, the nitpickers among you will further point out that all of those objections also apply to paying off student loans — only it’s worse because those loans are disproportionately held by the wealthiest members of our society.

It should be obvious by now that this is a tongue-in-cheek exercise. Paying off car loans makes no sense. It makes even less sense to pay off any portion of student loans across the board (though some targeted relief makes sense), whether it’s Biden’s $10,000 or the more ambitious plans. There is just simply nothing at all progressive about it.

And on another matter... a year ago, we were questioning the need for the Democrats’ $1.9 trillion COVID relief package. We suggested that maybe half as much would be more than enough, but for some reason the Democratic hard-left decided that a penny less than $1.9 trillion would result in children selling matchbooks on street corners and families huddling around a single dim lightbulb. Well, now comes an Associated Press report that shows that local governments got $350 billion in aid from that bill — while suffering only $117 billion in budget shortfalls in 2020. Dane County alone got $200 million from the feds when its budget loss was $40 million. And, of course, thanks in part to all this unnecessary spending, inflation has become a major headache. We’re too classy an outfit here at YSDA to say we told you so.

Welcome to the 355th day of consecutive posts here at YSDA. Thanks for reading!


Published by dave cieslewicz

Madison/Upper Peninsula based writer. Mayor of Madison, WI from 2003 to 2011.

9 thoughts on “Let’s Pay Off Everyone’s Car Loan

  1. Dave- Rather than forcing to support the auto and credit industry, and the huge amount of auto related infrastructure (you were the Bike Fed dude for awhile, right?), offer every American citizen a $30,000 “American Citizen Disbursement” at age 18 and at age 45. That way. each person can individually decide importance of disbursement at key points in a typical citizen’s life.


      1. Dave- I do need to read the whole blog. I was scanning over my oatmeal this am. Probably wasdistracted by my cat.
        Mea Culpas.


  2. It’s all just different approaches to economic stimulus. When corporations are bailed out or subsidized, sure there are critics, but it’s just seem as normal business. When individuals are, it’s seen as insanity. I do think it would make more sense to just give everyone money if stimulus is necessary, but both parties pander to special interest groups in this regard. College grads are just another interest group now, so are farmers, automakers, defense contractors, you name it.

    “And, of course, thanks in part to all this unnecessary spending, inflation has become a major headache.”

    Inflation… hmmm… remember those tariffs on imports from China? Remember when everyone said it would result in inflation? Given what happened in the intervening years it is reasonable to include those tariffs as a sort of delayed-onset factor in our current inflationary situation. Remember those hundreds of thousands of Americans that died of Covid due to a terrible US response to the pandemic? Might upwards to 6 million suddenly dead workers worldwide have anything to do with inflation as well? And those are just a couple causes within the generally accepted concepts of inflationary causes – not even mentioning my own non-mainstream theory on the topic.

    Why are primarily Democrat policy decisions highlighted as causes of inflation in our supposedly liberal media?


    1. No question, the stimulus wasn’t the only reason for inflation. But Larry Summers and other moderates warned of inflationary pressures when Democrats were considering the bill. It was a contributing factor.


      1. Yes, a contributing factor, but the only factor our corporate media will cite. And blogs such as this follow along, buttressing the preferred narrative.


      2. There’s so much high-level reasoning and nuance going here that a reader can’t let himself be distracted by either his breakfast or his cat. YSDA requires your full attention. In fact, we recommend diagramming every sentence.


  3. Mayor Dave said – “We’re too classy an outfit here at YSDA to say we told you so.”
    I don’t have that problem, – “He Told You So”.

    If humans were still a hunter/gatherer society, this would be, yet again, an example of the “Mimes of Hypothetical Basket-making”, (alternative, and interpretive design division), wanting to decide how to divide up the buffalo that the hunters struggled back with.


  4. If this were a hunter gatherer society you’re right – nobody would be working to create excess profits for people who don’t want work, which is exactly what we do in our society. Anyone who wants some meat would be contributing in some way to the good of the group. I would love for us to move towards that ideal.


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