Dennis Porter proposes an alternative student loan forgiveness program using Bitcoin
Satoshi Action Fund CEO Dennis Porter proposed a radical alternative to President Biden’s student debt forgiveness plan.
Instead of forgiving $10,000 in student debt, Biden should have given each person $10,000 in #Bitcoinlocked up for 10 years in a smart contract that pays off the remaining student debt when it’s released.
Problem solved, no more debt.
— Dennis Porter (@Dennis_Porter_) 24 August 2022
The former political adviser proposed that the US government give each indebted individual $10,000 in BTC locked in a smart contract. At the end of the lock-in period, Porter assumes that the dollar equivalent value will be more than enough to repay the loan balance.
Aside from the improbability of this happening, the crypto community also chimed in with feedback on Porter’s idea.
The Biden administration is coming under fire
American student debt, consisting of federal and private loans, totals $1.75 trillion. Data showed the problem affects 45 million Americans — about one in seven.
On August 24, the White House announced a student loan relief package that cancels $10,000 in debt for those making less than $125,000 per year. While low-income families who had received Pell Grants qualify for $20,000 in debt forgiveness.
President Biden said the relief measures will help Americans deal with debt management and that the consequences will see tangible economic benefits.
“To finally think about buying a home or starting a family or starting a business. And by the way, when this happens, the whole economy is better off.”
On the whole, the mainstream media has spun the story into a positive event. For example, the Financial Times dismissed inflationary risks, calling the aid program “an economic nothing burger.” Meanwhile, Reuters suggested it could lead to price deflation.
However, critics raise several issues with the program. Chairman of the Republican Party of Texas, Matt Rinaldipointed out that the money has to come from somewhere, and it will be “truck drivers and plumbers” who foot the bill.
Harvard has an endowment of $42 billion. Yale’s is $31 billion. But Biden wants to tax truckers and plumbers to pay off the student loans that built those empires.
— Matt Rinaldi (@MattRinaldiTX) 23 August 2022
Corresponding political commentator Ben Shapiro chimed in to voice a message of personal responsibility and, like Rinaldi, blasted the idea of collectively bailing out those who acted financially irresponsibly.
I have a controversial idea about paying off student loan debt: don’t take on debt you probably won’t be able to pay off, and don’t ask others to pay off your debt.
— Ben Shapiro (@benshapiro) 23 August 2022
Bitcoin to the rescue(?)
Adding fire to the already politically charged debate, Porter suggested that $10,000 due to qualified individuals could be used to purchase Bitcoin, which is then locked into a smart contract that provides access after ten years.
At the end of the commitment period, the funds will be used to pay off the balance of the individual’s student debt.
Instead of forgiving $10,000 in student debt, Biden should have given each person $10,000 in #Bitcoinlocked up for 10 years in a smart contract that pays off the remaining student debt when it’s released.
Problem solved, no more debt.
— Dennis Porter (@Dennis_Porter_) 24 August 2022
Commenting on Porter’s idea, @DavidShares called it a “horrible take” in that this would require the US government to hold BTC.
Based on the concept of Bitcoin maximalists only supporting self-custodial spot BTC, others questioned the use of smart contracts and even whether Bitcoin supports such functionality.
Carrier pointed out that smart contracts are “at the center” of the Lightning Network, including a link to documentation on Hash Time-Locked Contracts.
