Letter from Roy Miller of Phoenix

You may have heard the allegory of the man who gets up and rocks the boat, then offers to save you from the storm by sitting down.

This is precisely the situation with government-backed student loans.

The government took student loans out of the hands of private lenders several years ago, and it should come as no surprise that this caused a lot of bad behavior when loans became a law.

Students took too much money, they took classes that were easy but couldn’t put them in a position to get a job to pay off the loans, and many dodgy educational institutions sprung up to be the beneficiaries of these government largesse. This drove up the costs of a college education, necessitating ever-larger student loans, and it started a vicious circle.

Now we have equally obscene measures to ‘forgive’ those loans, a measure that will obviously encourage more bad behavior next time around and will also be a slap in the face for students and parents who were responsible enough to take on extra jobs to repay these loans or not go into debt at all.

These are known in the insurance industry as adverse selection or adverse consequences. I have a much simpler explanation: It’s called the Reverse Midas Touch. It just means that whatever the government touches becomes, not the gold that Midas predicted, but that brown substance that farmers use for their crops.

The moral is this: Leave student loans (and almost everything else) to the private sector, to be handled by people with sound economic judgment.