HIGHER EDUCATION BUBBLE UPDATE: Obama Administration Opens Door For More Student-Debt Forgiveness, Including Law School Loans. “The forgiveness push, though, would reach far beyond Corinthian and even the for-profit school sector. Officials said that under the emerging plan, the government will consider forgiving any loans made directly by the government—those held by the majority of the 43 million Americans with student debt—so long as the borrower can document a school persuaded him or her to take out the loan under conditions that would violate state laws.”

Related: The Parable Of The Tulip Subsidy.

I’m afraid that Sanders’ plan is a lot like the tulip subsidy idea that started off this post. It would subsidize the continuation of a useless tradition that has turned into a speculation bubble, prevent the bubble from ever popping, and disincentivize people from figuring out a way to route around the problem, eg replacing the tulips with daffodils. . . .

If I were Sanders, I’d propose a different strategy. Make “college degree” a protected characteristic, like race and religion and sexuality. If you’re not allowed to ask a job candidate whether they’re gay, you’re not allowed to ask them whether they’re a college graduate or not. You can give them all sorts of examinations, you can ask them their high school grades and SAT scores, you can ask their work history, but if you ask them if they have a degree then that’s illegal class-based discrimination and you’re going to jail. I realize this is a blatant violation of my usual semi-libertarian principles, but at this point I don’t care.

Read the whole thing.