From an article by Michael Hudson explaining why President Biden is refusing to cancel student debt ,
“The fact is, if the government were to write down all the student debt, it wouldn’t cost the government a penny right now. And that wouldn’t cost the banks a penny because the debt is owed to the government and the government would simply be canceling a future source of revenue.”
I think Mr. Hudson’s definition of “debt” needs to be refined, because it is not currently in contact with reality. “Future revenue” would be something along the lines of “no money has changed hands yet, but some day in the future you will buy something from me.”
Debt would be more like, “you have my money and I want it back.” So when you cancel that debt I don’t get my money back and therefor I do actually lose my money. If the government gets into the habit of randomly cancelling debts, it’s going to become really difficult to find anyone who will lend you money.
The key, of course, is that Mr. Hudson says that the government “it won't cost the government a penny right now,” which is a tacit admission that it will cost the government money in the future, namely when the student loans are supposed to be paid. But he doesn’t worry about tomorrow. “Carpe diem.” Seize today