“A rage ... for an abolition of debts ... or for any other improper or wicked project ....” — James Madison, Federalist No. 10

The courts, in the exercise of what is called “equity jurisdiction,” have long excused borrowers from obligations incurred through fraud, duress, and other forms of creditor unfairness.

In addition, federal bankruptcy laws (authorized in the Constitution by Article I, Section 8, Clause 4) offer a path to safety for debtors who get in over their heads.

President Joe Biden’s “student loan forgiveness” measures qualify as neither. Instead, they are classic examples of what James Madison called an “improper or wicked project.”

Under the president’s program, no debtor will have to declare bankruptcy. And far from being victims, they already have enjoyed the benefit of very favorable loan terms at taxpayer expense. The borrowers spent the money for what both they and the federal government thought was a good purpose.

Read Full Article Here