As Campfireweekend could tell you, I don't know anything about economics, but quantitative easing is just the government purchase of bank held assets, right? The government could totally buy all of the student loan debt in the country and just never collect. It would economically just function as a transfer payment. All of the arguments I've heard against total loan forgiveness are that it's a poorly reasoned stimulus and goes to the wrong people (richer people end up at richer schools; why not just give the money to the poor and homeless who are more likely to spend it) and it's also a lot of money. But it's not impossible and I don't know think there's anything to suggest there would be economic collapse.
Well, no and yes. In the US, QE is the buying of federal reserve notes or at times mortgage backed securities. They can't, for instance, just buy your specific loan to buy a car. Or buy a bank's building (should it own it). These are also assets.
It also doesn't have the power to forgive these loans even if it could buy student loans. The reason QE assets bought seem to be forgiven is because it owes itself the money. Paying itself is the same as not paying. But if they own the student loan debt, someone has to pay the loan. And again, it doesn't have power to just forgive it. The Federal Reserve does not have to ability to buy liabilities, only assets.
This is crucial because when the Fed bought MBS through QE, those payments were still owned. It could not forgive it. Jill Stein doesn't appear to know this. Now, it's possible the Fed could get away with forgiving, but we don't know. It's never been attempted and it's not codified specifically in law. It would definitely lead to lawsuits from...someone.
And some of the debt is through the Dept of Education, which the Fed probably can't access.
For Jill Stein's plan to work, she'd probably have to get Congress to pass numerous laws, I'd imagine. She doesn't have the power to forgive debt...and the whole point of her plan is to ignore Congress...
There's other issues. The Fed is supposed to be independent, recall. And forgiving all student debt is very inefficient. A lot of student debt is actually not a problem at all. Make targeting student debt forgiveness, not en masse.
The point of QE is an extreme measure to put money into the economy in a massive way (remember, with a RR of 10%, every $1 put in can become $10). It has nothing to do with forgiving debt of any kind. When the Fed buys Treasury notes, it is basically just paying off the debt early at a premium, not forgiving it. It doesn't forgive MBS. Why would student debt be any different?
Main point: QE doesn't forgive debt.
