Writing in Bloomberg’s opinion section, finance professor Noah Smith is advocating for a bailout for millennials, particularly by writing down their student debt and replacing it with cheaper government debt. Mr. Smith believes that we should be focusing on the financial problems not just of the poor, but of the young and poor, as millennials have suffered a “one-two punch” of both lower job prospects and higher student debt, which is taking a toll on their ability to generate wealth. But is this a good idea?

Many will agree with Mr. Smith that student debt is a problem, but how to deal with it is the real issue. Laying out his proposal, he states:

To relieve the burden on our young people, the U.S. will need to address the mountain of student-loan debt — not just the cost of college, but the debt overhang crushing the millennials. That is a problem, since the government owns a huge amount — more than $1 trillion — of the student debt outstanding. If we write down some student debt, or make it easier to expunge in bankruptcy, that could put a hole in U.S. government finances.

But that’s not so bad. The government now can borrow at very low interest rates — near zero, in fact. That is much lower than the rates on student-loan debt. So the government could write down some of the millennials’ debt, or let them more easily wipe out debt in bankruptcy, and it could replace those obligations with its own, cheaper debt.

The idea to replace higher interest rate student debt with lower interest rate federal debt seems seductively appealing at first, but a quick sanity check reveals the flaws of this proposal. If the government were to raise money by borrowing, and then use those funds to wipe out student debt, it would be effectively transferring the liability from the individual student’s balance sheet to the balance sheet of the U.S. Federal Government. So instead of individual students being in debt, all citizens of America would be responsible for this debt. In effect, it would “collectivize” the obligation and spread it out to everyone.

Before you laugh at how absurd this would be, prominent economists, including Nobel laureate and New York Times columnist, Paul Krugman, have recently made similar arguments about how using government debt to spend on public goods like this doesn’t matter because “Debt is Money We Owe to Ourselves.” Krugman and others point out that if the government uses debt to finance spending projects it is not a big deal, because the money is borrowed from Americans.

He rightly points out that “one person’s debt is another person’s asset,” this is a true accounting statement. But where the sleight of hand comes in is assuming that the government is “we” and the entire country is “ourselves.” This is equivalent to saying that if I owe my neighbor $1,000, it doesn’t really matter because between the two of us “we” owe it to ourselves. By aggregating the group you obscure what is really going on. As economist Don Boudreaux likes to ask, “does car theft and house burglary impose no net costs as long as we ‘steal it from ourselves?’”

The ultimate problem with this system is that the actors do not bear the cost of their decisions. Some highly indebted millennials will indeed benefit while the rest of taxpayers and those that made sacrifices to not take out student loans will pay the cost. You can see how this would induce a moral hazard problem where students would take out more debt than they need because they won’t have to pay for it. Extending this scheme to other areas further illuminates the problem. For example, young graduates also typically have car loans as they need a vehicle to get to work; therefore, should the government pay off all car loans and replace it with government debt? Why stop there? Many people also have mortgages, so let’s also wipe those out while we are at it!

In conclusion, debt at the personal level can certainly be a problem, but simply wiping it away will not solve the long-term issue. More importantly, transferring debt to the public level is also no magic trick, and we shouldn’t let professional economists or finance professors cast a spell over us to think otherwise.

Chris Kuiper, CFA is currently a student and researcher at George Mason University pursuing a Master’s of Economics. His previous experience includes asset management, investing and banking.