Biden's student loan handout taxes the poor and throws gas on the inflation fire
President Biden announced plans Wednesday for a student loan handout. His plan will hike inflation and tax the poor to benefit the rich.www.foxnews.com
Inflation is a tax on everyone! But Mr Big Spender doesn't care. His party does not care and accepts this un-Constitutional EO behemoth because the D party is LOSING in the public forum and headed toward losing big in November. In other words, it is designed to BUY VOTES.
See paragraph 5 here..
"Those fears are unwarranted, the Goldman economists said. Though the forgiveness program is expected to cancel roughly $400 billion in loan debt, the income-boost effect will only lift gross domestic product by 0.1% in 2023 and a smaller amount in the following years, according to the bank.
Since many borrowers will still have some balances left to pay off, student debt payments are only expected to fall to 0.3% of personal income from 0.4%. The debt cancelation is also a different kind of government relief, in that it only forgives debt already taken on and doesn't act as a direct cash infusion. That means, while the program will relieve serious financial pressures for millions of borrowers, it isn't likely to kickstart the same spending spree that stimulus checks did.
Other economists share Goldman's outlook. The near-term outlook for personal spending is "unchanged," analysts at Bank of America said in a note, adding their forecast for inflation is also the same as before.
The impact student-loan forgiveness will have on inflation "will be marginal," Mark Zandi, chief economist at Moody's Analytics, said. While debt cancelation will lift inflation slightly, the resumption of loan payments at the end of the year will counteract that upward pressure. The net effect, then, is "largely a wash," Zandi said in a Wednesday tweet."
The bottom line is this. No one is receiving $10,000 checks in the mail. The actual benefits will be much smaller and they will be spread out over a longer period of time. In addition, the resumption of student loan payments will take money out of the economy. This will not drive inflation higher as the benefits are very small in a trillion dollar plus economy.
