Following the Biden announcement that student loan debt up to $10,000 will be waived for individuals making up to $125,000, and double that for those less well off, Republicans and even Democrats slammed the move, with one Obama administration economist labelling it as ‘reckless’.
Jason Furman, who chaired Obama’s Council of Economic Advisers, tweeted of the student debt forgiveness “Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless.”
“Doing it while going well beyond one campaign promise ($10K of student loan relief) and breaking another (all proposals paid for) is even worse,” Furman further noted.
The economist added that “The White House fact sheet has sympathetic examples about a construction worker making $38K and a married nurse making $77,000 a year. But then why design a policy that would provide up to $40,000 to a married couple making $249,000? Why include law and business school students?”
Furman also estimated that cancelling about $20,000 in student loans per student would increase inflation by 0.2% to 0.3%.