Obama’s Chief Economist Slams Biden, Debt Cancelation

Joe Biden announced a $364 billion plan to unilaterally cancel student loan debt for borrowers by adding it to the taxpayers’ bill. The executive action would add fuel to the raging inflation fire and would be a giveaway to higher-income college graduates at the expense of the working class. The former chair of Obama’s Council of Economic Advisers, Jason Furman, called the plan “reckless” and said it may drive up the cost of higher education. 

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.

— Jason Furman (@jasonfurman) August 24, 2022

Furman said that “everyone” will pay for the plan, either through “higher inflation or in higher taxes or lower benefits in the future”. He added that inflation would likely wipe out any economic stimulus it brings, and went on to question the legality of the executive action.

Finally, it's not obvious to me that this is reasonable for a President to do unilaterally. A number of lawyers (and political leaders) have argued inconsistent with the law. Even if technically legal I don't like this amount of unilateral Presidential power.

— Jason Furman (@jasonfurman) August 24, 2022

Republicans also criticized the move, describing it as a “redistribution of wealth toward higher-earning people” and a “slap in the face” to working Americans who paid off or did not take student loans.

Democrats' student loan socialism is a slap in the face to working Americans who sacrificed to pay their debt or made different career choices to avoid debt. A wildly unfair redistribution of wealth toward higher-earning people. pic.twitter.com/ntyOafgklh

— Leader McConnell (@LeaderMcConnell) August 24, 2022

Bottom Line: Joe Biden’s plan transfers student loan debt to working-class taxpayers.