The Economic Fallout from Canceling Student Debt

Wall Street Journal: “Economists say that a tailored debt cancellation plan is unlikely to exacerbate short-term inflationary pressures, but could add to them in the long term, especially if universities continue to raise tuition because students might expect their loans to eventually be canceled.”

“Even some economists usually aligned with the White House, including former Clinton administration Treasury Secretary Larry Summers and former Obama administration economist Jason Furman, have criticized the cost of a potential student debt cancellation and warn that it could force future spending cuts or tax increases.”

Furman: “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.”