No one has ever questioned Biden's willingness to do what it takes to secure his political survival
President Joe Biden announced on August 24 forgiveness for tuition debt of up to $10,000 for those earning up to $125,000, or those with a combined household income of up to $250,000. Estimates of the likely cost of the forgiveness range from $300 million to $1 trillion, in one Penn Wharton study. And as a product of an executive order, not legislation, it lacks any compensatory budgetary provisions to make up for the deficit incurred.
The first thing to note about the debt forgiveness plan is that it is deeply regressive. In the words of Harvard professor Jason Furman, it leaves 332 million Americans to pay the debts — through some combination of higher taxes, lower benefits, and inflation — of 30 million.
And those 30 million are primarily drawn from the more affluent demographics. College graduates enjoy a $900,000 lifetime earning premium for men and $630,000 for women over high school graduates. Harvard law professor Laurence Tribe notoriously tweeted his thanks to President Biden on behalf of thousands of his former students.
The massive debt forgiveness, according to Furman, will only fan the inflationary fires already raging by pouring an additional half a trillion dollars in government debt onto the flames. Inflation exacts its highest toll on the poorest Americans — i.e., those who live closest to the brink and spend almost all their earnings on necessities. The less affluent also possess the fewest appreciable assets to offset the impact of inflation.
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