Biden canceling student debt would make inflation worse, experts warn

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Student debt cancellation 'is not good policy,' expert warns

The inflation crisis in the U.S. will only worsen if President
Biden cancels large swaths of student debt, experts warn.

Maya MacGuineas, president of the Committee for a Responsible
Federal Budget (CRFB), warned that student "debt cancellation
may be an extremely appealing political talking point, but it is
not good policy."

"It is costly, inflationary, poorly targeted, and fails to
address the root problems in our higher education financing
system," MacGuineas said in a statement Thursday. "Full debt
cancellation would be a massive hand-out to rich doctors and
lawyers, would worsen our inflation crisis, and would cost
almost as much as the entire 2017 tax cuts."

"Even partial debt cancellation would be costly, regressive, and
inflationary," she continued. "Forgiving $10,000 per person of
debt would cost as much as universal pre-K or a full extension
of the expanded ACA subsidies."

"Either the President is serious about reducing deficits and
getting inflation under control, or he is not. The White House
can’t have it both ways," MacGuineas added. "We need to be
focusing on a serious and effective agenda that prioritizes
sound policies, not poorly targeted political giveaways."

Jessica Anderson, the executive director of Heritage Action, the
political sister organization to conservative think tank the
Heritage Foundation, told Fox News Digital that canceling
student debt "would raise inflation by up to 20%."

"Make no mistake: this is a handout to wealthy, educated voters
that will come at the expense of higher prices for food, gas,
and energy for working American families who won’t see a dime of
relief — not to mention higher taxes," she continued. "This is
an absurd election-year gimmick that punishes most Americans."

Manhattan Institute senior fellow Brian Riedl was less emphatic
about the inflationary impact of canceling debt, though he made
clear that he still views it as bad economic policy.

"If the president tries to permanently cancel a large portion of
student debt, that may add perhaps 0.3% to this year’s inflation
rate. Again, not helpful, but not a major driver of inflation,"
Riedl told Fox News Digital.

"The problems with student loan forgiveness are that the policy
would transfer these liabilities over to the taxpayers (raising
deficits and ultimately taxes), disproportionately benefit upper-
income attorneys and doctors, and also send a signal to current
and future college students that they should borrow even more on
the expectation of future loan forgiveness programs," he added.

CRFB warned in February, when inflation was sitting at 7.48% and
counting, that "canceling all $1.6 trillion of student debt
would increase the inflation rate" by between 0.1% and 0.5% a
year after the repayments are set to begin.

The organization put the cost of the federal government
canceling all student debt at $1.6 trillion — nearly as much
money as Biden’s signature $1.9 trillion American Rescue Plan —
"while improving household balance sheets by a similar amount"
and expecting "an $80 billion reduction in repayments in the
first year."

"The inflation effect of canceling $1.6 trillion in student debt
would be small relative to the enormous amount involved, since
repayments are spread out over time and the benefits of debt
cancellation accrue mainly to higher earners, who tend to save
more of their money," CRFB's analysis said.

"However, the increase is significant relative to the underlying
inflation rate. It would represent a 4 to 20% increase relative
to the Fed’s latest inflation forecast and a 5 to 25% increase
above its target."

The organization wrote that "even a modest increase in
inflationary pressures could feed into current inflation
dynamics, increasing the risk of a wage-price spiral and making
it harder for the Federal Reserve to re-anchor inflation
expectations around its current target."

They also estimated that much of "this increase would also occur
if the Biden administration continued the student loan payment
moratorium for another year, since it would result in the same
increase in cash flow to individuals."

"Besides adding $1.6 trillion to the national debt and
disproportionately benefiting higher-income individuals, we find
student debt cancellation would cause prices to increase faster
than they already are, exacerbating inflationary pressures,"
CRBF warned.

On the other side of the cancelation conversation, CRBF
predicted an increase in "household consumption by $70 to $95
billion once the effect of higher wealth is considered" if
student debt is canceled but pointed out that the current U.S.
economy simply cannot meet market demand in spite of "elevated
disposable income, strong balance sheets, lingering supply
constraints, and other factors."

"This disconnect helps to explain why the inflation rate hit a
40-year high in the past year, and why further increasing demand
could result in higher prices rather than higher output," CRFB's
analysis said.

Additionally, CRBF said their estimations didn’t take into
account the widespread effect that would hit tuition prices
should student debt be forgiven.

"Prospective students may expect future rounds of debt
cancellation, which could increase their willingness to take on
more debt, thus decreasing their sensitivity to the prices that
schools charge and ultimately making it easier for schools to
increase prices even faster than they already do," the
organization writes.

White House press secretary Jen Psaki was asked by Fox News'
Jacqui Heinrich about the concerns of inflation rising due to
the potential debt cancellation, responding that "the president
is looking at the impact of student loans" and that "to make
sure that these working families are getting relief is more
important than tax cuts to millionaires, billionaires and
corporations."

"And we can make choices about where we invest and where we
think we can make the tax system more fair," Psaki said. "But
there isn't even a bill that's moving through Congress, nor have
we put a proposal together. So I don't. Those numbers aren't
based on any reality at this moment."

The inflation warning of a widespread student loan cancellation
comes as Americans are facing higher prices across the board and
the value of the dollar gets stretched thinner.

Inflation has soared throughout Biden’s first term in office and
economists have pointed to Biden's signature multitrillion-
dollar spending package as one of the drivers of inflation.

https://www.foxbusiness.com/politics/biden-canceling-student-
debt-make-inflation-worse

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No federal student loan borrower, regardless of income or
ability to work, has been required to make a student loan
payment in two years

The Biden administration is trying once again to save its
tanking poll numbers by writing a blank check to student loan
borrowers using Americans’ pocketbooks.

Nearly every pandemic relief program has expired as the economy,
which the president repeatedly touts as growing at the fastest
pace in four decades, recovers and COVID restrictions move
further into the rearview mirror.

Americans are finally returning to their everyday lives,
balancing the responsibilities of work and family. Yet,
according to the president and Democrats in Congress, it is
essential that taxpayers continue to fund the largest and most
regressive transfer of wealth to the upper-class in modern
history, to the tune of $5 billion every month.

Since March 2020, no federal student loan borrower, regardless
of income or ability to work, has been required to make a
student loan payment – not a single penny in two years.

These deferments were intended to be a safety net at the height
of the pandemic. Two years later, the deferments have turned
into a $150 billion spending spree predominately benefiting
lawyers, doctors, and bankers who racked up their debt in
graduate school.

In fact, the repayment pause – which the White House sees as a
shining achievement of its commitment to fairness and equity –
provides bachelor’s degree holders a mere ten cents in relief
for every dollar provided to doctors. That extra $150 billion in
unnecessary national debt makes it that much harder to find
funding for COVID therapeutics or larger Pell Grants for low-
income students and adds the hidden tax of inflation and higher
debt for future generations.

Now, facing a stalled legislative agenda and an inflation crisis
exacerbated by his administration’s disastrous policies,
President Biden is doing what’s politically expedient and
extending, for a second time, the "final extension" of the
repayment pause and proposing to cancel tens of thousands of
student loans for 44 million borrowers.

By caving to progressives, he is breaking his promise to over
100 million taxpayers without student debt who are subsidizing
this boondoggle. President Biden is grasping at straws and
putting politics over responsible policy.

The left has argued for the repayment pause and advocated for
abolishing student borrowers’ obligations to taxpayers on the
grounds of anything and everything from "economic, racial, and
gender injustice" to climate change.

By caving to progressives, President Biden is breaking his
promise to over 100 million taxpayers without student debt who
are subsidizing this boondoggle.

Yet, when in the position to actually legislate, House and
Senate Democrats are (un)surprisingly quiet on student loan
debt. Rather than do their jobs, top Democrats are asking the
president to do their dirty work for them, calling for an
additional extension through the end of the year and debt
forgiveness by executive fiat.

The administration justifies this elitist handout arguing that
borrowers are simply not ready to pay their monthly bills. And
progressives back this flawed argument by citing absurdly biased
polling data from a group whose mission statement is to cancel
student debt while ignoring the data that further relief is
unwarranted – such as the 2.9 percent unemployment rate of
college graduates and the less than 1 percent of private
borrowers needing emergency relief.

The most troubling excuse for mass cancellation and this
permanent pandemic pause touted by progressive policymakers is
that it mitigates the impact of the resident’s inflation crisis.

Low-income households are hit hardest by inflation and are the
least likely to hold a college degree. Economists across the
political spectrum agree that the repayment pause has
exacerbated inflation – Larry Summers included.

In fact, a recent analysis found that extending the repayment
pause through the end of the year would easily push inflation
above 9 percent. Flooding the economy through loan forgiveness
with another trillion and a half dollars won’t ease inflation
pressures either. And the single mother of three paying nearly
double at the pump and struggling to put food on the table for
her family isn’t interested in taking on monthly payments for a
Harvard MBA graduate.

So why is President Biden doing this? Simply put, he is placing
politics and poll numbers above his fiscal and moral
responsibilities.

Seven in ten Americans are indifferent at best about this
administration as we head into primary season. Desperate times
call for desperate measures, and Uncle Joe is banking on the
left’s ideologues to save Democrats from a disastrous midterm
election, taxpayers be damned.

Republican Richard Burr represents North Carolina in the United
States Senate.

https://www.foxnews.com/opinion/biden-student-loan-borrowers-
blank-check-taxpayers-virginia-foxx-richard-burr

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Inflation has skyrocketed throughout Biden’s first year in office

Inflation has soared during President Biden's time in office,
leaving many Americans paying more for essential items.

Inflation rose to 8.54% in March from 7.57% in February, having
skyrocketed throughout Biden’s first year in office. Economists
have pointed to Biden's signature multi-trillion dollar spending
package as one of the drivers of inflation.

Inflation is the rate at which prices for goods and services
increase over time. In other words, it is the rate of how much
more a person has to spend to get the same amount of a good or
service.

Biden and the Democrats have been pointing their fingers at
Putin as the reason for the price hike, but Republicans are
looking to the West Wing as the source of the economic troubles.

"Inflation is substantially outpacing wage growth, which means
Americans have taken a pay cut under the Biden presidency,"
Republican Study Committee chairman Jim Banks, R-Ind., told Fox
News Digital.

"Liberal, Obama White House economists warned the Democrats’
reckless spending would hurt working families, but Joe Biden and
Nancy Pelosi simply don’t care and want to spend even more,"
Banks continued.

Government policies heavily impact inflation, as the federal
government is the steward of the market, meaning an increase in
government spending or the introduction of more dollars into the
market by the government would drastically affect the value of
the dollar.

Americans are already seeing the crimson signs of their dollar
not going as far as it used to: gas prices are skyrocketing,
rent costs are rising, and food is becoming more expensive.

Groceries
Food costs across the board are expected to continue rising,
with a warning of global food shortages coming from Biden last
month. The president cited his sanctions of Russia for their war
in Ukraine as a factor in the expected shortages.

Rep. Kevin Hern, R-Ok., a House Ways and Means Committee member
and co-chair of the Small Business Caucus, told Fox News Digital
that businesses "rely on stability in the market and consistency
from their government."

"From the farms that grow our food to the factories that process
it to the truck drivers to who deliver it to grocery stores and
restaurants – everyone is experiencing volatility in the
aftermath of pandemic restrictions and conflicting messages from
their government," Hern said.

The Oklahoma Republican said that speaking "from experience as a
restaurant owner, even a delay of a few hours on a shipment
could mean shortages on the menu" and that the "delays we’re
looking at now will be much more substantial, and they’ll impact
grocery stores and restaurants of all sizes."

"It’s probably too late to prevent a food shortage crisis
entirely, but it’s not too late to take action to limit the
damage by incentivizing employment, restoring stability, and
strengthening our supply chain," Hern added.

Fuel and gas
Georgia Rep. Austin Scott agreed with his fellow Republican,
saying that no "American should have to choose between filling
their gas tanks or their stomachs, but that's the reality for
many under this administration."

"Biden’s irresponsible policies and the Left’s overspending are
to blame," Scott continued, adding that "Biden’s gas crisis
makes food more expensive."

"Fuel prices contribute to rising food costs because farmers and
truckers need diesel to operate and transport supplies," Scott
said. "Our reliance on foreign oil directly impacts our grocery
bills."

The average gas price in the U.S. currently sits over $4 a
gallon, and the hefty fuel prices are making workers reconsider
going into the office to work as businesses resume normal
operations after the pandemic.

The war in Ukraine has put a strain on the global oil supply,
but the Democrats have also largely targeted fossil fuels in
their aim to transition America to a green energy economy.

Republicans have also hammered Biden over his decision to nix
the Keystone XL pipeline in America while previously lifting
sanctions on Russia’s Nord Stream 2 pipeline.

The Biden administration’s messaging to Americans encouraging
them to buy electric vehicles to deal with the rising fuel
prices has also drawn criticism from Republicans.

Not just the gas, the whole car
Additionally, car prices are up in the U.S. due to chip
shortages and supply chain issues that have made buying a new
car, including electric vehicles, difficult for many Americans.

In fact, people who bought new cars in January 2022 were paying
12.2 percent more than they would if they bought the car a year
earlier. Market analyst Stephanie Brinley told CarAndDriver.com
she does not "see MSRPs going down" but that the price
volatility could calm down once supply meets demand, predicting
that to happen in "late 2023, early 2024." Used car prices
haven’t escaped inflation, either, with them being up 28%,
according to Kelley Blue Book.

Rising fuel prices have put heavy strain on the supply chain,
making it more difficult for car manufacturers to keep up with
demand as Americans get back to work.

Home energy costs
Food, fuel, and transportation are just three necessities for
everyday American life, but inflation doesn’t just stop at the
pump or grocery store: people are feeling it at home, too.

Utility prices have jumped from inflation, too, with electricity
costs up nine percent in February and piped gas up 24 percent.
Typically, utility costs go up in the winter, but the rising
prices have been steadily increasing for the past year.

Not just heating, the whole home
Rent prices are up, as well, with the average cost of a two-
bedroom apartment in February 2022 costing $1,295 per month — up
nearly $200 from the $1,100 average price in February 2021.

Reuters reported last week that the average rate for a 30-year
fixed-rate mortgage hit a 12-year high of 5.2 percent. This
comes coupled with a cooling housing market as more potential
buyers aren’t purchasing homes.

Additionally, as high inflation rates make it harder for
individuals to buy homes, investment firms are buying up
properties, including entire neighborhoods.

Republicans also slammed the administration for pointing their
finger at Putin for the rising prices when inflation has been
going up since Biden took office last year.

"I’m tired of the administration blaming the war in Ukraine on
inflation when prices skyrocketed day one Biden took office,"
Scott said. "We had intelligence in December that Russia was
going to invade Ukraine, and Biden should have imposed sanctions
last year to defund the Russian war machine and reduce our
reliance on foreign oil."

The rising prices could spell trouble for Democrats as they head
into a tough re-election year that is predicted to see heavy
Republican gains.

https://www.foxbusiness.com/politics/five-things-cost-more-
inflation-biden-policies

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This is a plan to transfer wealth from the poor and middle class
to the wealthy

America is experiencing inflation, gas prices are the highest
are some of the highest in U.S. history, and the Biden
administration is planning a money transfer to the richest
segment of the American population.

On Monday, during a meeting with the Congressional Hispanic
Caucus, President Joe Biden shared he was moving toward
implementing student loan forgiveness.

The president didn’t get into specifics, how much would be
canceled or for whom, but he had campaigned on canceling $10,000
worth of student debt per student. One lawmaker in attendance
took his comments to mean Biden would cancel all student debt
but CBS News clarified that Biden didn’t mean "all" but would be
"open to going beyond what he originally vowed as a candidate."

Nor did the president get into how, exactly, this kind of
"cancelation" would be possible. Would the lender simply forget
about it? Would the government actually make payment on these
loans? Or would debtors simply get a check in the mail?

A few weeks ago, the administration extended the pandemic-era
pause on student loan payments, with waived interest, until
August. Why? We’re in a time of incredibly low unemployment. Why
put off the payment of this debt?

And why, of all debts, is the student loan one the focus from
the president? People are struggling to put gas in their cars to
get to work or pay astronomical electric bills. Why should a
basket weaving major at Super Expensive Private University get
her debt paid off while a refrigerator repairman continues to
struggle with enormous price hikes on everyday items due to
BidenInflation?

The plan to "cancel" debt accrued while attending college is a
plan to transfer wealth from the poor and middle class to the
wealthy.

The Chicago Booth Review, a publication out of University of
Chicago’s Booth School of Business, found "While the highest-
income groups have about twice the student debt as the lowest-
income groups, research finds that across-the-board loan
forgiveness would disproportionately benefit the rich, saving
them well more than twice as much money" and would make income
inequality worse.

It makes sense. The son of a plumber, who went to a local
college, lived at home and worked while attending school so he
could graduate loan-free, instead of partying for four years at
a lavish private university with rock climbing walls and luxury
dorm rooms, would now be responsible for the ramifications of
someone else’s bad choices.

It also doesn’t help that this handout doesn’t come with any
plan on what to do going forward. The people not paying their
debt today are in a great time for employment. What about the
people who graduate in four years or eight? What if there’s a
recession or worse? How many more university debts are we
signing up to pay? If the system is broken, and it is, why
continue to let it function as is?

Senate Minority Whip John Thune is introducing a bill to stop
the Biden administration from canceling the debt. The bill would
also prevent the administration from indefinitely pausing the
debt or exempting people making over 400% over the poverty line
from participating in any pause.

This is absolutely a moment where Republicans have to fight back
and clearly make the case about this wealth transfer. This isn’t
debt forgiveness. This is debt-someone-else-pays-it.

Karol Markowicz is a columnist at the New York Post. She has
also written for Time, USA Today, The Observer, Heat Street,
Federalist, Daily Beast and elsewhere. Follow her on Twitter
@Karol.

https://www.foxnews.com/opinion/biden-cancel-student-debt-
forgiveness-karol-markowicz

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12% of adults rely solely on Social Security income

Rising prices are squeezing household budgets across the
country, but the hottest inflation in four decades has been
particularly burdensome for older Americans.

That's because many of country's 56 million residents age 65 and
up are relying on a fixed income and limited savings – and need
to maintain their same level of purchasing power to cover
monthly expenses for a prolonged period of time, according to
Mary Johnson, a Social Security analyst for the Senior Citizens
League.

Half of older adults who live alone did not have enough money
before the pandemic began to cover basic needs, according to the
Elder Index, a cost-of-living measure created by the Gerontology
Institute at the University of Massachusetts at Boston. The
rapid rise in inflation is further weighing on those individuals.

Prices soared 8.5% in March from the previous year, the Labor
Department said last week, the fastest pace since December 1981.
That increase extends to key staples that have skyrocketed in
price over the past year like food (8.8%), gasoline (48%),
electricity (13.5%) and rent (5.1%).

"If [older people] have any retirement savings whatsoever,
inflation can dramatically lower what’s in their savings
account," Johnson told FOX Business.

There are two reasons that higher consumer prices are eating
away at older Americans' nest eggs: First, retirees have to draw
out more money in order to cover rising costs. On top of that,
individuals with any sort of fixed income investment, like bonds
or CDs, tend to see lower returns because higher inflation is
typically accompanied by higher interest rates.

"Those are supposed to be ‘relatively safer investments,'"
Johnson said. "But the real danger is inflation can really eat
into those returns from those types of investments. The problem
with a low-interest rate environment, and the problem with the
inflationary environment, is you need to take more out of them.
It’s sort of a lose-lose."

There are about 12% of older adults who live solely on Social
Security, which pays an average of $1,657 per month, a 5.9%
increase from the previous year. But soaring inflation has
already eroded the entirety of the increase, according to
calculations by the Senior Citizens League.

At the end of April, the total shortfall for an average benefit
was $162.60.

Roughly 9.5% of people over the age of 65 live below the federal
poverty line, compared with 8.8% of younger adults, according to
one measure by the Census Bureau. A single person is considered
poor in the U.S. if they make less than $12,500 per year.

A recent study conducted by Allianz Life Insurance Company of
North America showed that just 40% of retirees believe their
income is keeping pace with inflation. About half of respondents
said they had a plan to address the rising cost of living.

"Regardless of whether they are retired or still in the
workforce, all Americans are challenged by inflation right now
and need to develop strategies that ensure their income keeps up
with rising costs," said Kelly LaVigne, the vice president of
consumer insights at Allianz Life. "While changes to spending
habits can help in the short term, it’s important that people
take measured steps, such as adding a source of guaranteed
income that can help to protect their finances without
sacrificing retirement security."

https://www.foxbusiness.com/money/soaring-inflation-eating-away-
at-americans-retirement-income

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Minnesota Democrat Jeff Ettinger says he "know[s] how to fight
inflation" because his former company made food "affordable."
That company is facing an array of lawsuits that say it
conspired to inflate the price of pork.

Ettinger served as CEO of Hormel Foods from 2005 to 2016. During
that time, Hormel conspired with other pork processors to run a
"classic … price fixing scheme" to drive up the price of ham and
bacon, active lawsuits facing the company argue. While Hormel
has said the allegations are "completely without merit," one of
the companies involved in the purported scheme agreed to a $42
million settlement in early July.

Now, Ettinger is running in an August special election to
replace the late Jim Hagedorn after the Republican congressman
died in February. Ettinger has attempted to fight concerns of
record-high inflation under President Joe Biden by touting his
time at Hormel—in a July 10 ad, the Democrat said he "know[s]
how to fight inflation" as his "business was making food
affordable." He went on to repeat the claim twice in the
following week.

The price-fixing lawsuits that loom over Hormel, however, could
undermine Ettinger's ability to navigate a perilous political
climate that is driven by voters' concerns over the economy.
According to a June MinnPost poll, 94 percent of Minnesotans say
rising gas and grocery prices have made their lives more
"difficult" or "inconvenient." On a national level, meanwhile,
Americans view inflation as the top problem facing the country
and believe that problem is Biden's fault—64 percent of likely
U.S. voters say the Biden administration's policies have
increased inflation, according to a March Rasmussen poll.

Ettinger declined to comment.

According to the series of lawsuits against Hormel, the food
processing company in 2009 began sharing sensitive information
with its competitors about its "profits, prices, costs, and
production" in an attempt to drive up pork prices. A who's who
of grocery and restaurant chains have joined the lawsuits, the
first of which was filed in 2018—prominent plaintiffs include
Kroger, Hy-Vee, Buffalo Wild Wings, Jimmy John's, and Sonic
Drive-In.

Ettinger, who grew up in Los Angeles, made big money from his
time at Hormel—his total compensation in 2016 alone was $36
million, according to the Minneapolis Star Tribune. The
Democrat's financial disclosure also shows tens of millions of
dollars in investments, and half of the roughly $800,000
Ettinger has raised came from his own pocket.

Ettinger's wealth sparked one of his primary opponents, small
business owner Rick DeVoe, to accuse Ettinger of being out of
touch with everyday voters in Minnesota's First Congressional
District, who DeVoe said are sick of "corporate malfeasance."
Still, Ettinger said in his July ad that he understands why
Minnesotans "feel squeezed."

Ettinger used his financial advantage to emerge from the special
election's May 24 primary and will face Republican Brad Finstad
in November. Finstad, a former state legislator, served in
former president Donald Trump's Department of Agriculture and
has raised $614,000 to Ettinger's $805,000.

Published under: Feature, Inflation, Jeff Ettinger, Minnesota

https://freebeacon.com/democrats/swine-and-sleaze-democrat-
conspired-to-hike-pork-prices-lawsuits-say/