Summers: postponing student debt payments will make inflation worse

Larry Summers is slamming the Biden Administration’s decision to further postpone student debt payments, saying, “The Administration’s postponement yet again of student debt payments is very hard to understand on policy terms. Wherever one stands on student debt relief this approach is regressive, uncertainty creating, untargeted and inappropriate at a time when the economy is overheated. This is not a small macroeconomic thing. At a time when the economy is overheating the Administration s student debt action will be injecting money into the economy at a 100 billion a year annual rate.  This is a macroeconomic step in the wrong direction.”

The Brookings Institute says postponing student debt payments is a regressive giveaway to the rich: “Accounting correctly for both human capital and effect of subsidies in student lending plans, almost a third of all student debt is owed by the wealthiest 20 percent of households and only 8 percent by the bottom 20 percent. Across-the-board student loan forgiveness is regressive measured by income, family affluence, educational attainment—and also wealth.”

Do House Democrats agree with the Biden Administration’s decision to make the inflation crisis even worse so it can finance a $100 billion giveaway to the wealthy?