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(Video Credit: MSNBC)
Chairwoman of the Congressional Progressive Caucus Rep. Pramila Jayapal (D-WA) pushed canceling student loan debt as a social justice issue on “Meet the Press” Thursday with host Chuck Todd, while blithely ignoring the disastrous economic consequences it would trigger.
Jayapal asserted that nixing all forms of student loan debt, both public and private, would significantly raise the income of black families while also stating that means testing was not necessary to determine whether an individual would be eligible or not for federal government assistance. She appears to want all student debt canceled regardless of what it would do to the economy.
The leftist politico laughably claimed that student loan debt cancelation would “stimulate the economy.” The Committee for a Responsible Budget (CFRB) has warned that such a move would dramatically increase inflation, cost the federal government $1.6 trillion that it doesn’t have, and severely impact the supply chain.
Todd kicked off the segment by asking the woke Democrat what things President Joe Biden and the Democratic Party should be focusing on leading up to the 2022 midterm elections.
Jayapal proceeded to list a number of things she thinks Democrats should address. That list included climate change, tax reform, and student debt cancelation.
3️⃣ Words: cancel student debt.
— Pramila Jayapal (@PramilaJayapal) April 8, 2022
Todd pressed Jayapal on what would qualify someone to get their debt canceled.
“When I ran for Congress in 2016, student debt was at $1.3 trillion. Today student debt is at $1.9 trillion. A lot of this money is money that the federal government makes and that these debt collectors make on interest rates that are higher than what we actually need to be charging,” she responded, deflecting from directly answering the question.
When my son enrolled in college, parents were told the students are adults, hands off. Responsible adults pay their debts. Students took out loans knowing they would have to pay them back. If there is a problem with loan system, fix it. As responsible adults, PAY YOUR DEBT!
— Hale Grady (@HaleGrady1) April 8, 2022
She contended that if the goal was to get as many individuals with the best qualification educated, then forcing them to repay their loans would hamper the effort.
“This all shows that as much debt as you can cancel – you may know that I’m for canceling all of it – but as much debt as you can cancel is going to stimulate the economy,” she falsely claimed. “Last fact here is that if we were to cancel all of the debt that’s out there, we would raise the wealth of black families in America by 40%. This is a racial justice issue as well.”
“Sometimes we overthink this stuff in trying to parse it down when the studies actually show that we would have a net economic benefit,” Jayapal remarked. “When you free up student debt payments for people, it’s not like they just stock away that money. They actually put it into buying cars, houses, whatever, so it stimulates the economy through their purchases.”
Yes. Then forgive their car loans and home loans and credit card debt. Why should anyone have to fulfill their commitments?
— Not a Karen Karen (@kleegrubaugh) April 9, 2022
Todd did not question the validity of Jayapal’s assertions despite what economists say would happen to the economy if student debt was canceled across the board.
Her fixation on canceling student debt is nothing new. Progressives have been aggressively pushing Biden on the issue, resulting in an announcement on Wednesday that the administration plans to extend the pause on federal student loan repayments until the end of August.
“If loan payments were to resume on schedule in May, analysis of recent data from the Federal Reserve suggests that millions of student loan borrowers would face significant economic hardship,” Biden said in a statement.
The resultant delinquencies and defaults, he added, “could threaten Americans’ financial stability.”
“While the extension is welcome, a looming restart of student loan payments in September underscores the importance of swift executive action on meaningful student debt cancellation,” a letter sent to Biden by lawmakers responding to the extension said, according to the Kansas Reflector. “We continue to implore the President to use his clear legal authority to cancel student debt, which will help narrow the racial wealth gap, boost our economic recovery, and demonstrate that this government is fighting for the people.”
It will make me feel so much better if I pay off their debt.
— VetRetired (@VetRetired2) April 8, 2022
Lawmakers who sent the letter include Sens. Elizabeth Warren of Massachusetts, Chuck Schumer of New York, Alex Padilla of California, and Raphael Warnock of Georgia, as well as Reps. Ayanna Pressley of Massachusetts, Ilhan Omar of Minnesota, Pramila Jayapal of Washington, and James E. Clyburn of South Carolina.
But according to the Committee for a Responsible Budget, canceling student debt could increase inflation on top of the historic level Biden has presided over since he has been in office.
“Given the current state of the economy, we estimate cancelling all $1.6 trillion of student debt would increase the inflation rate by between 10 and 50 basis points (0.1 to 0.5 percentage points) in the 12 months after repayment is scheduled to begin. This would represent a 4 to 20 percent increase relative to the median Federal Reserve inflation rate forecast,” the committee noted in February, adding that “we estimate student debt cancellation would increase inflation by 10 to 14 basis points.”
The agency also warned that the action could potentially decrease loan institutions’ sensitivity to high levels of debt, which could then lead to further increasing college tuition, ostensibly restricting educational choices for Americans.
“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 report added.
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