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[quote=Anonymous][quote=Anonymous]Analysts at the University of Pennsylvania’s Penn Wharton Budget Model said the plan will cost roughly $500 billion over a 10-year budget window. Relative to current law, (assuming that the interest moratorium that has been extended until the end of the year does end), the program will add about 0.2 to 0.3 of a percentage point to inflation, said Jason Furman, economics professor at Harvard University and head of former President Barack Obama’s Council of Economic Advisers.  Debt-forgiveness policy will, by design, result in millions of households having more discretionary income. That is a boost to demand and thus pushes in the direction of rising prices, and this will drive up the cost of higher education and loans going forward. Biden’s announcement mentioned that the immediate forgiveness will be paired with more generous forgiveness terms on future loans, which essentially subsidizes the very sector whose ballooning pricing got so many people into this predicament. And it means that even more people will take out loans in the future, further pushing up the costs of higher education.

The road to hell is paved with good intentions and bigger government.[/quote]

Regardless of the actual effects on inflation, there will be a perception that this is the cause of future inflation. Jerome Powell has warned there will be pain ahead. The GOP will pin these economic woes on this policy decision. They will dig up quotes by Obama-era economists to further support this perception whether it's correct or not. [/quote]

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