If they had good answers about how to avoid the problems many expect with it, the Biden White House’s student loan debt “forgiveness” plan, Team Biden could probably make that plan a success, at least from a PR standpoint. While the current plan is obviously unpopular with those that paid their loans or never took any, turning it instead into a $10,000 education credit, a $10,000 general debt jubilee, or even just sticking to the plan but explaining why it’s necessary and vowing to fix the problem that led to the debt crisis in the first place would probably win most Americans over.
Heck, even just explaining why the plan won’t be inflationary (or making up a convincing lie about why that’s the case) could help them turn what looks like a payoff for youth votes like how the Caesars bought the loyalty of the Praetorians and legions into something marginally less bad.
But Team Biden seems utterly incapable of such messaging. Instead, it just has its toadies keep repeating the same tired, unconvincing phrases time after time, day after day. Such was the case when Jared Bernstein of the White House’s Council of Economic Advisors appeared on CNBC and attempted to defend the plan. He failed in quite a humiliating fashion.
At one point in the interview, for example, Bernstein tried to argue against the Congressional Budget Office and brought up unrelated claims about tax receipts, arguing over the deficit. That was ridiculous because the real issue at play isn’t the deficit, which is obviously down somewhat because the insane Covid spending is finally over and done with, but whether Team Biden is spending too much money, particularly with this latest handout to those that can’t pay their debts. Rambling about the deficit, Bernstein said:
“Let me unpack, you’re raising good questions, and any reference to slush funds is completely inaccurate and inappropriate, and I’m sure you’ve not heard that from any of us. Here’s story the decline in the budget deficit expected to be well north of $1 trillion this year, we’ve heard $1.7 trillion from the congressional budget office, is not just because spending has come off of the pandemic era programs that’s part of it. But in fact, if you look at the percentage change of receipts coming into the Treasury, they’ve actually been larger than the negative spending that you cited.
“One of the offshoots of the very strong economy, the very tight labor market, is strong receipts flowing to the Treasury, and that is driving record levels of deficit reduction. Now what we have been careful to say is that when you’re reducing the deficit, 350 billion the first year, 1.7 trillion the second year, and you’re spending in the case of this student debt relief program that delivers crucial debt relief to over 40 million borrowers, that spending is far outweighed bit amount of that deficit reduction. It’s a very simple point saying basically 1.7 trillion is a lot bigger than 240 billion, the lat are being the cost as we’ve said of the debt forgiveness program.”
But it’s not outweighed, at least in the eyes of many Americans. There’s still a deficit, which is a problem, and the deficit would be lower if they weren’t giving a handout to those who theoretically have the best chance of earning high incomes and being able to pay off their loans.
So that explanation went quite poorly, as he didn’t refute anything and instead just rambling about the deficit while not really touching on the real issue at play, which is the massive handout to those who had the chance of getting a college education.
But Bernstein’s ranting went even worse when he tried arguing that the massive spend on debt forgiveness isn’t inflationary, bizarrely disagreeing with economists and claiming that because people will be spending money on different debt rather than student debt, there won’t be any inflationary impact. In his words:
I think…they and I are on different sides of this is they’ve argued that this will be inflationary, you know, we’ve cited Goldman Sachs analysis, many other economists saying if you look at the expenditures from the debt forgiveness, they look to us to be about the same magnitude as the restart which also begins in January one is pooling on the economy, and it offsets the other now one of the things that Jason has pointed out and he’s right is that you can’t take credit for anything that’s in the baseline and we don’t do that in our accounting when it comes to the deficit and the debt what I have just described to you, 1.7 trillion debt reduction, those numbers don’t play any of the baseline that Jason has warned us against. When it comes to inflation, it’s definitely relevant that the cooling force of people restarting paying their loans offsets any inflationary impact from forgiveness.
What? That makes no sense, yet it’s what the White House is pushing. And it’s entirely unconvincing, with many moderate Americans wondering what Kernen was when he asked if the plan is “worth it”, saying:
“I haven’t even brought up what the other side has said about all these things. I mean that — that’s just vociferously against almost all these things. But in the IRA and I have a problem with even calling it that, the Inflation Reduction Act, you point to because you raise taxes, you point to some deficit reduction. This eats up all of that deficit reduction, and then it adds another, nobody knows, but probably at least another 300 billion onto it. So it’s like I said, just to mollify or appease the far left progressives and maybe get a few votes. Do you really think that it’s worth it politically to — to have done this?”
“Probably not”, particularly from a budget perspective. People should repay their loans, not treat the government like their sugar daddy.