Committee for a Responsible Budget’s Goldwein: Loan Cancelation Will Likely More Than Cancel Out Inflation Act, Increase Recession Risk
On Tuesday’s broadcast of “CNN Newsroom,” Senior Vice President and Senior Policy Director for the Committee for a Responsible Federal Budget Marc Goldwein stated that canceling student loan debt and extending the pause on loan payments will wipe out any deficit reduction from the Inflation Reduction Act and will probably “do more to increase inflation from debt cancellation than any inflation reduction from the Inflation Reduction Act.” And will “make the Fed’s job harder and that means it’s going to increase the risk they’re going to have to drive us into a recession to get inflation under control.”
Goldwein stated, “Well, so, the Inflation Reduction Act saves maybe $300 billion in the first ten years. If we give — cancel $10,000 of debt and just extend the pause a few months, we’re going to be at about that much in terms of new cost. So, all the deficit reduction is going to be wiped out. At the same time, we’re probably going to do more to increase inflation from debt cancellation than any inflation reduction from the Inflation Reduction Act.”
He later added, “[I]t’s not as if this is going to lift inflation from 8% to 9%. What this is going to do is make it more difficult for us to get inflation down to 2% or 3%, which is where it really should be. It’s going to make the Fed’s job harder and that means it’s going to increase the risk they’re going to have to drive us into a recession to get inflation under control.”
