59% of Americans worry student loan forgiveness will make inflation worse, CNBC survey finds

[Polybius]

This discussion thread was locked as off-topic by Omaha Steve (a host of the Latest Breaking News forum).

Source: CNBC

Some experts believe the Biden administration could announce a decision on whether to extend a more than two-year-long pause on federal student loan debt this week, ahead of the current Aug. 31 deadline. Many borrowers are hoping the Education Department will extend that break and announce up to $10,000 in loan forgiveness.

Currently, about 44 million borrowers owe a collective $1.7 trillion in federal student loan debt.

Yet, a new poll finds Americans worry that debt forgiveness could have unintended consequences.

Already battling higher prices, 59% of Americans are concerned that student loan forgiveness will make inflation worse, according to a new CNBC survey, conducted online by Momentive among a national sample of 5,142 adults from Aug. 4 to 15.

Read more: https://www.cnbc.com/2022/08/22/americans-are-concerned-student-loan-forgiveness-will-worsen-inflation.html

[relayerbob]

1. More evidence that the GQP plan to destroy our education system

has worked

[33taw]

2. $1.7 Billion is a rounding error in the national budget.

[Lochloosa]

4. It's a Trillion, not billion

[33taw]

17. Sorry, I misread.

[JT45242]

3. Boogeyman inflation...

Corporate goons greedflation is ok. Reducing student loan payments by a couple of hundred bucks, bad.

People should be forced to take real financial literacy and economics to graduate HS.

[sybylla]

14. It is getting pretty tiring, no?

So many people just do not understand how the economy works. I'm betting this is more BS from corporations worried they can't enslave their college grads to a soul-sucking job just to keep making payments on their ridiculous student loans.

[Anon-C]

5. How about focus on meeting consumer's demands for the products

...and services they're seeking. That tends to lower inflation substantially as I understand it.

[LiberalFighter]

6. 59% of Americans that don't have a clue how this will impact it.

[Probatim]

7. It's more like 95% of Americans do not understand economics.

[ProfessorGAC]

28. I'll Up That To 98%

This poll is evidence. Do they think that the money used to pay the loan installment goes into a big underground vault?
The downside, however, is that this money doesn't directly lead productivity gains, which creating discretionary income would do.
There could be a transitory uptick, but there are hardly any consumer product companies running at 100% of capacity. And upping that output, with no capital required, means more gross profit. The producers will turn up rate nearly instantly.
This is a needless concern, but that's because of what you & i say about the economics acumen of the american public.

[Probatim]

35. Look at me being optimistic!

They'll say "that loan money turns into new loans" - part of that is true, but it doesn't have the impact that dollars poured into the economy will have.

Take me for instance, paid the mortgage off last fall. I've got more discretionary money to spend. Some of it is going to renovations/repairs. That money is going right back in to the economy as wages for contractors, sales for building supply houses, and three dozen other things - and their money does the same.

That's the economic growth that's needed. And that's what we lose when an entire generation is saddled with crazy debt right out of college.

[paleotn]

30. More.

Plus, inflation can be a self fulfilling prophecy. After all, for practical purposes, most of economics exists only between our ears.

[viva la]

8. Yeah, because with $10K less in debt, young people are going to go on some big spending spree?

This "inflation' issue never seems to come up when the GOPers propose a trillion-dollar gift to the very rich.

[Historic NY]

9. Please do tell us how, since it actually will make the person receiving it have a bit more buying

power. Government spending is not driving inflation, it's consumer spending and supply vs demand. Think of it as a Republican tax giveaway to the wealthy.

[BeyondGeography]

10. I got mine dressed up as "concern"

[Warpy]

11. Of course CNBC will say that shit

Anything that goes to relieve human suffering instead of to the holy stock market will end civilization as we know it.

Good.

Somebody ought to tell these assholes about the multiplier effect of money at the bottom of the economy, whether it's welfare checks, food stamps, increased wages or, horrors, loan forgiveness.

[SWBTATTReg]

12. Well, as an economist (Macro and Micro), I find this rather far-fetched, that inflation would be ...

accelerated due to this payoff of loans. I suspect that a lot of these students are already stretched out, in paying bills, and other things, and that the $10000 would go quickly and probably go to pay other bills, get essentials, etc., not be used in a frenzy to bid up prices of items, causing yet more inflation. If anything, it would somewhat strengthen people's meager balance sheets, give a few a little more breathing room, etc.

[mathematic]

21. A 10k consumer subsidy with 3.5% unemployment and supply shortages won't contribute to inflation?

Ok, so you don't think this is the case, but "far-fetched"? Surely not.

You're literally saying that this will result in an increase in aggregate demand but it won't "bid up prices". How? We're at (least at) full employment so where is this additional supply going to come from to meet this demand?

You don't seem to be referencing standard keynesian economics here, so what economic theories are you referencing?

[Johnny2X2X]

23. Demand pressures

Last edited Tue Aug 23, 2022, 04:07 PM - Edit history (1)

I do not see how this increases short term demand very much at all. You're talking debt forgiveness of the last $10K of people's loans. Most borrowers won't change their payments at all and will just pay their loans off a year or 2 earlier at some point in the future. For those people with $10K or less in outstanding loans, yes, this eliminates their monthly student loan payments. There are 48 Million borrowers, about 1/3 owe $10K or less, so about 16 million people will have an extra $50 to a few hundred bucks in their pockets a month. That is a drop in the bucket for demand pressure. It's the equivalent of giving 5% of the country a tax credit that they can take monthly of a couple grand a year.

This isn't the same as handing 48 million people $10K each.

Edit. And payments have been paused for 2 years now and will be extended for another several months. So the payments are already stopped.

[SWBTATTReg]

26. Common sense IMHO, and I am not quoting economic theory to you of all people. I am entitled

to my opinion. Everyone on DU is. Apparently, you forgot that.

[slumcamper]

13. In other words, "HEY--we don't want those 'woke elitists' to get anything we don't get!"

I've grown so cynical of these so-called polls and those whose attitudes shape the results.

Building upon the observations of de Toqueville a century earlier, the anti-intellectual nature of so-called "mainstream culture" was noted in the 1950s by anthropologists/sociologists George and Louise Spindler. Most simplified, consider this dynamic on of the "higher-learned" v. the "poorly educated" (as TFG called them after the NV caucus, e.g., "I love the poorly educated.&quot

To a great extent, the lineage of this general attitude has manifested cross-generationally and remains. It can be found in the coarse narcissism of extreme individualism, encompassing its various stripes, e.g., xenophobism, racism, misogyny, homophobism, Christian nationalism, antigovernment libertarianism, fascism, and more.

In other words, today's hardcore GOP base.

I don't give a flying fuck about what they think about this.

That's a wrap.

[GreenWave]

15. Gee who drove them bonkers on this non-issue?

Do they want people to be straddled to perpetual indebtedness?

[durablend]

16. YES

Have you not been paying attention?

[dogknob]

18. "Inflation" The peasants have too much money.

[oldsoftie]

19. Well it will definitely eat up some of the deficit savings we were supposed to get.

Because that debt doesn't just go away; it is paid; by the government & more debt for the rest of us. Terrible idea. Quit running up debt for over priced universities or over priced degrees. There ARE affordable schools out there. Or go to technical schools; they've VERY reasonably priced and skilled jobs are begging for people.
And judging by the number of people here on DU who don't think its a good idea, I already know what the genpop thinks.

[NEOBuckeye]

20. But more TAX CUTS for the rich are just fine

Ok, Republicans.

[NCjack]

22. Oh yeah. Those folks will have more money to buy better food and housing.

That will drive inflation up, and the rich will have to cut back on European vacations.

[kirby]

24. Somebody has an agenda...

Seems like a very odd poll to even pursue unless you have some sort of agenda.

[GB_RN]

25. This Is A DUMBASS Worry...

As someone who's got student debt, that's money I could be putting into retirement and my kid's college tuition.

Never mind that the majority of student loan holders are minorities who took on the debt to try and improve their lives (because us white people made college unaffordable and basically wiped out Pell Grants, pushing loans as the way to go, starting back in the 1990s). The gods forbid that poor people get a leg up...

Jesus...🤦?♂️

[nowforever]

27. What is causing inflation today

A once in a 100 year pandemic that destroyed demand, supply and production. A purposeful slow down in oil/gas production that OPEC orchestrated (energy drives the cost of everything). The war in Ukraine that has disrupted Russia's distribution of oil and gas as well as grain production in both Russia and Ukraine. Student loan forgiveness is not the same as handing these people checks for10k. This 59% number demonstrates the effectiveness of GOP talking points that are disseminated via their propaganda networks.

[paleotn]

29. Many Amurkins do well to tie their own shoes.

[LT Barclay]

31. I still think the most palatable way is to just eliminate interest and apply interest paid to the

principal.
I'm paying close to 7% and others here have higher rates.

[JCMach1]

32. Because people are stupid... They have been paused already

[Ford_Prefect]

33. I've seen stupid before on matters of the economy but this is outright dumbass chickenshit.

Giving banks and other large profiteers breaks on their corporate taxes and other financial benefits to the tune of billions of dollars is OK as long as its the GOP is doing it. Let a Democrat suggest that the national budget can stand a bit of targeted spending to help middle class folks get a break and the press howls about inflation.

It reminds me of the double standards applied in the infamous Production Code of Hollywood from the mid-30's to the late 60's.

[AZLD4Candidate]

34. Most Americans don't understand economics except for supply and demand.

Most Americans can't find Canada on a map.
Most Americans can't even find their state on a map.

Most Americans. . .

[BradAllison]

36. Who'd they poll?

Rush Limpballs audience?

[elias7]

37. I'm sick of polls as news, especially when 99% of people aren't qualified to answer the question

Tying debt forgiveness to inflation is probably a R talking point, just as tying inflation to Biden is too.

[Omaha Steve]

38. After a review by forum hosts....LOCKING

Story was over 12 hours old when posted: UPDATED MON, AUG 22 20221:48 PM EDT

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