4 ms·
This guy is very wishy-washy with his definitions and research, considering how strong his headline is. In order to fully answer the question of how cancelling
by t_mann 4y ago
This guy is very wishy-washy with his definitions and research, considering how strong his headline is. In order to fully answer the question of how cancelling student debt actually impacts money supply over the full lifetime of the loan, we'd have to know how exactly those loans were granted, as well as how the proceeds from collection are generally being used.
If those loans were granted through banks (effectively, regardless of what the sticker said) and those loans won't be repaid after the cancellation, then yes, this would be inflationary. If, however, the loans were originally paid out from the federal budget and the proceeds also went into the federal budget, then effectively this would result in an increase government deficit (resulting in an increase in government debt or reduction in government spending, or both, depending on your behavioral model of the government). The same goes if the loans were initially granted through banks and the government repays the bank loans even after cancelling the debt - it's not inflationary, it's deficitary.