Media

‘Just The Reality’: CNBC Host Says Canceling Student Debt Will Make Things Way Harder For Inflation

[Screenshot MSNBC Morning Joe]

Brianna Lyman News and Commentary Writer
Font Size:

Host of CNBC’s “Squawk Box” Andrew Ross Sorkin said Thursday that canceling student debt will undoubtedly make things worse for inflation despite insistence from the White House to the contrary.

Sorkin joined MSNBC’s “Morning Joe” to discuss the criticism the Biden administration is receiving after President Joe Biden announced Wednesday that the administration would be canceling student debt for certain borrowers.

Biden said he would cancel up to $20,000 in student debt for Pell Grant recipients while canceling up to $10,000 in student loans for those making under $125,000 a year. A report by the University of Pennsylvania’s Wharton School of Business found the move to cancel student debt could cost taxpayers more than $300 billion over the next ten years.

Sorkin told host Willie Geist that for the beneficiaries of the cancelation, the announcement is a “very good thing.” (RELATED: FLASHBACK: Pelosi Said Biden Doesn’t Have Power To Cancel Student Debt. Now Calls Move ‘Bold’)

“I also think there is no way to look at this and say it is not going to make things harder for the Federal Reserve and for government to try to bring down inflation,” Sorkin added. “That is just the reality of this decision.”

Sorkin said there are also some legal and philosophical questions when it comes to canceling student debt, noting how during the 2008 financial crisis when the government helped bail out mega-corporations many were upset that some people were getting “helped over other people.”

“So here we are with another – I don’t want to say a handout, but we’ve decided to incentivize or to provide benefits to certain people over others. And invariably, the result of that, beyond the economic result, is that we are going to have an additional political fight in this country that I think is just beginning today.”

Several have raised concerns that the move to cancel student debt will jack up inflation. Former Obama economist Jason Furman took to Twitter to criticize the move.

“Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless. Doing it while going well beyond one campaign promise ($10k of student loan relief) and breaking another (all proposals paid for) is even worse,” Furman tweeted, arguing canceling approximately $20,000 in student loans per student would increase inflation by 0.2% to 0.3%.

CNN commentator Catherine Rampell criticized the plan Wednesday, saying “from an equity and inflationary standpoint, it’s not the best use of taxpayer dollars.”

“I think this is gonna cost a lot of money and may be going to a lot of people who don’t really need the help,” Rampell continued.

A CNBC/Momentive poll released Monday showed 59% of Americans had concerns inflation would be worsened by student loan forgiveness.

The Biden administration said the plan will not impact inflation. Domestic Policy adviser Susan Rice said “numerous experts affirm that restarting paused loan payments at around the same time as we provide targeted debt relief will not have any meaningful effect on inflation.”

White House press secretary Karine Jean-Pierre said when student loan borrowers resume paying their loans in January, the incoming money will offset the cancelation of certain loans and “could actually be deflationary.”