The Biden administration’s highly anticipated move to cancel outstanding student loan debt could make the current inflation crisis worse, former Treasury Secretary Larry Summers warns.
A frequent critic of President Joe Biden’s handling of inflation, Summers renewed his warning on Monday as the federal government is expected to make a decision on student loan debt “within the next week or so.”
“I hope the Administration does not contribute to inflation macro economically by offering unreasonably generous student loan relief or micro economically by encouraging college tuition increases,” Summers wrote on Twitter.
“Student loan debt relief is spending that raises demand and increases inflation,” explained Summers, who served as President Bill Clinton’s economy chief and a top economic adviser to President Barack Obama. “It consumes resources that could be better used helping those who did not, for whatever reason, have the chance to attend college. It will also tend to be inflationary by raising tuitions.”…