{"id":1622147,"date":"2022-08-26T03:47:54","date_gmt":"2022-08-26T07:47:54","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1622147"},"modified":"2022-08-26T03:49:16","modified_gmt":"2022-08-26T07:49:16","slug":"how-joe-bidens-welfare-for-college-grads-will-stoke-inflation","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/how-joe-bidens-welfare-for-college-grads-will-stoke-inflation\/","title":{"rendered":"How Joe Biden\u2019s Welfare For College Grads Will Stoke Inflation"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fhow-joe-bidens-welfare-for-college-grads-will-stoke-inflation%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1622147&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>That didn\u2019t last long. Mere days after President Biden signed the (horribly misnamed) \u201cInflation Reduction Act\u201d into law, his administration announced efforts that will accelerate inflation\u2014now and in the future.<\/p>\n<p>The changes to the student <a href=\"https:\/\/thefederalist.com\/2022\/08\/24\/studies-show-bidens-illegal-student-debt-scheme-is-welfare-for-the-rich\/\">welfare program<\/a> Biden announced\u2014please don\u2019t call them \u201cloans\u201d anymore\u2014will increase inflation, and the federal deficit, in the short term. By encouraging universities to raise tuition further, and encouraging students not to repay their \u201cloans,\u201d so the federal government will provide additional cancellation in the future, his plan will accelerate an inflation spiral throughout higher education.<\/p>\n<h2><strong>Higher Inflation Now<\/strong><\/h2>\n<p>Earlier this week, the Penn-Wharton Budget Model released an <a href=\"https:\/\/budgetmodel.wharton.upenn.edu\/issues\/2022\/8\/23\/forgiving-student-loans\">analysis<\/a> stating that the type of giveaway proposed by Biden would cost taxpayers at least $300 billion over 10 years. Specifically, the model estimated that providing welfare payments (i.e., \u201cloan forgiveness\u201d) of $10,000 to borrowers with incomes under $125,000 would cost $297.8 billion if done as a one-time event, and $329.1 billion if done on an ongoing basis for the entire 10-year budget cycle.<\/p>\n<p>However, those estimates did not examine an additional $10,000 giveaway Biden announced for individuals who received Pell Grants. Given that <a href=\"https:\/\/www.wsj.com\/articles\/biden-to-announce-student-loan-forgiveness-plan-11661331600\">6 in 10 individuals<\/a> with \u201cloans\u201d also received Pell Grants at some point, this move will likely increase the cost of Biden\u2019s giveaway by a sizable margin, to perhaps $500 billion or more.<\/p>\n<p>Either way, the spending on these giveaways would dwarf any supposed \u201cdeficit savings\u201d coming from the legislation Biden signed into law last week. In other words, all of the audits coming as a result of <a href=\"https:\/\/thefederalist.com\/2022\/07\/29\/build-back-better-bill-would-fund-86000-additional-irs-agents-to-sic-on-american-taxpayers\/\">the 87,000 new IRS agents<\/a> this administration wants to hire will go to pay for \u201cfree\u201d college benefits to primarily <a href=\"https:\/\/budgetmodel.wharton.upenn.edu\/issues\/2022\/8\/23\/forgiving-student-loans\">upper-class students<\/a>\u2014and then some.<\/p>\n<h2><strong>Moral Hazard Later<\/strong><\/h2>\n<p>The longer-term problem comes in the form of moral hazard, whereby market participants engage in risky behavior in the assumption that government will bail out their actions. That same phenomenon occurred after the George W. Bush administration proposed, and Congress enacted, the TARP bailout for big banks in 2008.<\/p>\n<p>That moral hazard will come in a variety of forms, all of which would increase spending on higher education:<\/p>\n<ul>\n<li>Colleges could raise tuition by even greater amounts than in the past, believing that the federal government will eventually cancel the \u201cloans\u201d students take on to pay the higher fees.<\/li>\n<li>Students could well stop selecting universities based on finances, and attend more expensive universities, because they believe they will not have to pay the bill for their education. As someone who <a href=\"https:\/\/thefederalist.com\/2019\/07\/10\/dream-college-will-leave-major-debt-go-somewhere-else\/\">turned down the opportunity<\/a> for an Ivy League education, because the Ivy League institution did not provide a generous financial aid package, I could see this scenario happening quite frequently.<\/li>\n<li>Students could decide on majors that have little value for a future career, or take on additional degrees for little professional purpose, because they don\u2019t believe they will have to bear the financial consequences of their actions.<\/li>\n<li>Students could also decide to pay the minimum amount on their \u201cloans,\u201d or stop paying them altogether, in the hopes of putting additional political pressure on future Presidents to cancel their debt.<\/li>\n<\/ul>\n<p>All of these scenarios will likely happen following Biden\u2019s decision, at least to some extent. Each will increase the political pressure for additional \u201cforgiveness,\u201d adding to a cycle of the federal government stoking additional spending within higher education.<\/p>\n<p>Of course, higher education might represent the prime exemplar of a sector of the American economy that warrants <em>less spending<\/em>, not more. Woke educators indoctrinating students with Marxist and socialist ideology helped create the movement for Biden\u2019s \u201cloan forgiveness\u201d scheme.<\/p>\n<p>Rather than Biden canceling student debt, Congress should instead cancel the <em>student loan program<\/em>\u2014and make these woke educational bureaucrats earn their own keep from the private sector exclusively, rather than having students and schools receive endless bailouts courtesy of federal taxpayers.<\/p>\n<hr class=\"wp-block-separator\" \/>\n<div class=\"article-author-description fst-italic\">\n  Chris Jacobs is founder and CEO of Juniper Research Group, and author of the book, &#8220;<a href=\"https:\/\/www.amazon.com\/dp\/1645720020\">The Case Against Single Payer<\/a>.&#8221; He is on Twitter: <a href=\"http:\/\/www.twitter.com\/chrisjacobshc\">@chrisjacobsHC<\/a>. Previously he was a senior health policy analyst for the Texas Public Policy Foundation, a senior policy analyst in The Heritage Foundation\u2019s Center for Health Policy Studies, and a senior policy analyst with the Joint Economic Committee\u2019s Senate Republican staff. During the debate over the Patient Protection and Affordable Care Act, popularly known as Obamacare, Jacobs was a policy adviser for the House Republican Conference under then-Chairman Mike Pence. In the first two years of the law\u2019s implementation, he was a health policy analyst for the Senate Republican Policy Committee. Jacobs got his start on Capitol Hill as an intern for then-Rep. Pat Toomey (R-Pa.). He holds a bachelor\u2019s degree in political science and history from American University, where he is a part-time teacher of health policy. He currently resides in Washington, D.C.<\/div>\n<div class=\"article-comments mt-30 mt-sm-60\">\n<div class=\"article-comments-container d-flex flex-column align-items-center py-30\">\n    <img loading=\"lazy\" decoding=\"async\" width=\"110\" height=\"106\" src=\"https:\/\/thefederalist.com\/wp-content\/uploads\/2021\/12\/fdrlst-mark.svg\" class=\"img-fluid mb-20\" alt=\"The Federalist logo eagle mark\" \/>    <\/p>\n<p>Unlock commenting by joining the Federalist Community.<\/p>\n<p>    <a href=\"https:\/\/thefederalist.com\/plans\/pricing\/\" class=\"btn btn-on-white\">Subscribe<\/a>  <\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>That didn\u2019t last long. Mere days after President Biden signed the (horribly misnamed) \u201cInflation Reduction Act\u201d into law, his administration announced efforts that will accelerate inflation\u2014now and in the future.<\/p>\n","protected":false},"author":521,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1622147","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1622147","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/521"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1622147"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1622147\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1622147"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1622147"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1622147"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}