Alternative Visions 08/26/22 - Biden’s Bifurcated Student Debt Cancellation Proposal + Comments on Powell’s Jackson Hole Speech

Dr. Rasmus analyses the positives and negatives of Biden’s announcement canceling some student debt. The five main elements of the proposal are described. But more than 25 million students and former students will now have to resume payments and will pay even more starting 2023. Why the $10k debt forgiveness proposal will be offset in more debt in just a couple of years again. And why the second $10k won’t cover all eligible Pell grant recipients.  Rasmus explains how the new rule of paying 5% of discretionary income will result in more unpaid debt interest, rising debt principal and total debt levels. The basic problems of the student loan system is not addressed by Biden: government interest rate charges higher than market rates; no inflation adjustment; no controls on college administration costs and fees, and a narrow definition of who qualifies for residual debt forgiveness after 10 years. Rasmus proposes his own solutions to the crisis.  (for further analysis see Dr. Rasmus just published article, ‘Biden’s Bifurcated Student Debt Cancellation Plan’ at his blog, http://jackrasmus.com. The show concludes with a discussion of Fed chair Powell’s speech today at Jackson Hole, WY, and why it means further rate hikes for some time, more protracted recession, and stagflation in 2023. (Listen to next week’s Labor Day show on the state of the US working class and unions today)