Biden Has Lost the Plot on Student Debt Relief

As he announced his latest round of student loan forgiveness last week — the previous one was just last month — President Joe Biden was greeted with an unpleasant reminder of why his policy is not only ill-considered but also ill-timed.

Specifically, the Bureau of Labor Statistics reported last week that consumer prices rose 3.8% from a year earlier. Inflation’s stubborn refusal to fall to 2% makes it unlikely that the Federal Reserve will cut interest rates aggressively this year.

That’s bad news for consumers, many of whom may experience high interest rates as simply another form of inflation. But it’s also bad news for broader economic reasons. High interest rates slow down homebuilding, exacerbating a national housing shortage and making it more likely that high wages will simply feed through into rents. High interest rates also encumber clean energy projects, which need a lot of upfront capital to pencil out.

Biden, in short, really needs a plan to help bring down interest rates. So why is he traveling around the country canceling billions of dollars in student debt?