CNN Admits Canceling Student Debt Is Legally Dubious, Increases Inflation

While many in the liberal media were lauding President Biden for announcing he plans to cancel between $10,000 and $20,000 in student debt per borrower, CNN’s Right NowThey had to swallow the bitter pill, admitting that the move was not legal and could lead inflation to rise again. But whatever goodwill that reporting may have garnered was squandered immediately by them parroting the Big Lie that we’re not in a recession.

As they were discussing the justifiable outrage among those who didn’t take out student loans and those who paid theirs off, CNN host Chris Wallace recalled that “in 2021, both Joe Biden and Nancy Pelosi said that the president didn’t have the unilateral power to forgive student loans.”

“So, you know, there’s a big jump from that to what the President ended up doing yesterday. And as a result, you’re going to definitely see court challenges to this sooner rather than later,” He concluded.

Host Kate Bolduan “for sure” agreed and seemed to scoff at the executive branch’s attempt to legally justify the move:

The legal foundation for this, which the Department of Education released, was — goes back to an Act that was passed in response to 9/11. And they are trying to assign this pandemic. So, there’s 100 percent going to be legal challenges to this.

 

 

And after playing a soundbite of her pressing Education Secretary Miguel Cardona on “why are so many people upset about it,” Bolduan teed up Wallace to go off.

“Well, they’re delivering for some of the American people if you’re somebody under the income limit of $125,000” and “if you had a Pell Grant, a $20,000 break. It’s delivering for you.”  But “if you’re a working-class person who never went to college, you’re not going to get any of this $300 billion it’s going to cost the government,”He stated.

Wallace also noted the threat of even more inflation would rise if Biden’s plan went through:

Inflation is another concern. Larry Summers, who’s probably been more accurate about projecting inflation than anybody says, “look, these people who are going to be spending that — paying off their student loans, that’s more money in their pocket, they’re going to go out and spend, that raises demand, that raises prices, that raises inflation. This may be America’s number one economic concern. According to polls, this is the top economic worry of Americans. It didn’t work for them.

Bolduan, however, was interested in providing a safety net for Democrats in November. He wanted to find out how low inflation could be to stop the red tide. Wallace proclaimed the Big Lie while awaiting this response. “we are not in a recession now by most standards.”

He instantly added a qualifier. “maybe technically one could argue.” Adding: “But if you keep raising interest rates by so much, into next year, it certainly increases the threat of a recession that everybody agrees and is not just a technical marker.”

The traditional definition of a recession (until Biden became president) was that it is two-quarters of negative growth. We have.

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You can find the transcript below. To read it, please click on “expand”.

CNN’s Right Now
August 25, 2022
Eastern, 11:07:34

(…)

CHRIS WALLACE So, you know, there’s a big jump from that to what the President ended up doing yesterday. This is why you will see this issue in court sooner than expected.

KATE BOLDUAN So, there’s 100 percent going to be legal challenges to this.

Yet, the secretary of education still has a question for me. Let me play this for you.

[Cuts to video]

Why are people so upset about this good news?

MIGUEL CARDONA, Education secretary: I am so happy to be able to tell you that the people I’m speaking with are delighted. I talked to a teacher yesterday who said, “this is going to help me, now I can help my daughter go to college.” I’ve gotten communication from folks all over the country saying, “we needed this, thank you.”

The president’s earlier comment reminded me a lot about school reopening. I had people telling me, “don’t open schools, it is unsafe.” I had other people saying, “if you don’t open it, you’re doing a disservice to students.” We’re delivering for the American people based on what we know to be true.

[Cuts back to live]

BOLDUAN – What are your thoughts on that?

WALLACE: They’re providing assistance for Americans if they are a person with a household income below $125,000. A $10,000 cut or, if your Pell Grant was available to you, $20,000 will be given. It’s delivering for you. If you’re a working-class person who never went to college, you’re not going to get any of this $300 billion it’s going to cost the government.

Inflation is another concern. Larry Summers, who’s probably been more accurate about projecting inflation than anybody says, “look, these people who are going to be spending that — paying off their student loans, that’s more money in their pocket, they’re going to go out and spend, that raises demand, that raises prices, that raises inflation. This may be America’s number one economic concern. According to polls, this is the top economic worry of Americans. It didn’t work for them.

BOLDUAN In the second quarter, GDP fell below what was previously expected. This is a great take. We’re all just cynics. But the economy is still shrinking, you’ve got the new jobs number showing that the labor market is still strong, but again, as you said, inflation is still a huge problem.

We always have someone from White House present and they refuse to give me their goals or set a bar for when they believe we are out of inflation. They don’t want to set a marker.

Do you feel that it’s getting better for voters and the people?

WALLACE We’re talking about eight percent — almost nine percent inflation. This is a terrible idea. That’s a difficult question. It is also a subjective issue. If it is six or seven percent, which is less lousy than eight or nine percent, people may say – as we do, a lot of us with gas prices when it’s a dollar lower than a month ago – you know, that’s better. That’s the real question.

Jay Powell, chairman of Federal Reserve, is the reason. He is speaking at Jackson Hole’s economic symposium tomorrow. One of the topics people will focus on is his view of how long he believes he has to keep interest rates low. He’s certainly going to go 50 of 75 basis points in September.

But people are really going to be looking, what’s he going to say about later in the year, what’s he going to say about 2023. You know that this is going to show the growing threat. We aren’t in recession by any standards. Technically, one might argue. If you raise interest rates so much into the next year, that certainly increases the danger of a depression. That is a fact everyone accepts.

(…)

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