Is this debt forgiveness plan really to pay the lenders with tax dollars, or to Jubilee (clearance of debt from public records across a wide sector or a nation)?
From a monetary policy perspective, there isn't a difference.
The fed prints money when spending. The Fed "un-prints" money when collecting taxes. As long as spending outruns tax collection, the fed is net-net printing money and causing monetary inflation.
If the fed clears the debt, then the $10k that the debtor owed to the government (or a bank) becomes $10k of cash that remains in circulation, whereas had they paid the debt instead, that $10k of cash would have exited circulation (un-printed) if the debt was held federally, or simply circulated if the debt was held by a bank. Either way, the Fed is creating net-net $10k additional dollars in circulation that were not there before.
Is this debt forgiveness plan really to pay the lenders with tax dollars, or to Jubilee (clearance of debt from public records across a wide sector or a nation)?
There really aren’t any big bank lenders anymore, though. The vast majority of student loans are federal, and the forgiveness only applies to these.
From a monetary policy perspective, there isn't a difference.
The fed prints money when spending. The Fed "un-prints" money when collecting taxes. As long as spending outruns tax collection, the fed is net-net printing money and causing monetary inflation.
If the fed clears the debt, then the $10k that the debtor owed to the government (or a bank) becomes $10k of cash that remains in circulation, whereas had they paid the debt instead, that $10k of cash would have exited circulation (un-printed) if the debt was held federally, or simply circulated if the debt was held by a bank. Either way, the Fed is creating net-net $10k additional dollars in circulation that were not there before.