Ask Prof Wolff: Student Debt & Inflation

A Patron of Economic Update asks: "Prof Wolff, can you explain the relationship between debt and inflation? Would canceling $1.7 trillion in student debt cause inflation to increase, as is reported in the media, or would canceling it actually cause inflation to decrease?"

This is Professor Richard Wolff's video response.

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“Marxism always was the critical shadow of capitalism. Their interactions changed them both. Now Marxism is once again stepping into the light as capitalism shakes from its own excesses and confronts decline.”

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[Marxist]

I agree with Prof. Wolff on his analysis of this issue.

[me-jnzl]

Great explanation, for a complicated topic! Because the economy is a "complex system" in mathematical terms. Direct relationships between variables like x causes y ceteris paribus (everything else remaining equal) only exist in the hallucinations of neoliberal economics textbooks that are incapable of predicting anything (think of the Great Financial Crisis of 2008)

[ShikataGaNai]

Health care and education, from pre-school to graduate school, should be free.

[sammylee]

Chinese university tuition didn't increase for more than 20years. Back to 1997 when I was in uni. The tuition fee for art and design is 10k RMB a year (1.6kUSD) acommendation is 2k RMB (350USD) a year in a domentry for 6, which is not ideal living condition, but I did learn to live with people from different backgrounds. After the first year, students can find their own accomendation somewhere. I would say 30% of students will leave domentry. Foods in canteen is subsidized by government. U can feed urself easily for only 10-20rmb a day. (1.5-3USD). I also received 50rmb / 7.5dollars from the government as full time university student back to 1997. Chinese government removed this cash subsidize at early 2000. Health care is free but u can only visit the university's hopstial. For severe medical conditions, u can go to the big hopstial first and reimburse the expenses.

[georgefarrington]

Just love mr Wolff, info is what we all need to understand. One thing is for sure big business needs to pay better wages . A living wages.

[DidierWierdsma]

Love these videos keep up the great work professor Wolff👍
Schools university's and healthcare should be free for anyone it's a basic human right period.
America has no right to call themselves the land of the free the vast mayority of all Americans have some form of debt so basically they are not free citizens but they are debt slaves unfortunatly such ashame.
Once again a great video keep it up.
And greetings from the Netherlands🇳🇱

[Ryan_hey]

It should go without saying, but the focus shouldn't just be relieving current student debt, but also reducing the cost to begin with. So many other 1st world countries provide university-level education for free or at so low of a cost that it's laughable when compared against the US.

[jeffengel]

Intellectual humility is a strange and awesome thing to see in an economist or pundit.

[pwolckp]

At the very least the government should relieve college debt interest and make loans for education interest free. For all the older people complaining that they were able to pay their college debt off I hope they realize that when they went to school cost was significantly less than it is today. And while the cost of education has skyrocketed the wages has barely creeped up.

[adridelarosaj]

Professor Wolfe, is anyone currently on the President's cabinet understanding these issues as you do, and possibly advising Biden correctly?? If not, we need to make sure we get this video to them ASAP!!😊

[DonJorgeRM]

Hundreds of dollars freed up across millions of people every month. Student debt is a shackle on us, on society, and on the economy. Why not subsidize creativity and innovation?

[namarie]

6:15 I am one of those. I didn’t fully know how to verbalize it at the time, but I realized when I graduated 10 years ago that the supply/demand equation for people pursuing college degrees was quickly moving to my detriment, so I didn’t go. I will also add that due to market forces, the quality an education from a US institution is decreasing in a manner conversely proportional to the skyrocketing prices.

[thegratefulsteve]

Great question and response! I, myself would be able to marry my partner and the mother of my child if my own student debt was forgiven. I have been hesitant because I don't want her to be in any way responsible for a debt she wasn't coerced to acquire.

[truthbearer]

Such clearheaded thinking is rare indeed in today's America. I will state one thing simply just as Professor Wolff states his opinions simply backed by facts.

The US spends three quarters of a trillion dollars annually on military. This is greater than the next ten countries combined.

If the US would only spend just half of that in education instead of warmongering activities, then this country will begin to be more productive instead of being destructive.

[GhostOnTheHalfShell]

The long term effect of student debt is the servitude of the educated and the continued bloating of wealth of the billionaire 1000 families. They will leech even more money through the financial system and this, with dead certainty, will lead to economic collapse. It may tip into inflation and then plunge into a depression / collapse or slide into the latter, but the outcome is certain

[muzzybeat]

Are you aware that your audio is always very low volume compared to 98% of other YouTube channels? When your videos come on, I always have to pause, rewind, and then at least double - if not triple - the volume level. Then when the next video in my queue comes on, I get blasted to deaf.

[DrSanity]

Inflation is money losing value; it is the wealth of the rich eroding. Yes, it can spiral out of control. But it also eats away at debt—for students now, for farmers in the late 1800s, for our country during World War II. Yet these aims are always coded as fake or greedy. The most important inflation pressure points are generally outside the jurisdiction of the central bank. The most effective inflation targeting is in the hands of fiscal authorities who can tax & regulate abusive market power, and invest strategically to raise productive capacity.

[ultramovier]

43 million students buying homes would lead to long term stability. Isn't this what we want? It might create housing inflation in the short term but it would create millions of jobs in construction and possible home owners as well.

[BBBarua]

Businesses are going to pull prices as long as they can. Coz their survival depends on it.

[MichaelSharpBLACKDRUMMIKE]

Even if freeing people from student debt causes inflation is that a worthy enough reason to keep people in debt?