by Brad Polumbo | March 14, 2020
Never let a good crisis go to waste, right?
That’s apparently the philosophy of socialist upstart Rep. Alexandria Ocasio-Cortez. The New York Democrat is one of many who’ve sadly decided to politicize the coronavirus crisis to push their political agenda. But even worse, the congresswoman is spreading disinformation to do it.
After news broke that the Federal Reserve has decided to extend $1.5 trillion in emergency financing to banks in response to the economic fallout from the coronavirus, Ocasio-Cortez tweeted that “the amount that the Fed just injected almost covers all student loan debt in the US.”
“There is absolutely NO excuse for not pausing student debt collections, planning for mortgage & rent relief, etc,” she continued. “We need to care for working people as much as we care for the stock market.”
FYI, the amount that the Fed just injected almost covers all student loan debt in the US.
There is absolutely NO excuse for not pausing student debt collections, planning for mortgage &rent relief, etc.
We need to care for working people as much as we care for the stock market. https://t.co/IT6qZA2gtt
— Alexandria Ocasio-Cortez (@AOC) March 12, 2020
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This is ignorance to the point of disinformation, frankly.
What Ocasio-Cortez is suggesting is that the Federal Reserve is somehow spending $1.5 trillion in government funds and that similar levels of spending could be used to cancel all student debt in the United States. But this is false, and completely distorts the action the central bank is taking.
Brookings Institution fellow and New York Times writer Justin Wolfers (an economist whose credentials don’t exactly scream right-wing hack) called this type of comparison “horseshit,” pointing out that “the Fed’s short term loans cost us nothing when they’re all repaid the next day.”
Writing for National Review, Daniel Teneiro explained:
The Fed is not cutting a check to financial institutions.
It is engaging in short-term transactions with banks to ensure financial stability. If the Fed bought your house today and sold it back to you tomorrow, it wouldn’t be doing you a huge favor. The Fed’s intervention in the repo market, while a boon to the U.S. financial system, is far from a handout.
The Competitive Enterprise Institute’s Richard Morrison told Fox News that “the Fed is lending to banks and strategically purchasing assets, not handing over bailout payments to anyone. AOC’s comparison to student loan payment is inapt.”
Remember, Ocasio-Cortez holds a degree in economics from Boston University. She really ought to know better. (Or she should ask for a refund.)
She is, of course, free to advocate for student loan bailouts and the rest of the “Green New Deal” socialist agenda. But shame on the congresswoman for spreading disinformation to do it.