“If you’re the incumbent, then ultimately, part of an election is just a referendum on the economy,” said Alec Phillips, the chief political economist at Goldman Sachs. “It doesn’t really matter who is responsible for what. If people are unhappy, then they’re going to take it out on the incumbent.”
Jared Bernstein, Biden’s top economic adviser, said the administration believes the effects of restarting student loan payments will be “small enough that they shouldn’t be felt in the overall macro economy.” He cited a 0.3 percent drop in annual consumer spending that reduces GDP by 0.2 percent as the “high-end estimate.”
For individual households, the resumption of payments amid “the strongest labor market in generations” will help offset some of the costs, Bernstein said. “There are a lot of tailwinds that are helping the American consumer even as restart begins,” he added, citing declining inflation and a rise in real wages.
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