COVID-19 & the New Safety Net: Shifting Political Terrain for Debt Relief

• In Event: Inequality and the Politics of Consumer Debt and Debt Relief

Abstract

Beyond its public health effects, the COVID-19 pandemic represents a watershed moment for social policymaking in the United States. Several rounds of stimulus payments, generous supplements to Unemployment Insurance, and the suspension of federal student loan payments with the stroke of a pen made plain the enormous power of the federal government to alleviate financial distress for Americans. In addition, citizen behavior around debt repayment shifted radically, with a notable reduction in personal credit card debt due in part to large, lump sum payments from the federal government. Progressive politicians have made bold proposals for student loan forgiveness, centering debt relief as a core element of government's response to economic crisis. This paper examines how the unprecedented response to the pandemic has fundamentally altered the political terrain around the American social safety net, with particular attention to the role of personal debt and the potential for increased demands for debt relief that the crisis created or expanded. The paper outlines four key areas that demonstrate this shifted political terrain, and it uses original survey data to explore the potential for public support of federal debt relief in this changed political world.

Author

• Serena Laws, Trinity College, Hartford CT