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This is just a stock flow error. Multiplier analysis is about the impact of flows of spending/subsidies/tax cuts etc. on income. He's getting a very low multiplier by looking at the total stock of student debt. But why would we do that or care about that? https://twitter.com/jasonfurman/status/1328329481241698308
Student debt cancellation is mainly a targeted tax cut which provides an outsized welfare benefit to those who experience it. but the multiplier you should calculate is the flow of payments that no longer need to be made versus the increase in spending that happens.
yes there's an additional impact from the jump in net worth that allows for, say, taking on mortgages. But all that really means is that the multiplier is higher than for a typical tax cut! This is just not the right way to look at it.
Finally, even if you wanted to calculate multipliers by the stock of debt that's cancelled, who cares? The impact is still simulative. the obsession with multipliers distorts policy analysis and leads to exactly the type of errors Furman makes here.
