Investor Michael Burry, known for betting against the housing market before the 2008 financial crisis and his appearance in the non-fiction classic The Big Short and the movie adaptation, has some thoughts on President Biden’s student debt forgiveness policy announced Wednesday.
If you’ve been following Burry’s tweets, you already know he’s not a fan.
The founder of the hedge fund Scion Asset Management warned again about the dangers of too much stimulus.
“With recent spending bills, including the student loan forgiveness, now approaching $2 trillion this year, we have the emergence of the Fiscal Put,” he wrote on Twitter on Thursday, using the finance lingo of “the put,” which refers to a backstop for investors. He added that it’s “not just for COVID anymore. And will be as good for America’s economy as sugar for babies.”
Of course, sugar isn’t good for babies. Burry is obviously insinuating that the policy will have grossly negative effects on the economy.
He also raised a question: how will Americans adjust when all of these big federal programs end? After all, along with announcing debt cancellation, Biden extended the payment pause on federally backed student loans and said it will be the last one and payments will resume in January—for real this time. Some Wall Street investment banks noted that aspect of the policy is actually disinflationary. Burry was strongly implying that Americans will be unprepared to start paying their debt when the new year starts.
Biden’s student debt cancellation policy announced this week will forgive up to $10,000 for federal borrowers earning less than $125,000 annually (and families earning less than $250,000), and it will forgive up to $20,000 for borrowers who received a Pell Grant.
Burry’s Twitter activity is typically unpredictable and a bit cryptic—he’s even deleted his account more than once, and often deletes his tweets after posting them. But it seems like if he could short Americans’ creditworthiness, he would.
This story was originally featured on Fortune.com