It is an amazing thing how politicians believe that all you have to do is throw money at a problem and it will go away. Or perhaps I give the scoundrels too much credit, as their ultimate goal is to buy votes from an unsuspecting, naïve electorate. Whatever the case, Barack Obama is at it again, this time proposing to spend more money to stave off the negative effects of high college tuition on America’s higher education students.
Late last week, the president unveiled a plan to give relief to Americans affected by high college costs while at the same time providing incentives to colleges and universities to contain tuition costs. Key provisions of the plan include boosting federal spending on Perkins loans from $1 billion to $8 billion, keeping interest rates low for current student loan recipients, and doubling over the next five years the number of work-study jobs available to college students. Further, the president’s plan would force institutions of higher learning to contain tuition costs or risk losing federal funding.
Now, this isn’t the first time since becoming president that Obama has upped the ante when it comes to spending on higher education. In fact, he has more than doubled Pell Grant funding and spent billions more on college subsidies in his so-called stimulus act and Patient Protection and Affordable Care Act.
Given the fact that college tuitions continue to rise, you’d think that Mr. Obama would have learned that more money thrown at higher education doesn’t help college students. The direct opposite happens. Yes, college students take the money and go to school, but the end result is that many of them have debts they will never be able to pay off. In fact, student loan debt now exceeds credit card debt in America. Additionally, since many high paying jobs have gone overseas, college graduates are finding it harder and harder to acquire positions that will give them any chance to pay down their debts. Only about half of the jobs obtained by recent college graduates even require a college degree.
But more importantly, it is precisely because the government is spending billions every year to subsidize higher education that costs have gone through the roof. Since 1980, congressional funding of college Pell Grants has increased by 475 percent, after adjusting for inflation. At the same time, the cost of tuition has skyrocketed by over 430 percent. Economist Richard Vedder has pointed out that the same dynamic that causes health care costs to soar is also at work in higher education: third-party payments. When someone else is footing the bill, consumers are more willing to purchase the good or service provided. The inhibition of cost is removed, demand increases, and tuition, like medicine and medical care, gets more costly.
Article comments
— go to most recent comments1 - Glenn Contrarian
Wow. Look at the following train of logic:
it is precisely because the government is spending billions every year to subsidize higher education that costs have gone through the roof.
And what happens, according to Kenn? Demand increased because more prospective students could go to college, thereby driving costs up.
So let's say Kenn is right on the money. That means that if the government had just kept out of it, far fewer students would have been able to afford college, which means demand would have been lower, and so would costs...
...but the key thing is, far fewer students would have gone to college, rather than far more. And which is better for the nation? Hm?
Kenn, FYI, as in most other things, you get what you pay for - and if you want to live in a nation of people who have a higher-than-average level of education, you're going to have to pay the TAXES in order to make that happen...which is why the oh-so-socialist nations of the world tend to have a much more educated population than those nations that provide little or no assistance to those who want higher education.
2 - lucascapps
I am sure High Speed Universities will offer an affordable and flexible alternative for any one seeking a higher education degree at an affordable price in a short time.
3 - Kenn Jacobine
Glenn,
As usual you haven't a clue about how economics works. How do you know how many students should attend college? I would never pretend to. Maybe too many go and now there are no jobs for most of them. Is that an efficient use of our resources both monetary and human? Only the free market can decide that issue not some bureaucrat or politician..
In the industries where government subsidizes there are high costs. The cost of technology generally goes down over time, but not technology in health care because Uncle Scam has his mitts all over it.
4 - Kenn Jacobine
Glenn,
Put another way, who decides how many computers Apple produces? The market. So why shouldn't the same principle apply to education. The market should decide who goes and who doesn't. You are belittling non-college jobs by saying everyone should be able to go to college.
5 - Glenn Contrarian
Kenn -
Riiiiiight. It's a bad thing to encourage more kids to go to college if the 'free market' says they shouldn't.
Hate to break this to you, Kenn, but America ain't the freest market in the world...and that's WHY we have more kids go to college! I'm going back to asking you the same kind of questions you've always refused to answer before - WHY is it that the oh-so-socialized First World nations have it so much better? WHY is it that the oh-so-socialized First World nations have a much more educated population even though they do NOT let the free market determine how many kids go to college? WHY is it that there are ZERO First World nations that are anything close to the free-market capitalist ideal that you think would result in a stronger economy? WHY is it that while there are ZERO First World nations that operate on libertarian ideals, there's LOTS of Third World nations that operate on libertarian ideals...and yet REMAIN Third World nations?
Kenn, perhaps it would be more understandable if we were to use a metaphor. In the Great Game of Socialists versus Free-Marketers, the score is determined by how many First World nations one has, compared to how many Third World nations one has. Right now the Socialists, who stacked their lineups with liberals, elitists, statists, and unions, whereas the Free-Marketers invested in corporatists, conservatives, and libertarians.
And what's the score? Well, so far the Socialists haven't been perfect - there's at least a quarter of socialized nations that aren't in the first rank of the First World, but they've still got a batting average of well over .600.
But what's the score for the Free-Marketers? Zero! Their batting average is zero. They've got zero nations that are in the First World!
And Albert Einstein is over on the sidelines pulling his hair out, jumping up and down, and pointing wildly at the Free Marketers and yelling, "Gott in Himmel! Dummkopfs! Do zey not know the very definition of insanity? It's doing the same thing over and over again and expecting different results! Zey do se SAME thing, refuse ze Socialist reforms to help the people, and it never works...but still zey do it again and again and again! Zey haff not learned that their way does not work because ze score is STILL zero, but zey do not try somethink else! But zey vill NEVER score zis way! Dummkopfs!"
Sometimes, Kenn, the rhetoric of a certain philosophy can sound really, really good - as libertarianism does - but in the real world, the success of a nation is measured by how well the people of a nation live, by how educated their people are, by how corrupt their government is in comparison to other nations of the world. Libertarianism has zero successes, Kenn. Libertarianism has a zero batting average. Don'tcha think it's time that it's time to try something else?
6 - Kenn Jacobine
Glenn, if you think that corporatists are a part of capitalism then you don't understand what capitalism is. Corporatism is a natural outgrowth of big government that you support. Under a "free" market system there would be minimal regulation thus the corporates would be unable to rig the system in their favor. Who do you think writes all the regulations you love so much? - corporatists. You system is corporatist dominated and thus we have the problems we have. Go to Mises.org and get some books on economics and for heaven's sake stop listening to that goof Krugman.
7 - Michael Alexander
Interesting logic... Obama spending money on higher education isn't doing anything for us anyway, in the past few years that Obama's been supposedly "buying our votes" tuition rates for public and private colleges have been going up. I have a feeling that if he wanted to buy our votes our tuition rates would be dropping.
What's caused the current economy was the American public's ignorance in the housing market and Obama's ignorance about the economy with his bailouts.
I don't support Obama, and there are plenty of reasons not to, but at least show some actually connected facts and figures when you degrade him. Punish for what he did, not for what he didn't do.
8 - Kenn Jacobine
Michael,
Most Americans like my friend Glenn above don't understand economics. Young voters will believe Obama is doing them a favor by spending more money on higher education, but in essense he is making the problem of high tuition costs worse by biddng up the costs of education with more dollars.
Put another way, housing prices increased through the roof before 2008 because the government spent and lended lots of money for housing. Right now is a pretty good time to buy a house. The same is happening with high ed. The best time to go to college will be when the bubble
pops and tuitions come back down to earth.
9 - Glenn Contrarian
Kenn -
Claiming that corporatism - and giant corporations - isn't a part of capitalism is like saying pregnancy isn't a result of sex! And like unrestrained sex among teenagers will result in LOTS of teenage pregnancies, unrestrained capitalism WILL result in LOTS of giant corporations...and they WILL use every means at their disposal to influence any government they think presents even the possibility of a threat to their dividend report. To think otherwise is simply naive.
Kenn, I really don't care about what you think your philosophy and economic theory says, because when said theory is applied in the REAL world and the theory doesn't work out as planned (as in the zero-point-zero-zero batting average mentioned above), something's obviously wrong with the theory! Can you not grok that?
What I DO care about is the reality of the world - and the more unrestrained the capitalism, the stronger the corporations get! There was a time when we tried to get corporations under control - under someone named Teddy Roosevelt, who was as close to a progressive president as we've ever had.
Reagan broke up Ma Bell, and until conservative economics really took hold in the 90's under Clinton - and YES, he was a fiscal conservative - the Sherman Anti-Trust Act was occasionally used to prevent huge monopolies. But now? Corporate money is SO strong in our political system!
And Kenn - WHO was it that opened the floodgates of corporate money into our politics (e.g. Citizens United? WHO was it that demanded free-trade acts and removed the tariffs and taxes that protected our manufacturing sector? It was the oh-so-capitalist conservatives!
Real liberals, Kenn, want to get those tariffs and taxes back to protect what's left of our manufacturing sector. Real liberals want to get corporate money OUT of politics. Real liberals want to use the Sherman Anti-Trust Act to break up the biggest banks - and Wal-Mart, too. Real liberals want to use legislation and regulation to level the playing field so that ALL entrepreneurs have a chance, Can you imagine someone opening a mom-and-pop clothing store in a town where there's a Wal-Mart? Where's the opportunity? Where's even the possibility of competition?
When it comes to giant corporations, Kenn, regulation and legislation are the ONLY defense that small businesses have.
If you want a strong economy, Kenn, go look at Germany. They're very socialized, very unionized, unafraid of using legislation and regulation to enable small businesses in the face of giant corporations, and despite all the crap going on in Europe, they've still got a strong economy - and are one of the biggest exporters in the world!
Again, what's the batting average for libertarian nations in the world, when it comes to having First World status? ZERO POINT ZERO ZERO. Doesn't that tell you something? Doesn't it?
10 - Glenn Contrarian
Michael Alexander -
Um, I hate to break this to you, but Obama couldn't simply snap his fingers and voila! down goes the tuition rates.
What he did do was to get the private banks out of the college loan business - because all they were, were middlemen who added on an extra 8% on to each and every loan just for 'processing' the loan. That's all they did - processing (and essentially duplicating what the government was already doing) - and got billions as a result, and it was the students (including myself) who had to pay up.
If you'd take the time and look, you'd find that Obama's proposing to cut financial assistance for those attending for-profit universities - because it's those universities where the tuition has skyrocketed the most. BTW - when it comes to bailouts, what's the biggest automaker in the world? Hm?
11 - Glenn Contrarian
And Kenn -
Since you're not really paying much attention to what I've written, I'll just ask you two questions: why is it, despite all the nations that do operate with libertarian models - and yes, there's many that do - why is it that none are First World nations, and why is it that ALL First World nations (outside of the Middle East) are by your definition too socialized to succeed?
I've asked you that many times and you've never, ever answered. How about now?
12 - Igor
#6-Kenn reveals the source of his confusion about free markets:
Under a "free" market system there would be minimal regulation thus the corporates would be unable to rig the system in their favor.
But it is precisely because of de-regulation that corps are able to corrupt government and rig the system in their favor.
And so-called "free markets" are easily gobbled up by monopolies to extend their empires and enrich their pockets.
13 - Cannonshop
Kenn, hate to tell you this this late in the game, but Obama doesn't NEED to "Buy" college voters. He already had 'em. Kind of a culmination of fifty years of declining educational standards and increasingly politicized educational institutions with their "Speech Codes" and Special-interest-lib studies courses.
14 - Igor
9-Glenn is right when he says:
"When it comes to giant corporations, Kenn, regulation and legislation are the ONLY defense that small businesses have"
Monopoly corporations RELENTLESSLY crush small business in their perpetual search to feed the unquenchable hunger for more money from their officers.
15 - roger nowosielski
@15
Be nice now, Cannon. He certainly doesn't have the OWS vote.
And you're underestimating the drift of liberal education (not liberal as in politics). It's way too critical and Marxist to find Obama's brand of make-believe socialism acceptable.
But I keep on forgetting, you're a latecomer.
16 - Kenn Jacobine
Glenn you have this weird thought that 3rd World countries are libertarian. lol lol lol Do those same countries have central banks? Do they require licenses to start businesses or go into select occupations? Do they have huge bureaucracies that eat at the sustenance of the people? Is nepotism rampant? If you answer yes to any of these questions then they are not libertarian. And I haven't even gotten to the most important tenet of all - respect and absolute protection for private property. Go to mises.org and get a few books.
17 - Zingzing
See, Glenn, libertarian countries exist in this this perfect, gem-like state of beautiful impossibility, like a dream where everything wrong with humankind has been wiped away because they're stacked up in a ditch and set on fire.
18 - Glenn Contrarian
Kenn, you know as well as I do that there is no perfectly libertarian society...and you also know as well as I do that many third world nations are much closer to that libertarian ideal since they have small, weak governments, weak - and usually unenforced - regulation of business and industry, no minimum wage (or one that it laughably small)....
But that begs the question, Kenn - are you saying that a society must be completely libertarian in all respects before it begins progressing towards that libertarian 'paradise'? At what point does the libertarian magic begin? I'd really like for you to answer that question!
19 - Kenn Jacobine
Glenn,
In all the developing countries I've visited and lived in (which are many) there exists a central bank, licensing, big bureaucracy, disrespect for private property, and enormous amounts of nepotism, corporatism, and corruption. You saying these countries are anywhere near being libertarian shows your ignorance about libertarianism, capitalism, and economics in generous. Again, the site is mises.org. You can learn all about these issues on that site.
20 - Clavos
that's WHY we have more kids go to college!
We do indeed. We also have high dropout rates because too many kids have been socially promoted into college who have no business being there and who should have been encouraged to go to a technical or trade school instead.
We have too many college students, Glenn, not too few. College is not and should not be for everyone; not everyone is qualified for higher education.
WHY is it that the oh-so-socialized First World nations have a much more educated population even though they do NOT let the free market determine how many kids go to college?
Except for language skills (i.e. being multilingual because unlike insular, provincial America, they require kids to take second language courses for years in primary and secondary school), they don't have a more educated population.
They do a much better job than we do of lower and secondary school education, but in Europe for example, kids are tested in secondary schools, and based on their scores are steered either into college or trade/technical/vocational schools.
...go look at Germany. They're very socialized, very unionized, unafraid of using legislation and regulation to enable small businesses in the face of giant corporations, and despite all the crap going on in Europe, they've still got a strong economy - and are one of the biggest exporters in the world!
And they, more than any other European country, DO NOT send every Tom, Dick, and Harry to college. It is in fact their system that I described above.
what's the biggest automaker in the world? Hm?
Toyota. Still. With VW poised to surpass it. The one mfr. you think is (GM) runs a distant third.
...and you also know as well as I do that many third world nations are much closer to that libertarian ideal since they have small, weak governments...
Say what??? They are almost always strongman dictatorships with no civil rights structure and no power anywhere outside the government -- none
21 - Arch Conservative
Glenn seems to think that formal education is the only yardstick with which to measure one's character or worth.
Colleges these days are churning out educated idiots by the thousands.
22 - zingzing
"Glenn seems to think that formal education is the only yardstick with which to measure one's character or worth."
that's simplistic and not at all indicative of the complex system by which each and every one of us makes character judgments. but you went to college, didn't you?
23 - Glenn Contrarian
Kenn -
In all the developing countries I've visited and lived in (which are many) there exists a central bank, licensing, big bureaucracy, disrespect for private property, and enormous amounts of nepotism, corporatism, and corruption.
HA! And what you don't get is that such is that such is the inevitable result of strict libertarianism - because libertarian theory, just like communist theory, does NOT take into account not-so-simple human nature! And to address your (gasp!) 'evidence' that none of them are libertarian at all:
"central bank" - Kenn, do you know so little of international commerce and relations that you think a nation doesn't need a central bank? Do you really think that a nation's currency is going to be worth anything if there's no central bank? There's a REASON why way back in the 1800's we got away from different entities within the U.S. issuing currency of their own, Kenn - and you, being an historian, should know that. And if it's the 'gold standard' you're hankering after, tell me - what would happen to the prices of nearly ALL of our electronics if we went back on the gold standard? You want financial chaos and a complete disruption and destruction of the electronics industry, including all computers, cell phones, et cetera? Going back to the gold standard will do just that:
...the Bank of England abandoned the gold standard in 1931 as speculators demanded gold in exchange for currency, threatening the solvency of the British monetary system.
And why did we go to having a central issuing authority in 1836? Because of the problems that resulted directly from the lack of regulation:
With minimum regulation, a proliferation of 1,600 local state-chartered, private banks now issued paper money. State bank notes, with over 30,000 varieties of color and design, were easily counterfeited. That, along with bank failures, caused confusion and circulation problems.
"licensing and big bureaucracy" - they are all easily bypassed with bribes - don't tell me they're not! Furthermore, the small businesses often get away with having no business license at all. You KNOW this, Kenn - unless you really haven't gotten to know the business side of living in a third world nation. I have.
"disrespect for private property" - Not only by the government, but especially by unrestrained, unregulated industry and corporations - again, don't tell me they don't! The government can come in and say, "we're going to do this and that"...but since the governments are relatively small and weak compared to ANY first-world nation, the government largely does not do so. A direct result is that industry and corporations are unrestrained and unregulated, and when they want to do whatever, wherever, the government has ZERO power to stop them. Again, you KNOW this! A strong government is the people's only real defense against unrestrained, unregulated industry and corporations, and third world nations do NOT have strong governments.
"enormous amounts of nepotism, corporatism, and corruption" - again, HA! Do you really think that with your 'small government' with a minimum of regulation, that nepotism wouldn't be a problem? It's HUMAN NATURE, Kenn - and where there is a lack of ethics regulation and strict enforcement of those ethics regulations, you WILL have runaway nepotism! Corporatism? I addressed that above - with a minimum of regulation, corporations run wild with no one to stop them from whatever they wanted to do wherever...and with a weak government, the people have ZERO defense against those corporations. And as for corruption? All that is, is the direct result of the nepotism and corporatism that are themselves direct results of lack of regulation and enforcement because the government is too weak.
AGAIN, Kenn - third-world nations have (1) small, weak governments, (2) relatively low taxes which are difficult (and often impossible) to enforce, (3) little regulation of corporations and industry, (4) little or no social safety nets. All these are libertarian tenets that libertarians claim are essential for a prosperous nation, and most third-world nations have these libertarian requirements in spades to a FAR greater extent than ANY first-world nation - yet are the third-world nations becoming first-world nations? No.
So I ask you again, Kenn - does a nation have to be TOTALLY libertarian before it begins to progress towards that promised libertarian paradise? And if not, then why aren't the third-world nations which DO operate on largely libertarian principles surpassing the oh-so-socialist first-world nations?
Hm?
24 - Glenn Contrarian
Arch -
Show me where I said that formal education is the only way to measure one's character or worth? I never said that or said remotely anything like that. It's just something that popped up in your brain, and since it sounded like something bad, you automatically thought it applied to liberals like myself - sorta like the "Obama's a narcissist" accusation, again, without the slightest shred of proof other than your own imagination.
But when it comes to formal education, Arch, the education level of the population as a whole DOES go a long way towards determining the success of a nation...and if you'll look around, the higher the education level of a nation, the more strongly that nation tends to accept socialist ideals! But don't let that stop you from making wild unsubstantiated assumptions, now....
25 - zingzing
archie is the master of the empty comment. not that all his comments are empty, but when he wants to make one, it's like a bubble that floats only on his own hot air.