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The Weblog at The View from the Core - Thu. 02/17/05 07:46:13 AM

"Stupid Does As Stupid Is"

Jeff Jacoby writes at The Boston Globe, Feb. 10:

.... Presidents come and go, but laments about the high price of higher education are eternal — and so are calls for ever more federal aid to mitigate it. For 60 years, the federal government has been shoveling money into programs meant to make college more affordable — yet a college degree today is more unaffordable than ever. Rarely has Washington so comprehensively worsened a problem it was determined to solve.
Beginning with the GI Bill in 1944, federal tuition aid has metastasized into a dizzying array of subsidies, most of which are now encompassed in the Higher Education Act. In addition to Pell Grants, there are Federal Supplemental Education Opportunity grants and Federal Work-Study jobs, as well as Perkins Loans, Family Education Loans, Direct Student Loans, and Stafford (or Guaranteed) Student Loans. In 2005, these will account for more than $73 billion in overall federal financial aid to college students.
Then there are the billions of dollars' worth of tuition credits and deductions written into the tax code — the Hope Tax Credit, the Lifetime Learning Tax Credit, the higher education expense deduction, the student loan interest deduction, and the tax-exempt Qualified Tuition Plans, known as "529s."
And the result of this energetic government campaign to hold down the cost of a college education? The cost of a college education is skyrocketing — and has been for years....

Colin McNickle takes it a step further, at the Tribune-Review, Feb. 14:

.... Social Security is the perfect example of true ignorance. Never mind that partially privatized accounts, coupled with even reduced existing program benefits, would exceed current Social Security benefits, it is blasphemous in many quarters to talk of restructuring this old-age safety net.
The unintended consequence? Seven decades of a lower savings rate. So what, the apologists for the Nanny State say; the difference is covered by Social Security. But for the private sector, that means there are fewer private investment dollars available "and the economy -- and wages -- grow more slowly than they would without Social Security," Mr. Norton rightly notes. Everyone is poorer for it.
And there are many other equally applicable contemporary situations. Here are just two:
- Wage floors. Whether it be called "the minimum wage" or a "living wage," the result is fewer entry-level jobs. The very people supposed to be helped by such laws are hurt; an entire class of people is denied that critical first rung on the employment ladder.
- Labor unions. Indeed, wages and working conditions for union members generally are high and better. But unions also have reduced the number of jobs available; by raising the price of labor, less of it is bought. Additionally, given that most organized labor representation is among those in government jobs, the cost to taxpayers is artificially inflated.

Both articles reference a new study on the effect of government tuition aid on the cost of education, which is announced here.

And Jacoby cites Peter Wood, who has been quoted here before.

Lane Core Jr. CIW P — Thu. 02/17/05 07:46:13 AM
Categorized as Educational & Political.


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