Our So Called “Rights” Are Expensive!

One of the fastest ways to make things more expensive is for the government to provide easy access to money to pay for such things. Nothing illustrates this better than the cost of a college education. As has been widely reported for years now, the costs of a college education have skyrocketed.

A Forbes headline last year noted that the cost of college in the U.S. is increasing nearly eight times faster than wages are increasing. As Forbes reported,

The price of going to college has been increasing since the 1980s. According to the National Center for Education Statistics, the average cost per year for the 2015-2016 academic year was just over $19,000 for a public four-year university. The figure jumps to nearly $40,000 for a private university. These totals include tuition, fees, room and board. 

The average for all four-year institutions comes out to $26,120 per year. This brings the total cost of attendance to an astronomical total of $104,480 over four years. The comparable cost for the same four-year degree in 1989 was $26,902 ($52,892 adjusted for inflation). This means that between the academic years ending in 1989 and 2016, the cost for a four year degree doubled, even after inflation.

As we’ve also heard often the last few years, these rising costs have resulted in astronomical student loan debt. With the total now north of $1.5 trillion, student loan debt for Americans is nearly equal to the total amount of auto loan debt and credit card debt combined. There’s little doubt that the easy supply of federal funds is almost completely responsible for the catastrophic rise in student loan debt. As Kevin Williamson recently put it,

If you make a few gazillion dollars available to finance tuition payments with underwriting standards a little bit lower than those of the average pawn shop, you create a lot of potential tuition inflation. Another way of saying this is that if Uncle Stupid puts a trillion bucks on the table, there are enough smart people at Harvard to figure out a way to pick it up.

What’s even more stupid—and expensive—than a mountain of easy money from “Uncle Stupid” is for “Uncle (or Aunt) Stupid” to declare wants or needs a “right.” A parade of democrats—including many of the score-plus running for president—have now decided that education is a “right.” Of course, in a leftist’s mind, if something is a “right” then it almost always should be “free.” And of course, as I noted a few years ago, the quickest and surest way to make things more expensive for most of us is for someone in our government to attempt to make such things “free” for some.

If you think a college education is expensive now, just wait until it’s “free.” Big Education already reaps billions of dollars under the current college scam. If democrats are allowed to make college “free,” the college scam will only grow, and U.S. taxpayers will be swindled out of even more money.

Healthcare in the U.S. is the lesson here. Most of the problems with U.S. health care come down to two issues, and of course, both are the result of Big Government and the foolish idea that healthcare is a “right” and that it should often be “free.” First of all, almost no one knows what anything in healthcare really costs—including the doctors who provide it.

As Dr. David Belk, MD, notes in “The True Cost of Healthcare,”

[U]nlike any other business in America, almost all of the financial transactions in healthcare are hidden from the providers as well as the patients. We order tests, procedures and medications to manage our patients, but very few doctors, or other healthcare providers, have any idea how much any of those things cost.

As an indication of the mystery surrounding health care costs in the U.S., Belk highlights medications:

Anytime you go to a store you expect to see all of the products being sold with their prices plainly displayed. When you go to the checkout, that’s the price you expect to be charged. You also expect to be able to check the price of the same or a comparable product in competing stores so you can shop around. That’s how the free market works.

Now imagine your trip to the grocery store were more like a trip to the pharmacy. As Belk points out,

Imagine what it would be like if a grocery store never displayed the price of anything. And the price you’re charged might be totally different from the price the next customer is charged for the same product. In fact, suppose you couldn’t even pick your own groceries. A grocery list would be handed to you by a food expert and you’d be billed based on your particular ‘grocery plan.’ Eggs might cost you $5, the next person $10 and some poor guy who doesn’t have a grocery plan would have to pay $50 for the same carton. Don’t even think about shopping around.

The first issue with health care costs is a result of the second (and Belk’s analogy brings this out): the manner in which we purchase health care differs greatly from how Americans purchase any other item. The vast majority of Americans with health insurance obtain it through a Third Party Payer System—whether an employer or the government. Of course, under Obamacare, the government also has a large say in employer healthcare plans.

This is not how we purchase homes, automobiles, gas, groceries, entertainment, or even other forms of insurance. As usual, when our free-markets falter, look no further than our government. In 1960, Americans paid over 55% of their medical care costs out of pocket, while the government covered just over 21% of such costs. According to the National Center for Policy Analysis (NCPA) in 2010, for the health care system as a whole, Americans paid only 12% out of pocket. For hospital care, it was only 3%, while 97% was paid by a third party.

NCPA also notes that, “Prior to the advent of Medicare and Medicaid in 1965, health care spending never exceeded 6 percent of gross domestic product. Today [2010] it is 17 percent.” In 2019 that number is about 18%. In other words, once Big Government got deep into our healthcare industry, costs significantly increased.

Along with education and healthcare, many democrats are also now campaigning on the notion that Americans have “a right to a home” or “a right to housing” or that “having a decent and safe place to live should be…a basic human right.” According to the Huffington Post, new legislation proposed by Elizabeth Warren would increase annual spending on the National Housing Trust Fund from $200 million to $4.5 billion. That’s a 2150% increase! Of course, this massive increase would be paid for by higher estate taxes on the “super rich.”

Cory Booker wants to commit a staggering $40 billion a year to the Housing Trust Fund. According to Politico, Booker has also proposed a “Baby Bonds” plan that

would help future generations with down payments by establishing a federally funded savings account with $1,000 for every American child at birth, with future government contributions determined by income. According to Booker’s staff, that plan would give 45 percent of account holders sufficient funding for a 20 percent down payment on the national median starter home.

According to Politico, this plan would cost $134 billion a year—but almost certainly would cost significantly more—and would be paid for “by raising the estate tax and closing ‘loopholes’ that benefit the wealthy.” Of course, as with education and healthcare, a vast increase of taxpayer funds into the housing industry will do nothing to make things more “affordable.”

On the contrary, as we’ve seen with education and healthcare, the more government involvement with housing, the more expensive housing will become. This is almost always true of anything we should be responsible for purchasing for ourselves, but that politicians have declared a “right,” and certainly true of anything politicians want to make “free.”

(See this column at American Thinker.)

Copyright 2019, Trevor Grant Thomas
At the Intersection of Politics, Science, Faith, and Reason.
www.trevorgrantthomas.com
Trevor is the author of the The Miracle and Magnificence of America
tthomas@trevorgrantthomas.com

Bursting the College Bubble

With nearly twenty years of teaching experience, I have a unique educational perspective. Unlike most, I have spent a lengthy amount of time in each of the k-12 education arenas:  public, private, and homeschool. This also includes operating from a strictly secular approach, a strictly Christian approach, and somewhat of a mix of the two.

In the last few months I have linked to several columns on my website which have heralded the next debt bubble ripe to burst in the U.S.—higher education. Americans now owe more on their student loans than on their credit cards—over $1trillion.

In 2011, the average college student graduated with over $23,000 in student loan debt, with 10% of graduates owing more than $54,000. Worse still is that nearly one-third of those who borrow never graduate.

While student loan debt is often considered “good debt,” in that it leads to significantly more income over a lifetime, most recent college graduates are finding that not to be the case. According to a 2011 survey, 53.6% of bachelor’s degree-holders under the age of 25 were unemployed or underemployed—working lower-skilled jobs such as waiter, retail clerk, bartender, and the like, making little or no use of their college education. What’s more, last year Time magazine reported on a study that revealed that 85% of new college graduates are moving back in with their parents.

Of course, student loan debt is greatly due to the astronomical rise of the cost of a college education. The cost of tuition and fees has increased faster than healthcare costs. According to the Department of Education, if these trends continue, by 2016 the cost of a public college will have more than doubled in just 15 years. University of Tennessee law professor, Glenn Harlan Reynolds, in his book The Higher Education Bubble, reports that, with the easy availability of federal funds, tuition and fees have gone up over 440% in the last 30 years.

Yet, even with such dramatic cost increases, enrollment at colleges and universities continues to grow. For decades now in the U.S., a premium has been placed on a college education. In 2009 President Obama vowed that by 2020, America will “have the highest proportion of college graduates in the world.” However, some are beginning to rethink such ambitions.

The belief that almost every high school graduate should go to college is another significant factor in the looming college debt bubble. This has led to what George Will recently called “subprime college educations.” This, in turn, has led to, among other things, bloated college faculties and administrations, where, in some ridiculous cases, administrators actually outnumber faculty.

Robert Samuelson notes that in 1940, fewer than 5% of Americans had a college degree. “No more,” he notes, adding that, “At last count roughly 40 percent of Americans had some sort of college degree.”

Samuelson also notes that the increased emphasis on a college education has resulted in “dumbed down college.” Along with lower entrance requirements, sociologists and authors Richard Arum and Josipa Roksa reveal that “45 percent of college students hadn't significantly improved their critical thinking and writing skills after two years; after four years, the proportion was still 36 percent.” Thus, in addition to “subprime college educations,” we are getting “subpar” ones as well.

The emphasis on a college education in America is in spite of Bureau of Labor Statistics estimates which show that only 20% of U.S. jobs require a bachelor’s degree or more. So, given all of this mess, what is to be done?

One part of the solution is something that I have said for years, and Samuelson agrees: there need to be closer ties between high schools and the job market. Yet, as Samuelson points out, by and large in the U.S. “vocational education is de-emphasized and disparaged,” and “apprenticeship programs combining classroom and on-the-job training…are sparse.” Who earns more than a lawyer, a resident physician, or most company directors, Marvin Olasky asks. The answer: a plumber.

Another part of the solution, and this should certainly be the case within Christian education, is that all students need to understand clearly that their worth as a human being is not measured by their academic success. No matter how challenging and dynamic a school’s curriculum, engaging its faculty, or impressive its facilities, some people simply were not made to be in a traditional classroom—especially one that is college driven.

Lastly, one factor that cannot be ignored when it comes to educating children is the influence of family. In fact, it is the most important factor. As a popular columnist noted in 2010, “research suggests that about 90 percent of the differences among the proficiency of schools can be explained by five factors: days absent from school, hours spent watching television, pages read for homework, the quantity and quality of reading matter in the home -- and the presence of two parents in the home.”

In other words, “the best predictor of a school’s performance is family performance.” Until our culture addresses the sad and destructive decline of the traditional (biblical) family, school and student performance will merely reflect this decline.

Copyright 2012, Trevor Grant Thomas

At the Intersection of Politics, Science, Faith, and Reason.
Trevor and his wife Michelle are the authors of: Debt Free Living in a Debt Filled World
tthomas@trevorgrantthomas.com