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Of College Tuition and Cheeseburgers

Wednesday, November 13, 2013

College tuition increases for this academic year were small by recent standards. But students and families are nonetheless paying significantly more on average because federal financial aid, including grants and tax credits, failed to keep pace.

–       The Oregonian, October 22, 2013

Lane Solutions Responds and Your Comments

There’s an “Iron Rule of Economics” that you probably know but that politicians either don’t know or don’t care about (after all, it’s not their money they’re spending), Here it is: subsidize the cost of anything and demand for it and the price of it will go up. Every time – just like water running downhill and government sticking both hands in your pocket.

Here’s a simple example. A cheeseburger at McDonald’s costs $1.00. If someone stood outside  every McDonald’s holding a sign saying “I’ll give you $.50 if you buy a cheeseburger” what would happen?

The line of cheeseburger buyers would lengthen and McDonald’s would raise the price to $1.30.

Each year the Feds pour $30 Billion and 16 tax breaks into helping parents pay tuition. And sure enough – tuition goes up. So do binge drinking and drug use on campus, partially caused by kids lining up for four plus years of financial aid and fun.

What goes down? Not adult illiteracy. And certainly not tuition.

Here’s another iron rule: When politicians create a program that doesn’t work they don’t cancel it. Heck no – they double down. So their answer to rising tuition is always more subsidies, which cause tuition to rise, which calls for more subsidies…

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