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February 13, 2012
Binyamin Rose: Back to the Bunker: How a life-risking act by a Christian family during the Holocaust saved a family and built a thriving community a world away
Menachem Wecker: Business Schools Teach Real Estate Despite Troubled Housing Market
February 10, 2012
Lisa M. Krieger: Man with defibrillator demands access to his own heart's information
David G. Savage: Why activists may not be in a hurry to have High Court rule on alternative marriage
February 9, 2012
Laura McMullen: 10 Least Expensive Public Schools for Out-of-State Students
Kimberly Palmer: How to actually enjoy -- relaxing, financially -- your vacation
February 8, 2012
Warren Richey: Why momentous Prop. 8 ruling might not satisfy gay-rights groups
Menachem Wecker: Though Controversial, LL.M.'s Can Lead to Specialized Legal Jobs
The Kosher Gourmet byDana Velden: Going to the bother of making soup? You know it better be good. This CREAM OF TOMATO SOUP certainly is! And it's a cinch to make, too (Includes techinques and serving secrets)
February 7, 2012
Frank J. Gaffney, Jr.: Caught off-guard? President's Super Bowl interview with Matt Lauer gives those who need a reason not to vote for him, a darn good one
Suzanne Bohan: Leaping lizards! Tiny reptiles advancing robot design
February 6, 2012
Jonathan Tobin: Iran Threatens Israel With Destruction, But the New York Times Doesn't Hear It
Jeffrey Fleishman: In newly democratic Egypt, tens of democracy activists jailed, to stand trial; their groups are 'threatening the stability of the homeland'
Julie Deardorff : Researchers say antioxidants may not be that effective and could do more harm than good
Mark Clayton: How did Anonymous hackers eavesdrop on FBI and Scotland Yard?
February 3, 2012
Edmund Sanders : Israeli official says Iran is creating missile that could reach East Coast of US
Victoria Kim: Immigrant-smuggling ring used black drivers to avoid racial profiling
February 2, 2012
Jim Carney: Wrong number call may have saved her life
Reza Kahlili : Ex-CIA spy in Iran's Revolutionary Guard: What Obama doesn't grasp about striking deals with Tehran
Tina Susman: For woodchuck rescuer, every day is Groundhog Day
February 1, 2012
Brian Bennett: US officials see increasing threat of domestic attack from Iran
Emily Brandon: How to Take Advantage of New 401(k) Fee Disclosures
January 31, 2012
January 30, 2012
Paul Richter and Ramin Mostaghim: Misreading Teheran's limits -- deadly and economically devastating as they may be -- is a risk administration, Europe seem willing to take
Suzanne Bohan: Warning: Nap-deprived tots missing more than sleep, study finds
Meg Handley: Banks Revamping Rewards Programs to Woo Customers
January 27, 2012
Caroline B. Glick: Obama: Of course I intend to prevent a nuclear holocaust . . . in a few months
Yochonon Donn: In liberal New York City, fervently-Orthodox Jews may soon be getting a district to call their own
Jeannine Stein: An inflated ego and thinking you're 'all that' doesn't just make others sick of you, it can make you ill
Katy Hopkins: New budget rules may affect how much money you get for college
January 26, 2012
Ed Koch: To the New York Times, calling for the murder of Jews by those capable of having their incitement taken seriously isn't news
Jeannine Stein: Mental illness struck one in five U.S. adults in 2010: Report
January 25, 2012
Richard Simon: House passes two bills endorsing the use of religious symbols at military memorials
Fred Weir: Putin: Multiethnic Russia cannot survive as a US-style 'melting pot'; must find its own way
Susan Johnston: 5 Sneaky Coupon Strategies Consumers Should Watch Out For
January 24, 2012
Carol Clark: The price of your soul: How your brain decides whether to 'sell out'
Caroline B. Glick: America lost most in 'Arab Spring'. Sadly, many voters still don't grasp the extent
Warren Richey: Drug criminal scores win in GPS ruling from conservative-leaning high court
Erika Bolstad: Black conservatives gather to talk about gaining strength
January 23, 2012
Melissa Dribben: Jewish voters to play a key role in Florida's Republican primary
Jordan Rau: In quest to grow, Catholic hospital system will announce this morning its break from church
Ali Safi: U.S. envoy gives Taliban terms for peace talks
January 19, 2012
January 18, 2012
January 17, 2012
Frank J. Gaffney Jr.: No-kidding red lines: U.S. response to an Iranian nuke may be bluster, but Israel's won't be
David G. Savage: They sued their principals after slandering them online --- now the cases are headed to the Supreme Court
David Francis: Where to Invest in 2012: With stocks expected to rebound, opportunity abounds for investors
January 13, 2012
Ben Lynfield: Israeli lawmakers move to annex Jewish Judea, one museum at a time
Alexia Elejalde-Ruiz: Thriving through touch: Gentle massage helps older people with low mobility improve in mind and body
January 12, 2012
Warren Richey: Landmark Supreme Court ruling a 'resounding win' for religious groups
Warren Richey: Supreme Court says no to new rule on eyewitness testimony
John Fauber : Statins found to raise diabetes risk in postmenopausal women
Katy Hopkins : Consider This Before You Pay for an Online Degree
The Kosher Gourmet by Joseph Erdos: This mushroom and barley soup has an intense -- almost nutty -- flavor that mixes robust with Middle East. It has creaminess without cream
January 11, 2012
Shari Roan: Millions of atrial fibrillation sufferers at risk for devastating, but preventable, stroke
Tom Hussain: Pakistan -- recipient of more than $21 billion in civilian and military aid -- speeds pursuit of Iranian pipeline, defying US
David G. Savage: High court signals it won't be loosening TV's 'indecency' rules
Stephen Ceasar: Oklahoma's Islamic law amendment can't go into effect, court rules
January 10, 2012
Reza Kahlili: From an ex-CIA spy: US must exploit new split in Iran's Revolutionary Guard
Karen Kaplan: Study: Nicotine replacement products ineffective when used in real-life situations
January 9, 2012
Michael Doyle: Put through legal hell over dream home, couple fought back hard --- all the way to Supreme Court
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Jewish World Review
March 16, 2010 / 1 Nissan 5770
Not Just One Terrible Idea, But Two!
By
Mona Charen
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http://www.JewishWorldReview.com |
It's interesting that the Democrats are attempting to roll two of their highest priorities into one bill this month. The labyrinthine legislative legerdemain called health care reform now includes a reconciliation package that would fold in student loan reform. And by reform, the Democrats mean increasing direct lending to students by the federal government.
Though the two issues may seem utterly unrelated, they do have this in common both health care and higher education are realms of American life in which government has undermined the operation of market forces and caused artificially high prices. These are two arenas in which the Democrats now propose to do exactly the wrong thing. Their reform reinforces old errors and will infinitely compound the problem of rising prices.
In health care, as Andrew Biggs outlines in National Review, the third-party-payer problem (created when government made health insurance deductible to employers) has insulated consumers from the true costs of their purchases. Whereas 47 percent of health care purchases were out-of-pocket in 1960, only 12 percent are today. In addition, programs like Medicare and Medicaid are on autopilot, automatically increasing expenditures in response to demand without further appropriations from Congress. When someone else is paying, whether the federal government or the employer, consumers are heedless of cost. Have you seen the TV ads for The Scooter Store? "My scooter didn't cost me a dime!" exults a customer. "Medicare and my insurance covered the whole thing." Multiply that by several million and you have a sense of the incentives.
But the world of supply and demand, competition and price is alien to the Democrats. Their explanation for rising health care costs is the greed of insurance companies.
They don't seem to ask themselves why health care costs have risen so much faster than other costs that is, faster than the overall rate of inflation. Are health insurance companies greedier than computer makers, restaurateurs, airlines, or other businessmen? Devotees of free markets don't deny the existence of greed, but simply want to make it work for the consumer through increased competition. And that brings us to student loans.
Just by coincidence, college costs have also been rising much faster than inflation for the past several decades. Or perhaps it's not coincidence. From 1982 to 2003, health care prices increased by 195 percent. Tuition at universities increased by 296 percent over the same period. Just as government has distorted the health care market with mandates, tax exemptions, and limitless subsidies, so it has distorted the higher-education market with ever-ratcheting grants and loans.
Economist Richard Vedder, in "Going Broke By Degree," outlined the trap into which politicians continually fall.
"… America has gotten itself into a vicious cycle with respect to higher education financing that goes like this: In year 1, tuition goes up fairly substantially. Political pressures build to 'do something' about the increases. Congress expands guaranteed student loan programs to make education more affordable, in turn increasing the demand for education and allowing universities in year 2 (or year 3, depending on the lag) to raise prices further. The result is a further expansion of student loan programs, state scholarship efforts, and other third-party funding."
Between 1994 and 2005, financial aid payments increased by 11 percent per year. This huge subsidy has permitted colleges and universities to increase their already exorbitant tuitions, but has not, Vedder argues, resulted in increased quality. Administrative staffs have ballooned, undergraduate instruction has been shortchanged, and salaries for faculty have doubled since 1980. To his own surprise, Vedder also found that increasing state support for institutions of higher learning not only does not result in greater economic growth, it is actually a net loss.
President Obama proposed in February to meet the challenge of rising education costs in the following way: to increase Education Department funding by 31 percent, to $77.8 billion, and to make Pell grants a new entitlement that will automatically expand to cover the number of new students who qualify.
The United States, like other developed nations, was on a glide path toward entitlement meltdown even before Barack Obama ascended. But his acceleration of the descent has been stupefying. If the health care/student loan behemoth passes, Democrats will have combined two of the greatest follies of recent decades.
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Mona Charen Archives
© 2006, Creators Syndicate
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