dThe Rising Tide Of Education Subsidy - Road to the Middle Class - by Christopher Chantrill
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The Rising Tide of Education Subsidy

by Christopher Chantrill
July 22, 2007 at 12:00 am

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A RISING tide lifts all boats. That’s what President Kennedy said in a happier time when he lowered tax rates.

But what about the rising tide of education subsidies? Last week the House of Representatives passed the College Cost Reduction Act of 2007 by a vote of 273-149.

"This bill is a remarkable step forward in our efforts to help every qualified student go to college," said Rep. George Miller, D-Calif., chairman of the education and labor committee and author of the legislation, in a statement. "With this bill, we are saying that no one should be denied the opportunity to go to college simply because of the price."

The bill increases Pell Grant limits, provides that graduates won’t have to pay more than 15 percent of discretionary income in repayments and provides loan forgiveness for certain “public servants” after ten years and for everyone after 20 years. This will all be paid for by a reduction in subsidies to student loan lenders.

Of course, with more money sloshing into colleges there’s a risk that some colleges might increase tuition. The bill’s sponsors have thought of that. Here’s how Yahoo’s Anya Kamenetz describes their plan:

Starting in 2011, any college with high, outlying tuition increases would have to submit a report to the education secretary explaining why. After two consecutive years, the college would be placed on “affordability alert status.”

It doesn’t take rocket science to see where all this will end up. It will encourage people to minimize payments on their student loans. It will encourage twentysomething slackers to put off the day when they grow up and get a real job. The reduction in subsidies to the student loan industry will wash through into higher payments for students. And the “affordability alert status” is a joke.

The beautiful thing about subsidies, from the point of view of an experienced political practitioner like Rep. Miller, is that they make people more dependent on the government. When you jack up the price of college with subsidies then more and more people find that they have to turn to the government for help in paying for their education.

Eventually the rising tide of subsidy puts everyone out of their depth.

It’s the system that FDR set up in the 1930s, as Amity Shlaes points out in The Forgotten Man: A New History of the Great Depression. Politics had always catered to interest groups, of course.

“But Roosevelt systematized interest-group politics... to include... labor, senior citizens, farmers, union workers. The president... ministered to those groups, and was rewarded with votes.”

Schlaes observes that Roosevelt’s great landslide of 1936 was the year that peacetime federal spending first exceeded state and local spending. It was that fateful year that created the entitlement state and the central reality of politics today.

While Rep. Miller is flooding higher education with more subsidies teacher Nancy Coppock of Texas reminds us millions of students are out of their depth when it comes to basic literacy. Yet more money is not the answer.

 “Teaching reading is practically free. I used [a] class set of paperback young adult literature which cost between $75 to $125 per set, which were used year after year. The true value came from my own heart and soul.”

As a special-ed reading teacher Nancy has a more down-to-earth view of education than Rep. George Miller.

“[T]he best thing I could do for mid- to below-average students, many minority and poor, was to make sure they could read to the best of their ability.”

The crisis in education is not that price is scaring kids away from college even though, to a member of the academic middle class, life without a college education is scarier than a Stephen King novel.

The crisis is not even the scary education spending numbers for 2007 from usgovernmentspending.com:


United States Federal, State,
and Local Government Spending
Fiscal Year 2007

Amounts in billions of dollars

Fed Gov.
Xfer
State Local Total
Education 103.4 -86.6 234.0 541.6 792.3
— K-12 40.0 -86.6 7.0 509.4 469.8
— Higher 23.9 0.0 208.9 32.2 264.9
— Other 39.5 0.0 18.1 0.0 57.6
Spending: actual, budgeted, estimated, guesstimated

The crisis is that the government spends $469.8 billion on K-12 education every year yet millions of mid- to below-average students don’t ever learn to read.

You can’t help feeling that somewhere out there in that $792.3 billion-a-year EducationLand someone just doesn’t care about kids.

Christopher Chantrill blogs at www.roadtothemiddleclass.com.

Buy his Road to the Middle Class.

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Faith & Purpose

“When we began first to preach these things, the people appeared as awakened from the sleep of ages—they seemed to see for the first time that they were responsible beings, and that a refusal to use the means appointed was a damning sin.”
Finke, Stark, The Churching of America, 1776-1990


Mutual Aid

In 1911... at least nine million of the 12 million covered by national insurance were already members of voluntary sick pay schemes. A similar proportion were also eligible for medical care.
Green, Reinventing Civil Society


Education

“We have met with families in which for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.”
E. G. West, Education and the State


Living Under Law

Law being too tenuous to rely upon in [Ulster and the Scottish borderlands], people developed patterns of settling differences by personal fighting and family feuds.
Thomas Sowell, Conquests and Cultures


German Philosophy

The primary thing to keep in mind about German and Russian thought since 1800 is that it takes for granted that the Cartesian, Lockean or Humean scientific and philosophical conception of man and nature... has been shown by indisputable evidence to be inadequate. 
F.S.C. Northrop, The Meeting of East and West


Knowledge

Inquiry does not start unless there is a problem... It is the problem and its characteristics revealed by analysis which guides one first to the relevant facts and then, once the relevant facts are known, to the relevant hypotheses.
F.S.C. Northrop, The Logic of the Sciences and the Humanities


Chappies

“But I saw a man yesterday who knows a fellow who had it from a chappie that said that Urquhart had been dipping himself a bit recklessly off the deep end.”  —Freddy Arbuthnot
Dorothy L. Sayers, Strong Poison


Democratic Capitalism

I mean three systems in one: a predominantly market economy; a polity respectful of the rights of the individual to life, liberty, and the pursuit of happiness; and a system of cultural institutions moved by ideals of liberty and justice for all. In short, three dynamic and converging systems functioning as one: a democratic polity, an economy based on markets and incentives, and a moral-cultural system which is plural and, in the largest sense, liberal.
Michael Novak, The Spirit of Democratic Capitalism


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The incentive that impels a man to act is always some uneasiness... But to make a man act [he must have] the expectation that purposeful behavior has the power to remove or at least to alleviate the felt uneasiness.
Ludwig von Mises, Human Action


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[In the] higher Christian churches... they saunter through the liturgy like Mohawks along a string of scaffolding who have long since forgotten their danger. If God were to blast such a service to bits, the congregation would be, I believe, genuinely shocked. But in the low churches you expect it every minute.
Annie Dillard, Holy the Firm


Conversion

“When we received Christ,” Phil added, “all of a sudden we now had a rule book to go by, and when we had problems the preacher was right there to give us the answers.”
James M. Ault, Jr., Spirit and Flesh


Living Law

The recognition and integration of extralegal property rights [in the Homestead Act] was a key element in the United States becoming the most important market economy and producer of capital in the world.
Hernando de Soto, The Mystery of Capital


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