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04/29/2012

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Jimbino

It seems to me that one of the hallmarks of communism is that it robbed the wealth and income of everybody and impoverished the people equally.

Our brand of socialism is characterized by theft from the everybody and distribution of the proceeds to the better-off among us.

The worst institutions to practice this transfer from the poor to the rich are the national parks and forests, paid for by all, but attended only by Whites, Asians and foreigners. But the universities, like our University of Texas, manage to tax everyone and support only those blessed by wealth, intelligence and cultural advantages.

The idea that a poor Black Austin kid can call on his parents for $100,000 loan, just like a home mortgage, is a cruel joke that shows the disconnect of some ivory-tower profs from the realities of the USSA.

Ellen

One way to make college affordable would be to exempt federal income taxes on the income of college graduates (assuming they can find jobs) until they have paid off their school loans. The minimum monthly payment on the loan would then be equivalent to the federal income taxes they would owe if they did not have a school loan to repay. When their college loans were repaid, then the employees would commence paying federal income taxes.

Students and colleges would benefit and the government and our society would more than make-up for the lost tax revenue after the school loan had been repaid. The colleges and states would not lose revenue, since it is the federal government that would forgo the federal income taxes while the student loan was repaid. Additionally, colleges could reduce tuition, since they would no longer have to provide financial aid. The government could use the money currently set aside for education grants, etc. to offset the loss in income tax revenue from loan repayments. Furthermore, we would have a more educated and productive society, which would create even more revenue, innovation, jobs, and taxes.

A Facebook User

Its frustrating to me that you don't examine the purpose of a university education, and hold ours against some ideal metric. As you more or less explicitly said, demonstrated preference dictates that our system is the best among the many of the world, but then you make the leap in declaring that it is therefore good.

But logically, all that dictates is that it does an "excellent job" vis-à-vis all other educational systems, the grand majority of which are even more tightly controlled and financed by government than our own. To use an extreme but illustrative example, if every country on Earth killed their citizens, by law, at age 30, but we killed our citizens at 40, people would swamp this place. Doesn't mean we could defend our system as "good". Simply because something is "better" does not make it "good" and you seem to conflate the two here.

Terry Bennett

Clever idea from Ellen. In a similar vein, the IRS allows a lawyer to deduct the cost of attending a seminar in law, on the grounds that it is a necessary business expense to keep one's skills up. However, a high school graduate enrolling in college cannot deduct those costs, because he or she is not yet in business and thus is not considered to be incurring a business expense.

This line of reasoning is out of touch. In 2012, the reason people buy education is to make more money, period. It's a cost of eventually doing business, a basis that should be amortizable over a career that would not be possible without this initial investment.

In point of fact, the last few years have seen a market revolt against the law school business. New graduates have complained loudly at having bought a degree that suddenly looks to them as if it may not pay for itself.

I have a client who bought a boat and some crab traps, and as a result of that investment he is able to harvest and sell crabs. The IRS lets him write off the cost of those business necessities, without which he would not be able to engage in his income-producing endeavor. In my racket, a bachelor's degree, a juris doctor, and the costs of licensure (usually including a mid-four-figure bar review course) are all sine qua non, yet we have to pay for those investments with after-tax dollars.

If Congress is really worried about it, they can designate that education costs are only deductible to those under 65, or exclude the retired who are taking up a foreign language for fun - although the savings in government health care costs for such individuals might offset the loss of letting them deduct college as well.

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American universities are a home to liberal education, of which many universities all over the world try to emulate. I wouldn't want to give up on these universities.

John

Yeah, the American universities definitely have a lot of limitations. I think you have a point about bad incentives resulting in most of their failures.

Christopher Graves

First, I see nothing wrong with humor in the classroom as long as it is used judiciously. But overall I think both Becker and Posner miss the boat in their discussion this week. Here is a link to a very insightful critique of American colleges and universities by economist Peter Morici who appeared today on C-Span discussing these issues:

http://www.c-span.org/Events/Washington-Journal-quotWhy-Johnny-Can39t-Pay-His-Pile-of-Student-Loansquot/10737430406-1/

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TANSTAAFL

Surprising that the last two weeks' subjects -- financing of colleges and their students, and government subsidies for manufacturing -- haven't spurred more debate on this blog (as distinguished from the ubiquitous idiotic spam posts). Are the leftists exhausted or preoccupied with moving "Forward" as directed by the White House incumbent? Seriously, do the slogan writers for the Obama campaign not recognize the parallel to Mao's failed Great Leap Forward?

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affl, Your "Neocon" Rants are about as ubiquitous as are the "idiotic spam posts". ;)

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"Students the world over have voted for decades with their feet in favor of American universities against what is available in other countries."
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