“Progressive” Economics

Saw this awesome video, and I thought I’d add to it.

College, like Health Care will never be “Free” because they all must be services rendered by a skilled professional. What I’m sure Julie is aware of, but didn’t feel to delve in is what the cost of government involvement is.

She cites from this article:

According to a White House press release on Friday, the America’s College Promise plan would “make two years of community college free for responsible students, letting students earn the first half of a bachelor’s degree and earn skills needed in the workforce at no cost.”

The plan may involve no costs for students, but taxpayers are a different story. The White House estimates that the plan could save as many as 9 million students about $3,800 annually, which translates to an annual cost of about $34.2 billion.

That 34 Billion number was simply done by multiplying the number of students by the estimated cost to be subsidized by tax payers. But it isn’t that simple, as running any sort of program costs money as well.

There are a few examples of stuff like this already working. Look at Health Care. Since the massive overtaking of health insurance in this country, insured people don’t actually PAY for their health care. For somebody like me the actual health care is “Free”, I just pay my insurance company (though the help of my employer) to be covered, and pay a “usage fee” in the form of co-pays when I actually engage their services.

Now if I wasn’t ensured I could negotiate with my doctor what an exam or procedure would cost, have that done, and then pay cash and be done. With Health Insurance my employer has people who manage the group accounts, the insurance company has people who run the account, and the doctor has employees who manage collection of the fees from the provider. All of that costs a very non-trivial number. Further the doctor has no incentive to give me his fairest price, or compete with the office across the street as far as price goes, because I don’t know or care what an exam or procedure costs unless I look at my insurance statement. Either way there is negotiation between the doctor and insurance company (either on accepted rates, or individual services) so whatever number is on my statement is artificial anyway.

Same goes for charities. Your buddy’s house burns down and he asks you and all his friends to help him out. You pay him and the money goes into his pocket. Now many charities work with volunteers, but bigger groups will have some paid management staff, plus overhead costs for fundraising and distribution of goods and services.

Either way the more people that get involved between a simple transaction the more money is lost, and just like the professor at the college isn’t going to giving lectures and grades for free, the people who are collecting and distributing tax monies for subsidized schools aren’t going to do it for free. Further the government is well known for hiring 10 people to do the job of 3, and giving them good benefits and retirement.

And that isn’t going into the people who will be urged by the system to go to “free College” when they have no buisness and/or no interest in getting a higher degree, causing increased demand on the system to be paid for by schools raising rates to build new classrooms and hire new instructors, and the .gov side needing more people to manage the system.

So really the $34 billion price tag is a rock bottom estimate!

BUT FREE!!!!!!