Move Over, Obamacare.Here Comes ObamaSchool

[NightFox]

Interesting article on the next great idea from the geniuses in Washington to destroy the U.S. Higher Education education system by "reforming" it. The never ending desire of the state to systematically destroy that which was originally created by voluntary exchange never ceases to amaze, just another example of the states insistence on pursuing the methodology of "If it ain't broke, break it and keep breaking it until it gets so broken you can justify a 'take over' by the state".

Source: The Ludwig Von Mises Institute
Date: 8/30/2008
Full Article: Move Over, Obamacare. Here Comes Obamaschool - Hunter Lewis - Mises Daily

The president gave a speech on August 22 in Buffalo outlining his proposal to “reform” the student loan program. He acknowledged that the program has some problems, but assured the audience they are easily fixed. Just take the principles behind Obamacare and apply them to education. The president personally “guaranteed” that his proposals would make college more affordable.

Here’s the plan. The government will rate colleges based on fees (the lower the better) and graduation rates (the higher the better) and student success in finding a job. Then student loan funds will be allocated to schools according to the rating. Students will also be guided to the best-rated schools via government web sites. And schools will get more funding if they set up demonstration projects to reduce costs. This will all encourage more “competition” among schools. Yes, you heard that right: more government control of colleges will increase market “competition.”

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There is a lot more in common between Obamacare and Obamaschool than these superficial characteristics. Obamacare came into being because of a crisis in medical care. As usual, that crisis had been caused by earlier government interventions in medicine, especially price controls. At present, Medicare price controls about 7,500 medical procedures. Because payment varies by location and practitioner (e.g., doctors employed by hospitals get paid more than other doctors), it has been estimated that Medicare price-controls six billion medical transactions at any one time. As government has come to dominate medicine and price-control it, prices have inevitably risen at a rate that threatens to bankrupt the economy. Obamacare has doubled down on the price controls, mandating allowed price increases under Medicare and installing a price control board. All of this will no doubt lead to the kind of legislation recently passed in Massachusetts where any “material” change in a medical practice, in either prices or services, must be approved by the state.

Obamaschool is coming into being for similar reasons. In this case, the government set up a student loan program which was ostensibly designed to subsidize students. But whenever government subsidizes demand without increasing supply, prices inevitably rise, and this was no exception.

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Obama was more than a bit mendacious about this debt burden. He took credit for keeping student interest rates down. He even said that “government shouldn’t see student loans as a way to make money; it should be a way to help students.” But the reality is that his administration is currently borrowing money at negligible interest rates and then relending it to students at much higher rates. The difference is booked elsewhere in the federal budget under “deficit reduction.” If that isn’t a clear case of using student loans as a way to make money, then what is?

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The president’s specific proposals for student loans will have some other presumably unintended effects as well. If schools get more federal money as their graduation rate increases, they will simply stop taking students who are more likely to drop out. That of course means they will stop taking disadvantaged students who need help the most.

The administration says that it will get advice from schools in devising the rating system. This is all we need: closed door meetings in Washington between the government and special interests with the consumer excluded. This is exactly how Mussolini ran Italy and Roosevelt tried to run the U.S. with the National Recovery Act. The results of dismantling a consumer-driven market economy will be no better now than they were then.

Emphasis added

 

[Mac1958]

.

We can always trust our Great & Glorious Leaders In Central Planning&#8482;.

They always know what is best for us.

And they care.

.

 

[Katzndogz]

Major business is already indicating a move away from reliance on paper degrees and instituting tests of their own. They will no longer trust college degrees.

 

[THORAX]

I don't much like the idea of forcing schools to fight for food, especially at the hands of the government, but something needs to be done about higher education because as it stands a majority of people are being left out in the cold.

If the govt and people in general is steering us into becoming a college educated society, then college needs to be as accessible as public schools.

I'd be interested to hear what my brothers and sisters on the right think should be done about reforming higher education. Personally, I think it should be tax payer funded and incorporated into the public education system so that EVERYONE gets to go to college.

 

[NightFox]

I don't much like the idea of forcing schools to fight for food, especially at the hands of the government, but something needs to be done about higher education because as it stands a majority of people are being left out in the cold.

Nobody is being left out in the cold (with student loans, grants, scholarships and community college availability pretty much everybody has access to higher education right now), the problem is that students are being saddled with mountains of debt because thanks to federal government intervention so much money is being injected in the higher education system the prices are going through the stratosphere, what the President is proposing will likely not only exacerbate this situation but cause additional negative unintended consequences as well.

Personally, I think it should be tax payer funded and incorporated into the public education system so that EVERYONE gets to go to college.

First off not EVERYONE wants or should go to college, secondly why should it be incumbent upon other people to pay for everyone Else's children's higher education? isn't it bad enough that people that don't have children or that send their children to private schools are forced to pay for the existing (and by many measures failing) public schools?