CI#2: Presidental Candidates

A civic issue that has been in the news recently is how to make college more affordable?  One presidential candidate, Bernie Sanders, has been claiming to make college free for everyone.  How would this work? And what are the issues  with such a statement? 

According to Bernie the US is being crippled by the fact that not everyone is able to go to college.  He says it is the best interests of the United States as a whole to invest in the future... which is the next generation of workers.  Along with many people not attending college because of financial reasons, many student graduate college with mountains of debt.  The financial burden of college is carried with many students for years and even decades. 

The question is when you dig deeper into Bernie’s policy proposals what is in their.  How are things paid for, how do you qualify for free college?  Not everyone qualifies for free college under Bernie’s plan, on those from low-income families. 

The controversy arises as always with the question of money.  What will Bernie do to fund this idea and what will be the consequences?  On the Bernie Sanders webpage he has a whole section dedicated to showing how much each of his proposed ideas cost and how he proposes to pay for them.  For his proposal of subsidizing and socializing higher education he has tagged it with be paid for by a tax on Wall Street Speculation-which he says will raise 300billion a year. 

What this tax does is it reduces the tax break that wall street and banks receive for incurring risk.  When a bank gives a loan their risk is the possibility they will not get back the money they loaned.  Incurring risk is how the economy grows; there is no risk free investments (the closest thing is government backed bonds).  So what this tax will do is tax every single person that has any form of investments in the stock market, bond market, or derivative markets. 

This is a clever way to increases taxes on everyone except the lower class who have no money to invest.  Sanders regularly champions the fact that he is taking from the RICH(only the rich) and giving to the poor and middle class, this is not the case.  He is raising taxes on everyone is ways that are just not commonly known.  Taxes like income tax will be reduced for the middle and lower class, but these tax breaks will surely be made up through other taxing programs, started by Bernie. 

If you go to Sanders website and look at how he plans to pay for his policies you will find a bevy of programs that will strengthen the government and IRS hold on the people. 

Also as education is concerned, in an economic sense supply determines demand.  What happens when the number of individuals in the work force with a college education go up.  The value(Demand) of that education goes down.  It is not true that more educated people will lead to more jobs.  There is a fixed number of jobs and those are created by the people Bernie is going to hurt the most with his policies. 

Unfortunately, the proposals Bernie makes all sound great, but we do not live in a utopia things do not work as well in practice as they do in theory. 

There are things that can be done to reform education but the drastic measures of making is relatively free is not the way to go.  The place for reforming higher education should be on reforming the student loan program.  The US government profited over 110Billion dollars in recent years on student loans.  Student loans should have a reduced interest rate.