Another Way the Rich Rob the Poor

Redstate.Com ^ | 9 May 2007 | .cnI redruM

[.cnI redruM]

If populists like John Edwards and Pat Buchanan gave a Tinker’s D—n about the poor working people in America, they would condemn our government’s student loan programs from on high. New York State Attorney General Andrew Cuomo has done his home state proud by ripping the lid off of the high-binders and grafters who pocket the taxpayer-funded swag, in manners aberrant to the current legal restrictions. What he doesn’t get after with any skill at all is fundamental dishonesty of government-subsidized overcharging.

Financial aid officers at Columbia University colluded with corporations associated with the university to steal large sums of money, on unethical stock transactions. In return for this, they threw these companies more loans. Cuomo did exactly what he should have done. He threw the book at them with condign prosecutorial malice and will take a well-earned victory lap in front of The House Education Committee.

The bad news consists of what Cuomo won’t throw anyone in jail for. Cuomo cannot lock up a bunch of malefactors who engage in moral turpitude that enjoys legal sanction. There won’t be any investigation of the fact that colleges and universities enhance their tuitions and thereby their bank accounts at a rate far above the underlying rate of inflation faced by producers and consumers in the US economy.

The loans and grants that were intended to give the common man a leg up are paying for the tuitions of the young and very privileged. In fact, almost 1/3 of the students whose parents earn six-figure salaries enjoy the benefits of financial aid. Weren’t those dollars intended for the other America?

The colleges and universities have incentives to behave badly. They receive cash up front, every time the amount of aid gets raised. It follows as no shocker that tuition increases normally follow aid increases. Neal McCluskey, a Cato Institute policy analyst, points out the extent to which these high-minded centers of learning get down and wallow in the political money troughs.

“According to the Center for Responsive Politics, education interests spent over $80 million lobbying federal policymakers last year.”

And how has this investment of political capital paid off? McCluskey elucidates.

“From 1996 to 2006, the College Board reports, the average, inflation-adjusted, per-pupil cost of tuition, fees, room and board rose 28 percent at four-year private schools and 38 percent at four-year public ones. Meanwhile, inflation-adjusted aid provided through federal programs rose 95 percent, from $48.3 billion to $94.4 billion.”

The lobbyists average a return on investment of 5,763%, assuming the $80 million is a constant expenditure, over the last ten years. Thus, it doesn’t come as a surprise that a lot of student aid goes to people who have a moral obligation to give to charity, not partake. Some of the families receiving student aid should be offering the less fortunate a hand up, not bilking the middle class taxpayer for a handout.

Unlike the corruption unearthed by Andrew Cuomo, no one will do a day of time in jail. It will only be encouraged to rage on unabated. Our citizens believe they have voted themselves rich, at someone else’s expense.

A college degree-holder will earn, on average $1 million over the course of their career. A debt-holder leaving Old-Ivy $30,000 in debt, will only need to pay roughly 9% of their annual salary to amortize the loan in twenty years. This assumes a moderately benign interest rate, so that the borrower pays about $60,000 total over the 20 years.

Thus, working class families get taxed to send upper middle class and wealthy families through college on aid packages. With this flagrant example of one America sticking it hard to the other, I can’t help but wonder where Lou Dobbs and Senator Sherrod Brown have been hiding on this one.

But no, our champions of the common man never stand tall on an issue that where they have to climb athwart the sound-bite demagogues. If it can’t be explained in a 20-second blurb, none of our modern Magister Plebes will touch it. We have to save America’s working classes. Who else will we tax when we want someone else to pay our college tuitions?

[par4]

gave a Tinker’s D—n

What's wrong with authors and editors these days? Can't we expect that someone, somewhere, is familiar with figures of speech?

It's a tinkers dam, a temporary dam used to contain molted metal that is destroyed right after use, hence of little value.

About time that these people learn to tow the line /sarc.

[LexBaird]

Doubtful. Student loans are “long shot bets” in the same way that public education is something of a long shot bet.

Depends on the "bet". I'd imagine you could get a loan for medical, law, or engineering degrees. Ethnic studies? Not so much.

[.cnI redruM]

>>>Student loans are “long shot bets”

Hardly. If colleges are able to vet potential applicants before they arrive on campus, a loan officer has the same capability. Car insurance companies do this all the time. Ever noticed how students with higher GPAs get lower rates?

>>>>Stem Cell research banned altogether? You may not be aware of this, but more stem cell research happens in the US than in the rest of the world combined. Embryonic Stem Cell research receives no Federal Funding. That means if a research institution forewent Federal support, they could work on embryonic stem cells all day long, and no one could lay a finger on them.

>>>Need new engineers? India’s got’em and so does China

Oh, and guess where most of them are trained?

[B4Ranch]

"Understanding Tax Cuts"


Sometimes politicians, journalists and the liberal left exclaim;
"It's just a tax cut for the rich!" and it is just
accepted to be fact.

But what does that really mean?

Just in case you are not completely clear on this issue, I hope the
following will help. Please read it carefully.

Let's put tax cuts in terms everyone can understand.

Suppose that every day, ten men go out for dinner and the bill for
all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something like this:
The first four men (the poorest) would pay nothing.

The fifth would pay $1.

The sixth would pay $3.

The seventh would pay $7.

The eighth would pay $12.

The ninth would pay $18.

The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men ate dinner in the restaurant every day and seemed quite
happy with the arrangement, until one day, the owner threw them a curve.

"Since you are all such good customers," he said, "I'm
going to reduce the cost of your daily meal by $20." Dinner for
the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so
the first four men were unaffected. They would still eat for free.
But what about the other six men - the paying customers? How could
they divide the $20 windfall so that everyone would get his 'fair
share?'

They realized that $20 divided by six is $3.33. But if they
subtracted that from everybody's share, then the fifth man and the
sixth man would each end up being paid to eat their meal.

So, the restaurant owner suggested that it would be fair to reduce
each man's bill by roughly the same amount, and! he proceeded to
work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).

The sixth now paid $2 instead of $3 (33% savings).

The seventh now paid $5 instead of $7 (28% savings).

The eighth now paid $9 instead of $12 (25% savings).

The ninth now paid $14 instead of $18 (22% savings).

The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four
continued to eat for free. But once outside the restaurant, the men
began to compare their savings.

"I only got a dollar out of the $20," declared the sixth man.
He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only
saved a dollar, too. It's unfair that he got ten times more than me!"

"That's true!!" shouted the seventh man. "Why should he
get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison.
"We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for dinner, so the nine
sat down and ate without him. But when it came time to pay the bill,
they discovered something important. They didn't have enough money
between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how
our tax system works. The people who pay the highest taxes get the
most benefit from a tax reduction. Tax them too much, attack them
for being wealthy, and they just may not show up anymore.

In fact, they might start eating overseas where
the atmosphere is somewhat friendlier.

[the OlLine Rebel]

Almost, but not quite.

Those jobs wouldn’t be “lost” if there was NO MINIMUM WAGE REQUIREMENT.

[the OlLine Rebel]

That is a damn wonderful analogy!

Where did you find this?

[Capt. Tom]

This isn't socialist drivel. It is a call for the government to get out of the business of subsidizing financial aide to children whose parents earn 6 figures.

What happens when a multi millionaire's son makes the case his rich father is not going to pay for his son's education, and the son needs the money to go to school,because dad doesn't support him? - tom

[dakine]

“In fact, almost 1/3 of the students whose parents earn six-figure salaries enjoy the benefits of financial aid. Weren’t those dollars intended for the other America?”

Aren’t most college students 18 years or older? What the heck does the income of their parents have to do with financial aid? Last time I checked, 18-year-olds were adults.

[B4Ranch]

IIRC one of my investment advisors emailed it to me.

[.cnI redruM]

It shouldn't have anything to do with financial aid.

[.cnI redruM]

You know what that argument reminds me of, the health and welfare of the mother argument in favor of abortion procedures. If Sonny is on the splits with Dad, and has no way of say, joining the military or landing a job to pay for his education, he should, perhaps, give Dad a call....

[BfloGuy]

gave a Tinker’s D—n

The expression is a "tinker's dam"; it has nothing to do with cussing.

[KoRn]

Nice story and analogy!!

That one’s a keeper.

[NCLaw441]

You said:You could eliminate the student loan program tomorrow, and there’d be an influx of US banks that would gladly make the loans.
***

These are unsecured loans, without guarantors. None of the banks I represent would lend at reasonable rates for the amounts we are talking about without collateral or co-makers of some sort. Further, govt loans can’t be discharged in bankruptcy. So, I disagree with this point. As to whether the government ought to be in the business of making loans, I look forward to that discussion.

[Cogadh na Sith]

I made it to here: "If populists like John Edwards and Pat Buchanan gave a Tinker’s D—n"

'A Tinker's Dam' is not a swear word. It's a euphemism to avoid swearing.

I wouldn't trust anyone on their political opinions when they misuse a common phrase: I don't give a g-sh d-rn what they say after something that d-mb....

[MEGoody]

It is a call for the government to get out of the business of subsidizing financial aide to children whose parents earn 6 figures.

Government should get out of the business of subsidizing financial aide to all children, regardless of what their parents make.

[from occupied ga]

It is a call for the government to get out of the business of subsidizing financial aide to children whose parents earn 6 figures.

I didn't understand I guess. Should the government not finanace any, or just stop financing the ones with rich parents?

[.cnI redruM]

They should only finance, when they get something in return. A GI Bill deal, or a contractual arrangement to teach LD children in low income school districts, or something else of the sort. I tend to think the way it works now, it’s just become a racket to funnel nearly unlimited funding to colleges and universities.

[RobbyS]

The rich can almost always look after themselves. But as Fred Thompson said the other day, when the Democrats get after the rich, the middle-class should not stand too close to that target. The redistributors always manage to do a better job of redistributing the wealth of the near-rich, the upper-middle class, or even the middle middle class than the wealth of the Soroes or the Buckleys.

[B4Ranch]

You are certainly welcome to use it.

I think I have posted it to KarlInOhio before this.