Posted on 03/16/2010 7:47:35 AM PDT by SeekAndFind
Its interesting that the Democrats are attempting to roll two of their highest priorities into one bill this month. The labyrinthine legislative legerdemain called health-care reform now includes a reconciliation package that would fold in student-loan reform. And by reform the Democrats mean increasing direct lending to students by the federal government.
Though the two issues may seem utterly unrelated, they do have this in common both health care and higher education are realms of American life in which government has undermined the operation of market forces and caused artificially high prices. These are two arenas in which the Democrats now propose to do exactly the wrong thing. Their reforms reinforce old errors and will infinitely compound the problem of rising prices.
In health care, as Andrew Biggs has outlined in National Review, the third-party-payer problem (created when government made health insurance deductible to employers) has insulated consumers from the true costs of their purchases. Whereas 47 percent of health-care purchases were out-of-pocket in 1960, only 12 percent are today. In addition, programs like Medicare and Medicaid are on auto-pilot, automatically increasing expenditures in response to demand without further appropriations from Congress. When someone else is paying, whether the federal government or the employer, consumers are heedless of cost. Have you seen the TV ads for the Scooter Store? My scooter didnt cost me a dime! exults a customer. Medicare and my insurance covered the whole thing. Multiply that by several million and you have a sense of the incentives.
But the world of supply and demand, competition and price, is alien to the Democrats. Their explanation for rising health-care costs is the greed of insurance companies.
They dont seem to ask themselves why health-care costs have risen so much faster than other costs, that is, faster than the overall rate of inflation. Are health-insurance companies greedier than computer makers, restaurateurs, airlines, or other businesses? Devotees of free markets dont deny the existence of greed; they simply want to make it work for the consumer through increased competition. And that brings us to student loans.
Just by coincidence, college costs have also been rising much faster than inflation for the past several decades. Or perhaps its not coincidence. From 1982 to 2003, health-care prices increased by 195 percent. Tuition at universities increased by 296 percent over the same period. Just as government has distorted the health-care market with mandates, tax exemptions, and limitless subsidies, so it has distorted the higher-education market with ever-ratcheting grants and loans.
Economist Richard Vedder, in Going Broke by Degree, outlined the trap into which politicians continually fall.
"America has gotten itself into a vicious cycle with respect to higher education financing that goes like this: In year 1, tuition goes up fairly substantially. Political pressures build to do something about the increases. Congress expands guaranteed student loan programs to make education more affordable, in turn increasing the demand for education and allowing universities in year 2 (or year 3, depending on the lag) to raise prices further. The result is a further expansion of student loan programs, state scholarship efforts, and other third-party funding."
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I’ve been reading this part of the bill: All Federal xxx Student Loans become Federal DIRECT xxx Student Loans as of JULY 1, 2010.
Scarey thought for graduating seniors...
How can they possibly get anything working by then?
Two Terrible Ideas in One! (Folding Student-Loan Reform Into the Health-Care Bill as a Package)
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Actually, I think this is a good idea. A great idea even. Let the dumocrats add in all sorts of free gubmint cheese and even the most ignorant of hope and change voters will begin to see the obvious: That the Obama-bots are set on destroying this country.
So go right ahead. Promise us all the free pie there is.
There will be a LOT of things folded into this bill if its allowed to pass.
Almost every minute of a persons life will be affected by the HCR act, if you resist you will be subject to breaking almost any type of law they can and will add to this bill.
This is one reform that needs to be made. There needs to be a change and/or law passed that states that no unrelated Bill can be included in a Bill before Congress. If they want to do something about Student loans, let it stand on its own merits, not bury it in another bill that has no relevence.
that would be TOO simple!
I would add one thing - page limitation of 10 for any bill - so there is a prayer’s chance that it WILL be READ BY ALL!
Talk about your power grabs! If Congress passes this, each an every yes voter should be imprisoned for life!
this will give Democrats the power to slash interest, defer payments, or forgive loans in full or in part, anytime they are running down in the polls as November approaches.
The government is going to decide who can and can not go to college. Get ready for an FBI check, IRS audit and everything else the government is going to pile on to make it harder for anyone to qualify for student loans.
The government is going to decide who can and can not go to college. Get ready for an FBI check, IRS audit and everything else the government is going to pile on to make it harder for anyone to qualify for student loans.
I always found student loans to be worse from an interest rate perspective than using credit cards. I used those instead when I did not have the cash, which I usually did.
The language in the Bills also needs to be in the peoples language, not leagalize language. The Health Bill couldn’t be understood by the average person on a bet.
I am also willing to bet certain “guided” career choices will be in effect as well.
Socialism in the future America must have brilliant educated minds, socialist thinking only.
Anything else will be seditious.
I am also willing to bet certain guided career choices will be in effect as well.
Bingo. Obama’s plan is to offer you loan forgiveness on the unpaid balance after 20 years. But you get it after 10 if you choose to go into one of Michelle Obama’s “helping careers” in the public sector.
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