“Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”– Milton Friedman
Whatever else Obama studied at Accidental University, it wasn’t economics.
If it had studied economics, he’d understand that the more the federal government throws money at higher education, the higher the costs are going to go.
The College Board recently released statistics that bear this out.
During the Slight Depression of ‘09 and ’10, when deflation was the problem, state and private universities saw “the largest one-year percentage increase in the constant dollar published price for tuition.”
Published prices climbed almost 6 percent in the 2009-2010 school year over the 2008-2009 period.
We know baby. We all feel a little molested by Obama
“Over the past five years,” writes FoxNews, “the tuition sticker price at public four-year colleges is up 27 percent beyond overall inflation, according to a College Board survey. At private schools, the average student’s cost has risen 13 percent beyond overall inflation.”
The culprit is the huge increase in government money made available to students, regardless of their ability to pay back the loan.
Obama created a kind of subprime loan for kids to young too know the difference.
Remember all those Internet ads that told us “Obama wants you to go back to school”?
Obama made a big pile of cash available to wannabe students through direct loans, Pell Grants, work-study programs and tuition tax credits, to… ahem… “low income” families through the stimulus program that brought record college enrollment.
The “low-income” limit to qualify for the tuition tax credit was $80,000 for single filers; $160,000 for joint filers.
Under this definition apparently 90 percent of American families qualified as low income.
“The number of students applying for financial aid increased by 10.5 percent this past year,” Mark Kantrowitz, publisher of a website devoted to student aid issues, said in 2009. “That’s a record increase. That’s 1.4 million additional students.”
So, anywho…yes, tuition prices went up; way up.
Supply and demand, remember?
But here’s the most astonishing thing. I swear you won’t believe it.
Obama says that he wants to fix the mess he made.
“Even as we put more money into the Student Loan Program,” said a teleprompterless Obama in 2010, even as tuition was booming, “we are also trying to reach out to university presidents and administrators to figure out how can we reduce the inflation in higher education — because the fact is, is that the only thing that has gone up faster in cost than health care is — guess what. Higher education. And the problem is, if we’re not thinking about ways to curve the inflation, then even if we put more money in, what that money is buying becomes less and less. And so trying to find creative ways for universities to do more with less is going to be important.”
More money equals more costs, which means that universities are going…to…have to…find…huh?
I guess that what happens when a community organizer tries to explain economics to subprime student loan victims.
Well then, let’s just fast forward to today and look at what he’s come up with to “curve” those costs after consulting with university administrators.
“The average student who borrows for college now graduates owing more than $26,000. Some owe a lot more than that,” Obama told students in Buffalo yesterday. “It becomes hard to start a family and buy a home if you’re servicing $1,000 worth of debt every month. It becomes harder to start a business if you are servicing $1,000 worth of debt every month, right?”
Right, Mr. President. So what are you gonna do about it?
“We need to rate colleges on best value so students and taxpayers get a bigger bang for their buck,” he said.
“We need ratings not rankings to give students some guidance about which colleges are producing value,” one senior administration official speaking on background before the speech told the UK’s Guardian.
But what about inflation? What about the trillion dollars in student loan debt students have?
Did they disremember what this speech was about?
Costs and interest rates and money supply apparently don’t fit into inflation calculations when you’re community organizing, not economizing.
So prepare for college costs to rise, not fall, and prepare for the final, federal takeover of college education.
Because one thing about liberals: Once they get a bad idea in their head, like “saving money”, there’s no stopping them until they impose it on everyone else.
Regardless of cost.