Bar Stool Economics

[picklesuit]

There are two ways to look at everything. You don't think kids should be "punished" for having poor parents...I don't think kids should rewarded for having poor parents.

If you want the money for school, earn it. Do your time serving in some capacity.

And just to be clear, I don't look down on kids that take .gov grants. They're looking out for #1. I just don't think it should be an option.

I think you missed my point entirely. The Pell grant is not a reward, it is an investment by the government. They are not stoopid on this one, they know they will see that money back.

As far as earning money for school...I would argue that the majority of college students are not paying for their school out of something they earned.

They are either attending on the dime their parents earned, or on a bet by the loan/credit companies on the money they will earn in the future (how I went) or on a scholarship provided for services they will render in the future (educators/military). They will have their education before they have earned anything. That goes for the ROTC/Academy/BDCP guys as well. When you graduate from the school, you haven't earned anything yet...but you are expected to pay it back by your service over the next 4-10 years (kind of like a loan, isn't it?)

I hate to say it midn09, but you have yet to earn anything yet that you have received...you are still in school (according to your profile) That means my taxes are paying your scholarship right now, and as an investor I am betting that you don't Shrute it up by getting a DUI in primary or getting NPQ'd in a waterskiing accident or attrited for poor performance. Unfortunately guys do that here almost every week...and many of them don't have to pay back their scholarship. Sometimes I lose that bet.

 

[Spekkio]

And if you get rid of BS government programs like welfare, then the government won't have to worry about investing in people so that they don't have to pay for their substinance, or worry about using an entire military installation to paint and clean people's private homes.

 

[scoolbubba]

substinance...

is that like abstinence, but more fun?

 

[Picaroon]

I've always been in favor of this as well. The military is the only .gov organization that I can think of that does an 'education for work' type of 'scholarship.' I agree that Pell grants- and most other government handouts- should be done away with (Adam Smith is my hero). Can't afford school? Cool, the state will pay for it in exchange for you teaching in a K-12 school for 4 years after you graduate.

If Adam Smith is your hero you probably know a fair amount of economics.

If you do, you know about market failures. Education is a market failure in the form of a positive externality. There are societal and economic benefits to education outside of the direct supply and demand price that it would cost without any government intervention. Part of the government's role is to correct such an externality.

 

[HueyCobra8151]

So why the fuck should I get punished because my parents sucked at life?

You aren't being punished or rewarded. You are simply living according to the circumstances outside your control.

I grew up poor and I graduate in December without any debt or obligation for my tuition. It just is what it is - either you suck it up and overcome, or you let the statistics claim another victim and get a crappy job in the same crappy neighborhood you grew up in.

Except for a few family history's out there, almost everyone in America can trace their lineage back to some point when their family was poor and underprivileged, but someone, somewhere along the line got their crap together, made some money, and passed it down successfully through their lineage.

As far as earning money for school...I would argue that the majority of college students are not paying for their school out of something they earned.

The level of douchebaggery present at most major institutions validates your argument. God I hate these d-bags who walk around with an undeserved sense of entitlement.

 

[BACONATOR]

God I hate these d-bags who walk around with an undeserved sense of entitlement.

So you mean.... 99% of kids/people under 21?

 

[CommodoreMid]

I see your point about the Pell being a government investment in the workforce, and in my post where I argued for its elimination I did point out that a higher educated workforce definitely benefits our economy and society, but I figure if my tax dollars are going to finance someone's education, I want a pretty good assurance that this person is likely going to give something tangible back to the taxpayers. Yes, they may be less likely to be a burden on the government and more likely to have a well-paying job, etc., but I don't this those likelihoods are enough. I want to see someone who gets taxpayer dollars actively give back to the government. With ROTC scholarships you aren't always going to get your money's worth 100% of the time (as has been pointed out with DORs, attrites, etc.) but I think the enforced service is what's needed.

 

[navy09]

I think you missed my point entirely. The Pell grant is not a reward, it is an investment by the government.

My point is that being poor, IMO, doesn't entitle you to taxpayer money to go to college. That's not how I'd choose to invest my money, and not how I'd like my tax $$$ to be 'invested.'

I would argue that the majority of college students are not paying for their school out of something they earned.

Well if someone has a rich daddy to pay for school, good for him. It doesn't cost me a cent, and it's his business how he spends his money.

...on a bet by the loan/credit companies on the money they will earn in the future (how I went)...

Trivial point, but even private loans are generally insured to some extent by the federal gov and in many cases they incentivize the process to encourage private lenders to lend to students. So the lender is betting my tax dollars that you'll pay them back.

They will have their education before they have earned anything. That goes for the ROTC/Academy/BDCP guys as well. When you graduate from the school, you haven't earned anything yet...but you are expected to pay it back by your service over the next 4-10 years (kind of like a loan, isn't it?)

Nope. The crux of your argument seems to be that gov (tax $) loans are OK, because we will, someday, somehow, possibly "get that money back." Service commitments are much more concrete [in terms of return on investment to the taxpayer]<EDIT.

+1 to Picaroon for bringing up the topic of positive externalities resulting from education. I don't have the knowledge of economics or the raw data to give you a figure to prove that the cost of federal loans is greater than the payoff, but I suspect it is.

 

[picklesuit]

Nope. The crux of your argument seems to be that gov (tax $) loans are OK, because we will, someday, somehow, possibly "get that money back." Service commitments are much more concrete [in terms of return on investment to the taxpayer]<EDIT.

I hate to tell you this but your 4 years of college tuition are not a "reward" for you signing a contract in the military. It is an investment by the military in your education so they can provide college graduate officers to the training pipeline.

The investment by the taxpayer is much greater after your degree is finished...$1.5 million for a winged aviator.
The taxpayer has agreed that this investment is justified by the security you will provide for the next 8 years (minimum)...there are people who would argue against this investment as well, saying they would never "get a return on their investment" (I would call those people idiots)

I believe that the investment in the Pell grants is at a much lower level...there will be about 5.6 million grants given FY 2008, at an average of $3,000/student
http://www.ed.gov/programs/fpg/funding.html

So over a 4 year span the average amaount a person could receive is approximately $12,000.

At a median salary rate of $43K/yr for a person with a Bachelors Degree http://nces.ed.gov/fastfacts/display.asp?id=77
and at the marginal tax rate a person will pay approx. $4800 in taxes/yr.
http://www.dinkytown.net/java/TaxMargin.html

So they will pay off that 4 years of assistance in 3 years of work. Sounds like good investment return to me.

 

[navy09]

<silly math>...So they will pay off that 4 years of assistance in 3 years of work. Sounds like good investment return to me.

Wow...well, there are two problems with that argument:

a) Not a huge deal, but given your argument you'd have to measure the marginal tax revenue for the gov from the Pell grant recipient. He would be paying taxes anyway, how much more does he pay with his higher B.A. salary? It's not nearly as much.

b) You will never "pay back" your Pell grant. You won't ever write a check for X thousand dollars to Uncle Sam. What you do every April is called paying taxes, we ALL pay them, they pay for everything the government does, including Pell grants, but taxes are not a repayment of gov loans.

The "pay back" is in the form of externalities, which aren't really easily quantifiable. You certainly can't say, I will have paid my Pell $$$ back in X years.

 

[Omni]

Words

+1


Hypothetical student wouldn't be paying taxes at all if he didn't get that education to better himself and meet the criteria for the job he now holds.

Yes we ALL pay taxes (except for the people at the bottom) and where do the grants for education come from? Taxes. Where is the disconnect? He pays back his grant and then some in the form of taxes which he can now pay due to the above.

The rags to riches story of yore isn't as once was. Today you'd better have that certificate/degree to nail that job to BE ABLE to climb the ladder.

 

[navy09]

Hypothetical student wouldn't be paying taxes at all if he didn't get that education to better himself and meet the criteria for the job he now holds.

Wrong. He would have job and pay taxes with or without a degree. That's why I'm saying he needs to evaluate the marginal tax rate because he'd probably make more with a degree, and thus pay a marginally higher tax.

Yes we ALL pay taxes (except for the people at the bottom) and where do the grants for education come from? Taxes. Where is the disconnect? He pays back his grant and then some in the form of taxes which he can now pay due to the above.

Please re-read my last post. Pell grants don't make up 100% of gov spending. They make up a very very small % of overall gov spending for the year. So you can't say "I'm paying these taxes and I want 100% of my taxes to go to pay back my Pell." That's your disconnect...get it?

The Pell is a GRANT, not a loan, you don't pay it back, your taxes go to pay for EVERYTHING.

 

[porw0004]

**DISCLAIMER: RAMPANT STEREOTYPES AND GENERALIZATIONS INBOUND**

If someone can't affoard to go to school, they could always check to see if they live in a state that hands out free rides to good students courtesy of the state lottery. That way, all the rednecks and working poor who can't affoard to send their own children to school will in essence be sending everyone else's children to school. Florida does it, South Carolina does it, I'm sure there are many other states out there as well.

 

[Omni]

Wrong. He would have job and pay taxes with or without a degree. That's why I'm saying he needs to evaluate the marginal tax rate because he'd probably make more with a degree, and thus pay a marginally higher tax.



Please re-read my last post. Pell grants don't make up 100% of gov spending. They make up a very very small % of overall gov spending for the year. So you can't say "I'm paying these taxes and I want 100% of my taxes to go to pay back my Pell." That's your disconnect...get it?

The Pell is a GRANT, not a loan, you don't pay it back, your taxes go to pay for EVERYTHING.

And I should have clarified and said that with this hypothetical person I assumed he wasn't making enough at his job that required only a high school diploma to be eligible to pay taxes. Given THAT situation where its not paying anything VS. paying something then yes he did "pay back" his government education funding. My fault for assuming I was clear on what I meant when I said "...(he) wouldn't be paying taxes at all..."

 

[PropAddict]

Hey. . .come to think of it, why the fuck am I paying for all these other people's little towheads to go to school from preK-12?

Where is it in the Constitution that everyone has a right to an edumakashun?

And that everyone else has to pay for it?


Oh, that's right: it's not, but collectively as a society we have decided that it is in our best interest to have a workforce and general populace with a certain minimum amount of education. Added value. An investment in education is an investment in our future, and all that.

What we're seeing in our generation is a shift in our collective perception of that minimum. And our gov't. is responding to the demands of the collective majority, by providing more educational opportunities. Standby for more college financial aid/public financing and a larger disparity between public and private universities. It's coming.