Tuesday, January 14, 2014

Where the money goes

There was an article in The Atlantic last week which should have been on the front page of every publication as far as I'm concerned. Why? Because it pointed out that, in a country with over a trillion dollars of student debt, the amount of money we spend on trying to make college 'affordable' is more than it would cost to give everyone a college education for free!
A mere $62.6 billion dollars!

According to new Department of Education data, that's how much tuition public colleges collected from undergraduates in 2012 across the entire United States. And I'm not being facetious with the word mere, either. The New America Foundation says that the federal government spent a whole $69 billion in 2013 on its hodgepodge of financial aid programs, such as Pell Grants for low-income students, tax breaks, work study funding. And that doesn't even include loans.

If we were we scrapping our current system and starting from scratch, Washington could make public college tuition free with the money it sets aside its scattershot attempts to make college affordable today.

Of course, we're not going to start from scratch (and I'm not even sure we should want to make state schools totally free). But I like to make this point every so often because I think it underscores what a confused mess higher education finance is in this country. On the whole, Americans seem to want affordable colleges that are accessible to all. But rather than simply using our resources to maintain a cheap public system (and remember, public schools educate 75 percent of undergrads), we spill them into a fairly wasteful and expensive private sector. At one point, a Senate investigation found that the for-profit sector alone was chowing down on 25 percent of all federal aid dollars.
Here's Exactly How Much the Government Would Have to Spend to Make Public College Tuition-Free (The Atlantic)

How many times are we told by politicians of both parties that we don't have the money to do this or that? Because it's a fucking crock! Of course we have the money to do these things, we just waste it on inefficiencies and corporate welfare. So, you're not being "fiscally responsible" by saying we can't afford things like universal education or health care, because we're already spending more than that amount of money right now! As most people are aware, the United States already spends more money on health care than any other nation in the world (almost 1 in 5 dollars of economic activity), while leaving millions uninsured, and millions more permanently bankrupt and in debt. All because we need to channel our resources through a greedy and inefficient "private sector." When will we realize that we're being ripped off?

This article makes the exact same point:
And yet the government tends to get involved where real needs exist, usually due to market shortfalls. Lack of health insurance, unaffordable flood insurance, difficulties obtaining housing, lack of access to higher education, etc., are real problems, and American voters have repeatedly expressed their frustration over them and their support for candidates who offer solutions.

Except … these needs run against a peculiar American ideological strain that rejects most (or even all) signs of federal power and equates even modest levels of taxation with tyranny or socialism. Thus has the American political system developed an unusual way of meeting citizens’ needs while attempting to hide the fact that it is doing so. This system has been dubbed “the submerged state” by political scientist Suzanne Mettler and, relatedly, “the kludgeocracy” by political scientist Steven Teles.

As Mettler shows in her work, such a form of public policy tends to lead to perverse understandings of American politics by its citizens. For example, many people wish to buy homes, and the federal government wants to see more people owning homes, as homeownership produces desirable qualities in citizens and the housing sector is an enormous part of the economy. But houses are expensive. So rather than produce some federal bureaucracy that helps people afford homes or sets price caps on them, Congress instead inserted the home mortgage interest deduction into the tax code. The federal government spends about $100 billion per year on this program, but most of its beneficiaries either don’t know about it or don’t think that they are benefiting from a federal program. Indeed, some 96 percent of Americans rely on some federal largesse at some point in their lives, coming in the form of subsidies or tax deductions, but most of us think of ourselves as independent. Even Senator Ted Cruz, as John Sides points out, gets help from the taxpayers, despite his claims to the contrary; his wife’s private health insurance plan is provided through a tax exemption.

All of this means that policymakers who actually want to use government to make Americans’ lives better face the difficult task of doing so while making it appear that they’re not doing anything. This helps us to understand why the Affordable Care Act was such a monumental and complex undertaking (and why the bill was so long). The government was responding to real and growing concerns —sharp increases in the costs of health care and the growing number of citizens without insurance. It would have been eminently easier (and probably cheaper and more efficient) to simply make the federal government the sole provider of health insurance, essentially Medicare for all. And yet that was not remotely within the realm of the politically possible, even with Democrats holding large majorities in Congress.

Thus did Congress construct an intricate system of health exchanges that leaves citizens still being insured by private companies, but with guarantees of coverage and lower costs. (Of course, even this was described as a Commie/Nazi takeover.) And while there’s no excuse for the poor functioning of the Healthcare.gov website, is it at all mysterious why such a website, culling information from hundreds of different insurance vendors across various states, would be such a daunting project?
You Probably Rely on the Federal Government a Lot More Than You Think You Do (Pacific Standard)

And what advantages are we getting for going through the "efficient" private sector? Value for our money, right? Let's see: 10 Ridiculous Perks Given to College Presidents and Celebrity Profs (Mother Jones)

1. New York University: Loaned its president $1 million to buy a summer home

2. Penn State University: Paid its president $2.9 million after he was fired during the Sandusky scandal

3. City University of New York: Offered General David Petraeus $200,000 to teach a single seminar

4. Ohio State University: Will pay its retired president $5.8 million

5. Mountain State University: Paid its president nearly 4 percent of its budget

6. Johns Hopkins University: Paid its outgoing president $3.8 million

7., 8., and 9. The New School, University of Chicago, and University of the Pacific: Paid $1 million-plus in severance to retiring administrators

10. Vanderbilt University: Paid $6 million to a retired administrator

And don't even get me started on the wastefulness of college sports. According to this article, Temple University alone has a 44 million dollar athletics budget! Just one college's athletics budget could pay for two-thirds of the nation's college educations! Are you kidding me?

And I don't think we need to go into the wastefulness of American health care, with it's corporate health care administrators buying yachts, its CEO's flying around the country on private jets, and expensive wall-to-wall advertising that doesn't heal or treat a single patient. Here's a taste:
Scully, who has spent the last 30-some years oscillating between government and the private sector, is hoping to be his own best proof of the Obamacare gold mine. As a principal health policy adviser under President George H. W. Bush, he helped formulate many of those past Republican initiatives — like the shift to private-insurance programs — that Obamacare has put into law. Under George W. Bush, he ran the Centers for Medicare and Medicaid Services and oversaw a host of proto-Obamacare reforms, like Medicare Part D, which introduced competition into the government-supported health care market. After leaving C.M.S. in 2004, Scully began working simultaneously at Welsh, Carson, Anderson & Stowe, a leading health care private equity firm, and Alston & Bird, a law firm and health care lobbying organization. When the Affordable Care Act became law in 2010, he found himself in the rare position of being a lobbyist, private equity executive and former government health care official with access to a serious amount of capital. During the past three years, as other Republicans have tried to overturn Obamacare, Scully searched for a way to make a killing from it.
The President Wants You to Get Rich on Obamacare (NYTimes)

Health care, education; things like these are requirements that any modern industrial society needs in order to function. Yet in America, everything is turned into  a scam to funnel money to the one percent! Is it any wonder why we're a failing country?

The issue isn't how do we pay for these things. We're already paying for them right now! So the next time someone tells you how we're too poor of a country to give everyone access to education or health care, or that we can't afford it, or that we would have to raise taxes, or that market-based solutions are always better, you can refer them here and politely tell them that they are a fucking idiot. Because they are.


  1. Since the USA is a failed state running down the inheritance of previous generous, with an apathetic, increasingly addled and uneducated voting public, and corrupt elites, the question is: how soon can you emigrate? I would guess that it's easier to leave before social and political collapse, rather than after.

    1. Ah, but how would I support myself? I'm not independently wealthy. Have blog will travel?

      Do you read this?: http://www.escapefromamerica.com/

    2. Maybe I could buy a business:


      Hmmm, is that legit? Do bad I don't know anything about fishing. Buying a guest house would be awesome if I could afford it. I could even do Permaculture.


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