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There's several overlapping causes. 1. Services in general don't benefit from productivity improvements like goods do. As productivity goes up, services tend t

There's several overlapping causes. 1. Services in general don't benefit from productivity improvements like goods do. As productivity goes up, services tend to get more expensive in terms of physical goods. Education is a service (as is health care, which is also out-pacing inflation). 2. Saving is extraordinarily difficult on a national and generational scale. Outside of saving easy-to-extract natural resources (oil) for later, basically the only other option is to make the next generation promise to make things later. This is why the lending standards are like they are for student and home loans - the economic pressures of retirement planning demand it. 3. Education is a positional good - you only need a degree for entry level jobs because you're competing against degree holders. Since we're getting better at providing absolute goods for our society, more resources are getting freed up to chase positional goods. 4. A good chunk of the price increases are getting made up with corresponding scholarships and need-based awards. Universities are less trying to gouge all their students, and more realizing that they can pull much more money from higher-income students. This is especially true for Ivy League and other prestigious schools.

humanrebar 11y ago
> Services in general don't benefit from productivity improvements like goods do Very not true. Productivity for paralegals, accountants, and programmers has certainly risen over the decades. We could define education as "person at chalkboard talking about things to other persons sitting at desks", which probably doesn't scale well. There's no reason to think that, in abstract, distributing information won't scale well. > Saving is extraordinarily difficult on a national and generational scale. Exactly. Leaving money to the next generation without getting a huge tax hit is non-trivial. If I got cancer tomorrow, I'm not deciding between leaving my daughter a college fund or going through chemo to eke out five more years. I'm "not paying" for the healthcare, so I'll spend whatever I can on lasting a couple extra months. I certainly can't opt to forgo treatment to leave $250k to my grandkids.
- ThrustVectoring 11y ago
  I may have used the wrong phrasing for generational - I meant it much less in terms of inheritance, and more in terms of "doing things now that mean I have food on the table forty years from now." Like, if you want to do things now so that someone staffs your nursing home when you're old, the net effect is that you're trading real goods and services for "I will do valuable things for society later, such as staffing a nursing home." If you aren't trading current goods for future promises of them, then you're doing things like building machines and roads that deprecate and require maintenance, or growing crops that rot, or otherwise making stuff that won't be very helpful when you're older. And since a lot of people want to be taken care of when they're older, and they're making tons of things that people today want, there's absolutely zero surprise that they're extending shitloads of credit (especially to young people, and college/housing in particular).

humanrebar 11y ago

> Services in general don't benefit from productivity improvements like goods do Very not true. Productivity for paralegals, accountants, and programmers has certainly risen over the decades. We could define education as "person at chalkboard talking about things to other persons sitting at desks", which probably doesn't scale well. There's no reason to think that, in abstract, distributing information won't scale well. > Saving is extraordinarily difficult on a national and generational scale. Exactly. Leaving money to the next generation without getting a huge tax hit is non-trivial. If I got cancer tomorrow, I'm not deciding between leaving my daughter a college fund or going through chemo to eke out five more years. I'm "not paying" for the healthcare, so I'll spend whatever I can on lasting a couple extra months. I certainly can't opt to forgo treatment to leave $250k to my grandkids.

ThrustVectoring 11y ago
I may have used the wrong phrasing for generational - I meant it much less in terms of inheritance, and more in terms of "doing things now that mean I have food on the table forty years from now." Like, if you want to do things now so that someone staffs your nursing home when you're old, the net effect is that you're trading real goods and services for "I will do valuable things for society later, such as staffing a nursing home." If you aren't trading current goods for future promises of them, then you're doing things like building machines and roads that deprecate and require maintenance, or growing crops that rot, or otherwise making stuff that won't be very helpful when you're older. And since a lot of people want to be taken care of when they're older, and they're making tons of things that people today want, there's absolutely zero surprise that they're extending shitloads of credit (especially to young people, and college/housing in particular).