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>One main issue is that income inequality decreases socioeconomic mobility by inflating the cost of scarce goods that improve earnings capabilities. So 4K TVs a

>One main issue is that income inequality decreases socioeconomic mobility by inflating the cost of scarce goods that improve earnings capabilities. So 4K TVs are cheaper but college tuition becomes unaffordable, because good universities and grad programs are valuable, scarce goods that the wealthy can outbid everyone else on. Tuition rates didn't go through the roof until the government started guaranteeing/sponsoring tuition loans. When that happened, the colleges and banks knew they could charge whatever they wanted and still get paid, so tuition cost became detached from ability-to-pay, and there was no incentive to keep prices affordable anymore. The victim in this is the student, who gets saddled with decades of debt, or alternately, an eviscerated credit profile with an albatross that can't be discharged even in bankruptcy. That, however, is obviously not something that disturbs the educational system. Things go screwy fast when you decouple the classic economic checks and balances. While a small number of wealthy people would be both willing and able to afford outrageous rates for tuition, most of them would want a good value, and there's not enough fantastically-rich Americans to support something the size of the education system without drawing from the middle class for pupils.

digi_owl 10y ago
The sad part is that as with housing, the government is applying a demand side "solution" to a supply side problem. Education is expensive, because there is a limited capacity (teachers, facilities, etc). But rather than put money into expanding the capacity, they start offering stipends and loans. But this just inflate the prices. I wonder how much of the choice is because it is easier and quicker to show a results, thus it can be implemented within a single election term, and how much of it is straight graft.

digi_owl 10y ago

The sad part is that as with housing, the government is applying a demand side "solution" to a supply side problem. Education is expensive, because there is a limited capacity (teachers, facilities, etc). But rather than put money into expanding the capacity, they start offering stipends and loans. But this just inflate the prices. I wonder how much of the choice is because it is easier and quicker to show a results, thus it can be implemented within a single election term, and how much of it is straight graft.