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Right, so the issue with the income premium without economic growth argument is that the government would have collected those incomes anyway, just from differe
by Akababa 7y ago
Right, so the issue with the income premium without economic growth argument is that the government would have collected those incomes anyway, just from different people (unless the student loans are structured as a % of future earnings, in which case I apologize for my ignorance).
Of course, degrees aren't zero value, but the subsidies for education (student loans) could still be distorting supply in a way that results in a net loss for the government. For example, a self-taught engineer or entrepreneur spends years in school instead of inventing or starting businesses. This is a poor allocation of investment and human capital which results in a net economic loss (including a loss for the government).
- dahart 7y agoWhy do you believe that school years take away from invention and business? There’s no evidence of that, and a lot of evidence in the other direction. Right now, both inventing and starting businesses are strongly correlated with degrees. The evidence we have suggests not only that student loans are a very good investment, it suggests the investment is so good that the government would make almost as much money back if they subsidized education completely, if they paid for education and didn’t ask for the money back. The evidence in countries like Norway and Finland seems to back this up as well. They subsidize education, and their economies are strong, and their education systems out-rank the US globally.