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People want to talk about investment bubbles or the national debt, but here's a topic I don't see enough of: by subsidizing investment in college education for
by DanielBMarkham 15y ago
People want to talk about investment bubbles or the national debt, but here's a topic I don't see enough of: by subsidizing investment in college education for everyone without some feedback loop to make sure grads have employable skills, we've created a huge debt burden of people owing college loans for skills the marketplace isn't valuing. And it's just getting worse. And to "fix it", just like the way we fix all these other bad policies like taxes, we'll just tighten the screws on some minority of the population that people will accept.
Quite frankly I'm disgusted at the whole thing, and I blame both political parties for it. The young are getting screwed over royally by previous generations who knew economics but failed to apply it in their policy decisions. You can't pay for something for somebody else without a very detailed and tight feedback loop. You'll only end up driving up prices and getting less value.
But to your direct point: I can't play the hypothetical game here. It has no end. I'll propose a counter-argument and you'll shoot that down, and on we go ad infinitum. My point was that it is critical to view yourself as adapting to the market, wherever that is, not the other way around. If you sit in your figurative parent's basement waiting for that management job, it's not only bad for you it's also bad for the rest of us. You have to accept your role is adaptation, and the even more bitter truth that you might have spent four years gaining nothing but a bad attitude and a boat load of debt. Blech. Not a good place to start. But for some, that's the reality of where they are.
You have to make decisions and baby steps toward adaptation. What those decisions are and what those steps are is going to vary from person to person.
ADD: Note that this is the very definition of a startup. Go find something people want and give it to them. Adapt and pivot based on what the market wants, not what you want (or have been trained) to do.
- luser001 15y agoIn what ways is a college loan a subsidy? ("by subsidizing investment in college education" ...) Who's doing the subsidizing? Am I missing something?
- jreeve 15y agoThe interest on college loans in the US is largely subsidized through the government while students are in college.
- Anirak 15y agoProbably referring to government subsidized loans (Stafford Loans).
- learc83 15y agoThey are providing low interest loans for people who wouldn't otherwise qualify. The extra risk that the government takes on (that private banks otherwise wouldn't) is the subsidy. Basically they are making money available that wouldn't be there without government intervention. Not to mention that they are directly subsidizing the interest in many cases.
- luser001 15y agoWho is the "they" here? Unless the govt. is doing it, it doesn't count as subsidy. Also, I thought govt. loans were much smaller in total than private loans. Is that incorrect?
- gnaritas 15y agoThe government made student loan debt not dischargable through bankruptcy; that's basically a loan guarantee, hence a subsidy.
- rprospero 15y agoExcept the government doesn't guarantee that they'll pay it off; they're just forcing it onto the student. To put it differently, if the government announced that failed startups could not discharge their debt through bankruptcy and that the founders would be held responsible for paying off the debts, would you call this government subsidization of small business?
- gnaritas 15y agoYes, it would encourage banks to start lending because they have you for the rest of your life to force you to pay. Those kids get loans they couldn't otherwise get because banks know they have them by the balls.
- luser001 15y agoBut I wouldn't use the word 'subsidy' to describe that situation.
- Wilduck 15y agoThe most obvious answer would be to talk about Federal Subsidized Student Loans (like the Stafford). Additionally though, while not a subsidy, per se, there's also the fact that when you take out a student loan, you typically don't make any payments until six months after you stop being a full time student. This feels a lot like a subsidy.
- Androsynth 15y agoAlthough I agree with most of what you are saying, I disagree that most grads are capable of using a startup mentality to adapt themselves to the market. In fact I would go as far as saying our public schools and universities actively discourage independent thinking and creativity. When we graduate, we are thrown into a world that we aren't prepared for. We have been prepared to memorize facts and follow routine, now everything is the complete opposite of that? Even assuming I'm wrong and most graduates can adapt to life after graduation, it still takes a while to mentally pivot. Six months is not long in the scheme of things, but when it happens to lots of graduates, articles like this start to pop up; occupy movements start to pop up; etc.