The Fraud of Educational Subsidies

Developing economics is a branch of economics that focuses its attention on improving fiscal, economic, and social conditions in developing countries.  It considers such factors as health, education, working conditions, domestic and international policies, and market conditions with a stated interest in improving conditions in the world’s worst-off countries.  One problem with this is that most theoretical economists have never worked in any field and base all their arguments on unproven hypotheses.

Absent here, in the rush to judge how great their ideas are, economists lose sight of how the scientific method of investigation is supposed to work.  It’s pretty simple, actually.  First, one establishes facts through long-term observation of behavior, forming a hypothesis, predicting the likely outcome of that hypothesis, validating the hypothesis through experimentation, and carefully analyzing the results of one’s work.  Skipping over steps or accelerating the process only damages the process of intelligent investigation.

Let’s investigate this further by looking at government subsidies:  A subsidy is a benefit given to an individual, business, or institution — usually by the government.  It can be direct (such as cash payments) or indirect (such as tax breaks).  The subsidy is typically given to remove some burden, and it is often considered to be in the overall interest of the public, given to promote a social good or an economic policy.

There are many forms of government subsidies, the most common of which are welfare payments and unemployment benefits.  Presumably, these types of subsidies aim to help people temporarily suffering economically.  However, This argument fails when many people are permanently enrolled in such programs and their socio-economic situation remains perpetually unchanged.  Another example of government subsidy is the subsidized interest rates on student loans.  These are offered to people to further their education.  The word education may only partially describe what goes on in institutions of higher education.  It makes the casual observer wonder, “What, exactly, are we subsidizing?”  People graduating with degrees in gender studies do not contribute to the American economy — and if that’s true, then why does the government (taxpayers) subsidize clownishness?

The argument supporting government subsidies to businesses is that some businesses struggle against unfair competition in domestic and international markets — so the government steps in to level the playing field.  This has always been a slippery slope because what happens, from a practical standpoint, is that the government picks and chooses who the “winners” are.  Black-owned businesses and those owned and operated by women (of any color) receive government assistance, while those operated by white people, particularly white males, do not.  How fair is this?  It isn’t fair, and it’s un-American, and some people will argue that if a business needs a government subsidy, it shouldn’t be in business in the first place.

To take the issue of subsidy to the next level, certain politicians propose canceling all student loans.  Free education — and we all know the value of something we didn’t pay for or work for.  I do not understand the thinking that supports “free college education.”

Democrats (and other communists) are now arguing that government intervention is justified (and necessary) because some (for whom higher education is productive) are unable to finance education loans because of imperfections in private credit markets.  Alternatively, owing $60,000 (or more) for a degree in African or gender studies may have been a colossally dumb move.  It is time for people to make better decisions for their future by thinking through the problem before leaping into a financial abyss.

We know from practical experience that subsidies encourage the wrong kinds of excesses.  Anyone seeking a degree in a field of study without jobs makes no sense.  None.  We might even ask universities that offer such degrees to explain why they offer them.  We may find out, after further investigation, that the government subsidizes universities to offer such degrees.  I have no problem with “gender studies” at the graduate level, so long as there is no government subsidy to pay for them.

Why is the government offering to forgive and pay for these loans (at the taxpayer’s expense)?  It is entirely political — which means patently dishonest.  The federal government has no legitimate role in the educational loan business.  Indeed, the federal government has no legitimate role in most subsidies.  My conclusion is subjective, of course.  No one has provided any scientific justification for choosing winners and losers in a society that used to and should again, exist on merit.

Are there people who are intellectually gifted but economically challenged?  Of course.  And there are already in place programs that address these people.  Student loans are possible, along with educational grants and scholarships.  These must be awarded based on merit, not skin color or gender.  No person should have a college degree because of an athletic skill set.  They shouldn’t be in college if they cannot be accepted into a college or university because of their intellectual ability.

Otherwise, college degrees are worthless no matter how much the government subsidizes them.  We all know this — even Democratic politicians (and other communists).  In the United States, this topic is all about getting young people to vote for Democrats — and this is a bad idea because even people with degrees in African pottery know that Democrats have never had an idea that advanced Americanism.

What is the fraud of educational subsidies?  It is that the government picks and chooses winners and losers.  This is not the business of government.  Not in America, anyway, and it is time for Democrats to stop treating the American people as if they are living in a developing economy.