I appreciate that you are more thoughtful and less dogmatic than many of the loudest voices in the Republican party, and you bring up some points that are certainly worth discussing.
You question how we can afford “free education”. First, I think the free education would apply to state college, community college, and university systems. If it is important to you to go to Harvard, Yale, Princeton, etc, then you need to work to get the scholarships or other financial aid to do so. That’s nothing whatsoever against the so-called elite universities, just a recognition that their cost structures may be quite different from state colleges. Second, in the past we had several state colleges which charged little or no tuition. One might ask how we managed to do that in previous years. Third, there are countries where even today there is little or no tuition cost for state universities. Again, one might ask how they manage it, and the answer is similar to that for the second question. To start, over a hundred years ago, this country realized that education is an investment in the people of the country. It is an investment that will pay for itself, albeit over time. It pays for itself by making the workers more productive, and through that productivity there is more income for the workers and employers. The taxes on that income pay for the investment in that education. It doesn’t happen overnight, but does happen over time. We recognized that for society as a whole, we gain from having a better educated populace, and that gain was deemed worthy of an upfront investment. I know you may be saying that perhaps over the long term it will pay off, but in the short term, how we pay for it. It is a valid question but related to my question of how we did it in the past and how other countries do it. It is a matter of priorities, and unfortunately our priorities have become very skewed over the past few decades. We spend more to lock a person up in jail for a year than we do to send them to college for a year. Afterwards, the person who went to college for a year makes more money than they otherwise would, while the person who went to jail for a year, makes far less. It is a strong net disinvestment in our people. Now we can justify that when we are locking up violent offenders because those people harm society as a whole, but over the last thirty years we have been locking up millions of people for minor non-violent drug offenses. Federal, state, and local governments have spent trillions of dollars locking people up for possession of marijuana, making those people virtually unemployable afterwards. In retrospect, that has to be enormously short sighted and counter-productive. The harm done to the country as a whole by this incarceration is far greater than the harm done by marijuana use. You would think we might have learned our lesson with alcohol prohibition, but instead we doubled down with the “war on drugs”. The costs to the country for policing, courts, and prisons have been astronomical and steadily increasing. End the “war on drugs” and instead put that money to education. Let the police focus on violent and property crime. That will pay for ‘free education’ even in the short term. Another thing to consider is that currently our personal and corporate income taxes are near the lowest they have been since the Great Depression in the 1930s. In the 1940s, 1950s, and 1960s, the top tax rate was over 90% where now it is below 40%. Now very few people paid the top rate, and there were deductions that lessened the impact even to top bracket payers. For all the talk of how high taxes stifle the economy, one has to ask how the economy was when the top rates were higher. After the Depression ended, the economy went gangbusters, high taxes or not. Wealthy people did not flee the country with their money. Corporations did not refuse to invest in plants or equipment, nor did they refuse to hire. There was high consumer demand that drove the economy, and made everyone better off. There is a point at which high taxes can stifle the economy, but we are well below that point in this country. Now I’m not advocating increasing taxes on middle or lower income people, but rather on high income people – the people who have done very well over the past twenty years. No, I’m not talking bleeding the rich, nor am I talking about returning to 90% or more rates. I’m talking going back to the rates of the 1970s and early 1980s of 50% to 70% for top earners and eliminating things like the carried interest loophole.
You talk about how your healthcare costs 55% more than last year. I have no idea what policy or insurance carrier you have but that is outrageous. That is also not typical. Health care inflation has dropped considerably since the implementation of the Affordable Care Act. Now I’m not claiming that the ACA is responsible for this slowdown, nor would I say that all healthcare plans have shown the same rate of slowdown, but for the economy as a whole, the costs seem to be moderating somewhat. Now your plan may have high coverage, but also higher costs than before, but again I’m not familiar with your healthcare plan. A part of the remaining problem is that we rely largely on private health insurance for most of our population. That health insurance is provided by for profit companies. Those companies pay for overhead, advertising, executive salaries, executive bonuses, and stockholder dividends. None of those expenses in any way improve the health care of Americans, but they are overhead costs endemic to a system of private insurance coverage. Where overhead costs of 20% are common among insurance companies, we find that Medicare has an overhead of 3% to 5% of total premiums. Now I’m not saying that private companies should not be allowed to provide health insurance, but would we not in theory be able to cut health care costs and premiums by 15% by switching people to a Medicare type program?
You talk also about how your household is frugal and you expect your government to be likewise. The problem is that a government is not a household. With a household, when income drops, you have to cut expenses. With a country, we proved during the Great Depression that the government has to be counter cyclical. When economic activity drops for the country as a whole, the government has to run short term deficits to “prime the pump” as it were. We have to kickstart the economy with government spending. Now when the economy recovers, we can and should cut back on expenditures and begin to pay back some of what we borrowed to get things going again. The problem has been that we have not made any effort to cut expenditures when the economy recovers. In that sense you are right. We must run deficits to get things going, but must also cut expenditures and begin saving when things are going good. Government expenditures are an investment in the economy, but there is a time to invest and a time to repay what was borrowed to finance that investment. We’ve lost the second part, and some portions of the political spectrum are unwilling to acknowledge the need for the investment up front.
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