This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
1/31/2005
Student Aid
While reading in the book fair play, an interesting issue came up. The Author talked about how taxes are wrong because takeing something away from someone and giveing it to someone else is wrong. Reading this makes sense but I have never met a student that would not accept a grant or a gov't subsidized loan. Do you think that Fair Play is correct and people loose there sense of right and wrong as they get older and more educated? or Do you think that the theory of helping the economy by increasing education possibilities is a more sound theory behind Grants and Subidized loans?
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1 comment:
-1 for no active link in Mack's post (waived)
-1 for spelling mistakes in Mack's post and MEG's comment (waived)
Wow ... this one really got people going, didn't it? Forgive the length of my comment as I try to address everyone/
I disagree with the interpretation of Landsburg in the post. To me, what he is saying is that it isn't OK to vote to take something away from someone in taxes just because they happen to have something to take away. But, you can vote in rules about how to tax things away in the future (and then let people decide whether they want to accumulate the taxable stuff).
As to the questions, I don't think people get less good as they get older and better educated. I do think they may be presented with more moral hazards (what MEG calls temptations). And I think that their laziness in dealing with real world situations that require clear thinking may make them more prone to rationalization.
I am not sure it is sound to give our grants and loans for education. The reason for doing this would be that people are not capable of recognizing the benefits of education on their own. Does that sound like you? We could make an argument that you may not be able to afford education, but then why couldn't you get a loan to invest in yourself (just because that sort of thing doesn't exist doesn't mean that is wouldn't in a society without subsidized student loans)? I think the problem is that bankers would want to loan a student money if they were going to major in a high demand field like nursing. This doesn't happen because there are a lot of vested interests who want those people to major in their area (where there are no jobs) instead of nursing where there are. So, grants that don't tie you to a major provide job security for educators in areas without much demand. Think about it - bankers make judgements about the likely future profitability of firms all the time, but they are forbidden to do the same for students because it might potentially steer them in the right direction.
I also do not think it is entirely clear that having a more educated/skilled workforce is a good thing. Education and skills are payed a premium because they are rare. Increasing the number of people acquiring them reduces the incentive to have those skills in the first place. The world is full of English majors with creative writing skills, but unfortunately those people can't offer much to the marginal operation that might get them a reasonable paycheck.
I think the source of the problems with government spending outlined by MEG have to do with bad incentives. If someone can't get fired for designing a faulty government program, do we really expect them to always design good ones? The same goes for Jane's focus on mismanagement. I don't think people in the government are naturally dumber or less compassionate. I think they don't have as many mechanisms governing their behavior as you and I do. To compound that, they are not spending their own money. Corporate officers have a fiduciary responsibility - that can be enforced with jail time - to make intelligent choices. Bureaucrats don't.
With respect to Scott's comment, I'm not sure that what he is describing aren't just societies that are failing to work on a number of levels. For most of human history we were dirt poor - but crime didn't blossom until there was something to be gained by it. Further, it tends to be worse in societies in which there is a precedent for criminal behavior coming from the top down.
With respect to Kenny and Jane, let me phrase Kenny's point differently. It it OK to take a grant away from a qualified person who can otherwise afford school to give it to someone who is equally qualified but can't afford school? There are three questions to ask about that. First off, is society better one way or the other? I think the answer is that society is better off if the grant is given to the poorer person. Second, is it fair to judge someone's qualifications for an educational grant based on anything other than educational potential? If no, then we can't give the money to the poorer person. Third, what if the money to fund the grant is predominantly coming from the rich person? Does this effect your answers to either of the first two questions? I can tell you that our grant programs are managed as if the answers to the first two questions are yes and yes, and that even asking the third question is grounds to be labeled a bigot/racist/sexist/elitist.
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