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?


C-Dizzle said...

I think taking taxes are good when they are used properly. Things like roads, traffic lights, electricity, plumbing, running water, policemen, firemen, hospitals, and other such goods are a very appropriate cause for taxation. By combining our cash, we can produce bigger things for the good of many. Taking my taxes to support hundreds of irresponsible slackers is where I get a little sensitive. I have an acquaintance who recently got married. He and his wife decided to have a baby simply because they new the state would pay for the pregnancy and child birth. He and his wife even boast to others about how the state’s paying for everything. This is the reason I don’t have children right now; I’m too busy paying for everyone else’s! I do understand that things happen and people get pregnant unexpectedly and that’s why the government provides help. I am more than willing to pay taxes to help those in need. It’s those who deliberately abuse the system that make me furious.

As we get older, I don’t believe our sense of right or wrong differs much from when we were young. As our knowledge of the world increases, so do our temptations. As temptations increase, more people crumble under the temptations. Those who cave in to these temptations still know the difference between right and wrong, they’ve simply chosen the wrong. People don’t lose their sense of right or wrong, they simply 'give up' their ability to choose right over wrong.

Concerning government grants and loans to help education; I think it’s a great idea when allocated properly. By giving grants and subsidized loans, society is collectively making a human investment for the future. Because of this financial aid, many more will graduate with degrees that will help better society. The more skilled workers that enter the workforce, the more efficient the future companies become, the cheaper products are sold, and the more things consumers can buy. There are a million other reasons this human investment will help society but these are just a few.

scott said...

I believe that education has one of the the highest marginal benefits to society of any government activity. Education decreases crime, increases productivity, creates voters who are more informed, increases social awareness, generates entrepreneurs and managers, and is a social equilizer. No one would complain about paying to the educational system if they could see what the country would be like without it. I have visited countries where basic education is not required and almost no government aid is available for postsecondary education. The crime rate is worse than in Baghdad. There are very few entrepreneurs who create jobs for others. The poor pay almost no taxes because their earning power is so low. I don't believe taxes used in education are taking anything away. It is merely paying your dues for the opportunity to live in a better society.

kenny said...

I believe grants would be better if they were available to everyone. It is unfair to base grant eligibility on income. A person who chooses not to work or work fewer hours is rewarded with a government grant. People who choose to work full time are not as likely to qualify for a grant. The current system does not promote helping the public become educated; instead it promotes laziness by offering educational benefits only to the lazy or unmotivated.

Jane said...

To "Kenny"
Grants are designed to help those who are unfortunate, or in a difficult place, get an education that would otherwise be unavailable to them. I do not believe that they are offered only to the "lazy or unmotivated." In fact, I thoroughly resent it. I am far from lazy and am most definitely motivated.

There are many people who do not have the skills required to obtain a job that would support their families AND pay for school or who simply have the choice to work OR go to school. Props to you if you can work 40 hours at a well-paying job, raise and care for a family sufficiently (by sufficiently I do not simply mean financially), as well as getting a meaningful education.

To "Mack"
Plain and simple, the government is going to tax us. What is better looked at is how they put the funds they obtain to use. "Government" and "Mismanagement" seem to be synonomous in most cases. Giving grants and subsidized loans to less-fortunate students to better themselves and help to make them productive members of society is, in my opinion, a good use of the money. Even the welfare system, in theory, is a good plan that went terribly wrong. Helping those in need is, morally, a great thing. However, the system is designed in a way that 1) makes it easily corruptable (meaning that many people who are not "in need" have found access to it) and 2) the very design makes it incredibly difficult to get back on your own feet after obtaining aid and, in fact, discourages many people from even trying.

I don't believe that the majority of people have lost their sense of right and wrong. What is wrong with wanting to better your life for yourself and your family? The problem is mismanagement. After all, I would much rather the government put people through school than spend millions of dollars developing research on the mating habits of fruit flies.

Rex said...

The theory of financial aid is a sound one; financially help those who want an education reach their goals. The problem I see is you have to be living on the street to get the aid. As Kenny states that when people educate themselves they will in turn help the economy.
Personally I don’t think the system has kept up with the economy. There has to be a better way to evaluate the needs of people than a ridiculously low level of income.

Dr. Tufte said...

-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.