I’ll try to keep my schadenfreude in check. College students are finally getting the Econ 101 lesson they deserve, but it’s coming from outside the university system. If you’ve been following the drama in California and elsewhere in the recent “day of action” protests, you’ve seen blissful ignorance at its best. Students took to the streets not to protest war in a far-off land or social injustice, rather tuition hikes in a number of state universities. They’re upset that strapped budgets means they might have to pay subsidy-free market value for the education they receive. They can’t seem to understand why evil politicians (politicians who generally subscribe to their view of taxes and spending) could be so heartless. Simple answer – there ain’t enough to go around. In that most progressive of progressive states, where stratospheric tax rates have forced business elsewhere, California is grappling (yet again) with budget deficits the likes of which have never been seen.
Quick anecdote. I had a conversation with a retired sheriff from a small California town (he was 53 at the time we spoke). He had just retired with 90 percent of his annual pay from the year in which he earned the most. Also, he and his wife have full medical coverage for the rest of their lives. This, unfortunately, is not the exception, but the rule. Any wonder Cali’s in a crunch?
This philosophy, this world view and accompanying public policy, is now being transferred nationwide. We saw what happened with costs in Massachusetts’ universal health care coverage. We’re seeing what happens with generous government redistributive giveaways in California. And even Paul Krugman admits longer unemployment benefits are a work disincentive, which has greatly contributed to stagnation in Europe. Yet it’s these ideas now being advanced for the rest of us by Washington.
Simple statement worth repeating. We can’t tax ourselves rich. It’s been tried, and failed (time and time and time again).