Problems with subsidizing higher ed
I came across an old article from the Foundation for Economic Education this morning addressing the problems with taxpayer subsidies for higher education. That's right, I said problems.
You see, in a world of limited resources, the over-consumption of one product due to a government-created distortion means shortages of other goods and services. Moreover, heavy subsidies for higher ed are detrimental to the higher ed system itself. Subsidies create artificially high demand while insulating consumers from the direct costs of consumption. While some pundits claim that subsidies are necessary to combat the rising cost of a college education, any worthy economist would quickly point out that government subsidies are the reason for rapidly increasing costs. They also tend to lower the quality and utility of educational pursuits.
My favorite line from the article: "Another form of waste is the pursuit of irrelevance. Insulated from the discipline of the marketplace in their taxpayer-supported fiefdoms, many academics pursue silly scholastic dogmas."
I've highlighted some of these points in the past with regard to funding of the NSHE system. The Freedom Budget also proposed a major restructuring of the way the system is funded. I'm sure that NPRI's Education Policy Analyst, Patrick Gibbons, could add a diatribe of his own on this topic.
