The new year is here, and along with it comes the start of a new semester. As many of you may know, the first part of any semester is a horror movie with a sick twist. The plot being your ever-increasing tuition bill, and the twist being the smack in the face that is the unruly price of your textbooks. And what a truly sick twist it is.
Last week, I logged into my University’s bookstore website to price check a couple of books that I will need for this semester of econ classes. I, like many other students thought, how expensive can a pile of papers really be? I typed in the first book’s title and almost threw up. $475 dollars? Surely something was wrong. Who would pay such a price for a book? It couldn’t be any of my classmates. No person of sound mind could rightly fork over that much money for 200 pages filled with black ink. Has demand increased so much as to warrant these price jumps? Have competitors not completely bankrupt these schools for basically robbing students blind? No, because students aren’t really paying for these books. They haven’t been for a while.
The government is paying for them. With money that it stole from your parents.
According to The Bureau of Labor Statistics, textbooks are just one of the goods that have experienced insane price increases over the years.
Notice, that in the graph above, the goods that have experienced the highest prices are the ones that have continually increasing government involvement.
This is a critical point in economics that needs to be understood on a host of different issues, from education to healthcare. When government intervenes in a trade between two parties on behalf of the buyer by subsidizing the good, it’s price becomes irrelevant. Why would the buyer care about the price of said good if a third party is fronting the bill? Answer: They don’t. And if that third party has an endless bankroll, what incentive does the seller have to keep prices low and be competitive? Answer: They don’t. So, when the government decides to subsidize or outright offer student loans, we shouldn’t be surprised when the schools take advantage and suck every dime they can out of the government.
The fact that the government is loaning money for college educations is going to cause our nation severe problems in the near future. Thanks to an immense demand spike, the value of a college education is slowly being degraded. With so many college graduates the job market is becoming saturated. This means fewer jobs for students who graduate. Students with no jobs can’t afford to pay back their loans. Remember the last time the government encouraged lending to those who couldn’t pay back their loans? “OOOO I MEMBER!” (see the latest season of South Park for the reference) Yeah the economy crashed.
Let’s get the government out of higher education. Let’s allow our universities to become price competitive, just like every other business market out there. Sink or swim. The university offering the best education at the lowest prices will win. Let’s encourage businesses to hire our youth and offer tuition reimbursements to students studying in degrees pertinent to real world jobs. Let us dispel the myth that college should be free and instill in our children principles like saving money, personal responsibility and a sense of pride that will fuel them to be able to pay for their own school, and the education of their children.
But the more the left advocates for big government, increased regulations and “free tuition” for all, the more our economy and the people that contribute to it will suffer in the long run.
Also… just rent your books from Amazon.