Tuesday, July 26, 2011

The pernicious impact of third-party payers

Check out this chart detailing how much college costs have risen compared to all other prices. It's why people from Glenn Reynolds to Michael Barone have been speaking about the higher education bubble.
With college grads having so much trouble finding jobs, it's no wonder that more and more people are predicting the bursting of that bubble. And we will find the same culprit behind much of that bubble as we did with the housing crisis and the inflation in health-care costs - the pernicious effects of having a third party, meaning the government, subsidize what people buy. People are happy to waste someone else's money and that drives up costs. Those of us who don't have that third party aid are the ones who are really caught. And so the cry will go out constantly for more aid. When does it stop?