Failing Economics 101

Skip of Granite Grok takes our member of the House of Representatives to the woodshed for her poor understanding of economics, and rightfully so.

After reading his post a couple of times, I have to admit that I became both angry and frustrated, knowing that our BDS-inflicted Congress-critter was going to inflict all kinds of pain upon us, those she is supposed to represent. Her lack of understanding about basic economics worries me, the primary tenet of economics being that in oder to spend a dollar you must first have a dollar.

Now, what I remember most was the first couple of classes of EC-101 and how hard it was to not burst out laughing as the poor TA was trying to teach a lot of my classmates what I and my floormates was elementary school stuff - how do you describe a straight line on a graph (hint: Y = MX + B anyone?). Our mirth knew no bounds when we saw kids dropping out right and left because they "didn't get it" (sorta like the Physics and Math majors did, in turn, when we had problems in Multi-Variate Calculus).

When I saw this over at NH Insider, all those EC-101 memories came flooding back (and actually, I believe everyone should be exposed to basic micro- and macro-economics => ESPECIALLY if you are a legislator. Heck, I believe you should have a number of years as a private sector employee and employer to boot to be a legislator or Governor or President).

The bill to which Skip refers is supposed to reduce the costs of college educations by increasing the amount of money available for Pell grants, but do it without increasing the costs to taxpayers. I'd be all for that except for two things:

1 – The bill doesn't say where the money is going to come from. Unless cuts elsewhere in the budget are made to offset the increased funding for the grants, the money will have to come from the taxpayers in the form of higher taxes.

2 – I have come to realize that sending even more people to college is not necessarily an answer to some of the upcoming economic problems we're facing. We don't need more college graduates. We need more tradesmen to fix the stuff we already have or to build the things we want. At this point we need more plumbers, electricians, masons, mechanics, and so on, not more Business, English, or Women's Studies majors.

Skip also brings up the thought that even if more money becomes available that the cost of education will not remain the same. It will go up, nulling out the increased funding, if not returning a negative gain that will outstrip any amount of increase. Who ever heard of college costs going down? As Skip explains it:

When there are no incentives for colleges to rein in their cost structure, tuition and board/room costs continue to rise. When the Feds simply throw money into the hopper at one end without making the outflow smaller, enlarging loan amounts will only exacerbate the problem - not make it better.

And that's another blind spot from which our Congresswoman, Carol Shea-Porter, suffers. But then she's never seen a spending program she doesn't like...except, of course, for the one that supports our troops.