Comparing College to Home Ownership

Sorry, an unfinished version of this post may have shown up earlier today in your feed readers.  This one is the completed version.

For years, America has pushed home ownership.   Mortgage interest is one of the few personal expenses that is tax deductible, giving people a strong financial incentive to shift from renting to owning.  The Federal Reserve has pursued a policy of keeping interest rates low, further decreasing the cost of owning.   Congress passed a myriad of laws and created numerous organizations to help insure that anyone who wanted to buy a home could probably get credit.  And every politician, talking head, "expert", etc. who ever got in front of a camera tended to advise everyone regardless of circumstance to try to buy a home.  It was not just home ownership, it was The American Dream Of Home Ownership.

Hayek could have told us years ago that there was a fundamental problem with this.  In short, 300 million people do not have the same situation and needs and preferences.  Take just one example.  Does it really make sense to encourage a worker who has a risky income stream (e.g. is vulnerable to layoffs or reduced hours) to buy a house?  Leasing provides much greater flexibility to adjust fixed housing costs to changing circumstances.  Rent, get your hours reduced, move to a smaller apartment.  Buy, get your hours reduced, default, ruin your credit.

The result of our full-court press for home ownership has been rising home ownership rates ... and rising foreclosure and bankruptcy rates.

OK, none of the above is new information.  But I was having a conversation with my dad about education, and it struck me that we may be doing the exact same thing with four-year college liberal arts degrees.  Every talking head, from talk show hosts to politicians, push kids to go to college.  Along with home ownership, the BA is described as a keystone to the American Dream.  As with home ownership, we subsidize college education with state-run schools and government loan programs.  Just as the government tries to make sure everyone can own a home, they try to make sure every kid can go to college.

Returning to Hayek for a moment, is it really likely that spending four years getting a college liberal arts degree is really the best possible course for every single person?  Sure, one can argue that the state offers community colleges and other alternatives to the standard 4-year degree, as do private companies like the University of Phoenix, but I get no sense that politicians and the intelligentsia are really promoting this kind of nuance and choice.  I think the message clearly is "four year liberal arts degrees are the goal, everything else is second best."

State university systems that were originally founded to help teach scientific agriculture to farmers wouldn't be caught dead having anything so pedestrian show up in their marketing brochure today.  They want to have Nobel prize-winning faculty and be influencing public policy and be doing (and getting grants for) state-of-the-art research.   Teaching students a useful trade?  That's so ... uncool.  Let 'em go to DeVry if they want that.

To some extent this is the result of the takeover of most campuses by the faculty, who wield most of the power nowadays (just ask Neil Rudenstein and Larry Summers at Harvard).   Academics are a special class of folks who work as much for, or more for, prestige among their peers as for money.  Those incentives are great when you want someone to focus in 120 hours a week on inventing a new type of superconducting material.  But in a university, it tilts the entire institution towards a focus on teaching interesting things vs. teaching useful things.

So what has been the result?  Well, college has an equivalent to foreclosure and bankruptcy, and it is called drop-out rates.  And drop-out rates seem to be rising, at least reading articles anecdotally.  The only actual figure I can find was this one:

Just 54 percent of students entering four-year colleges in 1997 had a degree six years later "” and even fewer Hispanics and blacks did, according to some of the latest government figures. After borrowing for school but failing to graduate, many of those students may be worse off than if they had never attended college at all.

I can't prove there is a trend, because I just can't find a good online source, but 46% non-graduation rate strikes me as pretty high.  And I would argue that there is, in addition to drop-out rate, a second figure one must consider.  How many of those that did graduate could actually do with their degree what they thought they could?  How many have a 4-year journalism degree from Michigan and now are working at Starbucks, either by choice or necessity?  I call this the soft drop-out rate, the rate of, for lack of a better word, underemployment of one's education investment.

I know that education leaders can all give a nice speech about how important a liberal arts degree is to the health and functioning of the polis, but the fact of the matter is that it is a luxury.  It is an incredibly rich world that can have its youth in their strongest and most productive years studying Italian Renaissance poetry or Portuguese literature for four years.  And I am not talking about this as a luxury for garbage collectors or auto mechanics, but a luxury even for future white collar workers, who need basic skills like these but are, based on my hiring observations, graduating from college without them:

  1. A strong sense of personal responsibility and a commitment to excellence in one's work
  2. The ability to break down a task and organize work towards its completion
  3. The ability to write a well-organized five paragraph persuasive essay or letter
  4. The ability to do basic computational math
  5. The ability to manage personal finances and make smart financial decisions
  6. The ability to understand basic accounting terms and concepts
  7. The ability to interact with other people honorably and on the basis of a reasonable level of self-awareness
  8. A reasonably well-developed sense of ethics and responsibility

To illustrate this further, I want to end with something I have observed over the past year.  During the last election, I sensed something in the average 20-something Obama supporter that went beyond just frustration with the incumbent President and the normal level of youthful flirtation with progressivism.   I sensed a real anger that somehow some promise had not been kept to these folks.  One interpretation of this is that these folks were all promised that a 4-year liberal arts degree would be the guaranteed ticket to success, and that their college degree would make them future leaders and the world would soon tremble at their pronouncements (seriously, just go read the marketing literature from any college).  Having gotten this "promise," they suddenly find the world doesn't really hang on the every word of a 22-year-old who has never really been out of the womb, and the employers of the world are not beating the doors down to hire a gender studies major who wrote a really well-received thesis on the role of women in the Paraguayan post-modernist movement.

The Washington Post had a great profile on such folks (though written with far more sympathy than I would have mustered).  Here is an example from that article:

Armed with a Georgetown University diploma, Beth Hanley embarked in her 20s on a path hoping to become a professional world-saver. First she worked at nonprofit Bread for the World. Then she taught middle school English in central Africa with the Peace Corps. Finally, to certify her idealism, she graduated last spring with a master's degree in international relations from Johns Hopkins University.

But now the 29-year-old faces a predicament shared by many young strivers in Washington's public interest field. After years of amassing so many achievements, they struggle to find full-time employment with decent pay and realize they might not get exactly what they set out for. Hanley, a think tank temp who dreams of aiding the impoverished and reducing gender discrimination in developing countries, is stuck.

TJIC had some classic comments on this article, and I added some more.

Which brings me finally, of all places, to Michelle Obama.  She said something that I thought was relevant to this post:

Despite their Ivy League pedigrees and good salaries, Michelle Obama often says the fact that she and her husband are out of debt is due to sheer luck, because they could not have predicted that his two books would become bestsellers. "It was like, 'Let's put all our money on red!' " she told a crowd at Ohio State University on Friday. "It wasn't a financial plan! We were lucky! And it shouldn't have been based on luck, because we worked hard."

You can see the whole piece here, but she is a pretty clear example of what I am talking about.  She got a Princeton liberal arts degree and is just amazed that it did not automatically pay off for her.  Somehow, some promise to her has been broken.

Just as she is an example of this phenomenon, she is now endeavoring to be part of the problem, working hard to further confuse the expectations of young people.  Her message to them is -- go get an expensive education, but whatever you do don't do anything money-making with it:

"We left corporate America, which is a lot of what we're asking young people to do," she tells the women. "Don't go into corporate America. You know, become teachers. Work for the community. Be social workers. Be a nurse. Those are the careers that we need, and we're encouraging our young people to do that. But if you make that choice, as we did, to move out of the money-making industry into the helping industry, then your salaries respond." Faced with that reality, she adds, "many of our bright stars are going into corporate law or hedge-fund management."

I have no particular problem with people taking on these occupations, as long as I don't have to pay for it.  And I am proud that my university, Princeton, is one of the few that has changed its financial aid rules to allow students to graduate debt-free and have the financial flexibility to pursue careers that are not high-paying (making Ms. Obama's comments doubly ironic since this is her alma mater as well).

But the general expectation here is just unrealistic.  Here is how I responded previously to Ms. Obama's comments on her education:

This analogy comes to mind:  Let's say Fred needs to buy a piece of earth-moving equipment.  He has the choice of the $20,000 front-end loader that is more than sufficient to most every day tasks, or the $200,000 behemoth, which might be useful if one were opening a strip mine or building a new Panama Canal but is an overkill for many applications.  Fred may lust after the huge monster earth mover, but if he is going to buy it, he better damn well have a big, profitable application for it or he is going to go bankrupt trying to buy it.

So Michelle Obama has a choice of the $20,000 state school undergrad and law degree, which is perfectly serviceable for most applications, or the Princeton/Harvard $200,000 combo, which I can attest will, in the right applications, move a hell of a lot of dirt.  She chooses the $200,000 tool, and then later asks for sympathy because all she ever did with it was some backyard gardening and she wonders why she has trouble paying all her debt.  Duh.  I think the problem here is perfectly obvious to most of us, but instead Obama seeks to blame her problem on some structural flaw in the economy, rather than a poor choice on her part in matching the tool to the job.

And this is what it is all about when you cut through all the misty-eyed Utopian notions about education:  For most people, it is a tool.  And the tool needs to fit the circumstance, the goals, the capabilities, and the budget.  Its time to stop advocating (and subsidizing) and one-size fits all college education program.


  1. eCurmudgeon:

    Sounds a lot like the case Charles Murray makes in the highly-recommended book "Real Education".

  2. NJconservative:

    The subsidies heaped upon higher education also increase the costs for those who who are paying for themselves, so it is a doubly damaging circumstance. There is no reason for colleges and universities to operate efficiently or try to control expensive, ego-driven growth. The government will dutifully kick in their huge share of the total cost.

    As usual, the government does a horrible job at something that would be beautifully efficient, and of much higher quality, if the private sector were allowed to act without influence from the mandarins in Washington.

  3. Dr. T:

    I agree with your comments on college education (and on home ownership), but some important facts were omitted. First, nearly 70% of high school grads go to college today, which is nearly three times the rate of the 1970s. Only 25% of HS grads in the 1970s went to college, and many of them completed only two years at a community college. Most of the other 75% of HS grads were not considered college material. Now, an additional 45% of HS grads go on to college, but they aren't any smarter or any more prepared than the non-college attendees of 35 years ago. If four-year colleges today were as tough as in 1974, the college failure rate would be around 70%! It is much lower than that because almost all colleges lowered their standards. After all, failed students stop paying tuition.

    The biggest detriment to the increased numbers of college students is that due to watered-down courses, a four-year degree doesn't mean much. This has had a major impact on medical professions. A number of professional positions (registered nurse, medical technologist, radiology technologist, histopathologist, pharmacist, occupational therapist, physical therapist, etc.) are talking about requiring a master's degree instead of a bachelor's of science degree. This would add two years of time and two years of graduate school tuition costs to anyone who enters these fields. A second major impact is that many college grads who pursue advanced degrees (medicine, physician assistant, clinical pharmacologist, etc.) are not adequately prepared due to their watered-down college courses. I started teaching medical school in 1989, and the problem of poorly prepared students steadily grows worse. This results in watered-down medical school courses (since medical schools hate to have any student flunk because federal funding is based on enrolled students). The newly graduated doctors of today are not as prepared as their counterparts from 20-40 years ago.

    The problems of massive and inappropriate college attendance will continue unless we can convince the educators and politicians that most teenagers will do better with trade- and career-oriented schools. We still need plumbers, mechanics, drivers, pilots, maintenance workers, construction workers, surveyors, commercial artists, refrigerator mechanics, landscapers, etc. None of those careers require four years of college.

  4. eCurmudgeon:

    "We still need plumbers, mechanics, drivers, pilots, maintenance workers, construction workers, surveyors, commercial artists, refrigerator mechanics, landscapers, etc."

    Not to mention that many of those jobs often pay better than jobs requiring a college degree. They're usually resistant to offshoring, too.

  5. John Moore:

    I doubt if many people going to college are looking for a traditional liberal education, which is good because they aren't likely to get it - instead finding those departments filled with irrational hacks pushing the latest lefty intellectual fad, rather than teaching the classics and informing the students about the world.

    If it weren't for the remedial instruction provided, most universities of today would provide a better education if they shut down their English, History and related nonsense departments.

    As society becomes more complex and anonymous, credentialism becomes more important in sorting out potential candidates for jobs, more education or whatever. This results in an over-inflation of the values of credentials, especially educational ones.

    This also produces a guild system, where more and more "professions" require more and more education - as exemplified by Dr. T's remarks. In some fields, an individual is a student for 35 years. For example, anyone doing research in biological fields will need not only a PhD (and maybe an MD), but also years of post-doc work. All of this at slave labor rates and dictatorial control by the elite who have made the grade. Medical specialties are similar.

    This is not only a sign of more information needed, but a sign of an increasingly inefficient educational system.

    If we could break the myth and recognize that college education is primarily for two purposes, we could improve things a lot:

    1) Learning a trade/profession (or preparing to be a professor/researcher)
    2) Making connections with people

    This is true whether one is to be a highly specialized doctor, or a school teacher. The system (and expectations) need to be adjusted for this.

    If our pre-college education isn't enough to teach the basics of citizenship to our students, then we should overhaul it, not push the uninformed students on to expensive college.

  6. Fred Z:

    Took me a long time to understand there are only two rules: .

    One: Provide value, provide something, good or service, that people want.

    Two: people want what they will pay for and they want it exactly to the degree that they will pay. Ignore what they say they want, for they lie and deceive even themselves. Ignore what Coyote says they want, for he is not a mind reader, not that most buyers have minds to read. Above all ignore what politicians or civil servants, especially Democrats, say they want, for they are liars and stupid to boot.

    Watch them haul out their wallets and hand over cash, spondulix, coin of the realm. When they stop, you'll know they want it and exactly, precisely, perfectly, how much they want it.

    If you follow these two simple rules you will have an income commensurate with your mix of luck/knowledge/skill/work and how much people want what you are providing.

    There, better knowledge than any college could ever get you. Make your checks payable to 'Fred Z' and send them c/o Coyote blog. What, no checks? Proof that people really do not want knowledge and will go to almost any length to avoid it.

  7. Aaron:

    Compelling argument. What you subsidize, you get more of. Government investment in education expands knowledge workers relative to market demand (in some cases), which depresses wages.

    Wait until the US government has to raise income taxes to fund Social Security.

  8. bluntobject:

    "But in a university, it tilts the entire institution towards a focus on teaching interesting things vs. teaching useful things."

    In a university that's focused on research (one with a graduate programme, say), most of the faculty are hired and promoted based on their research, not their teaching. Teaching performance (student and peer evaluations, number of classes taught, etc) is sometimes used as an excuse to not give someone tenure, but it's rarely a primary focus. This is fine if you see research universities primarily as places that generate new ideas (new superconducting materials, say), and it works well for turning grad students into researchers, but it's not so great for churning out junior software developers (or whatever). I've only seen this on the hard-science side of campus, so I have no idea how it applies to your liberal-arts example.

  9. Veracitor:

    I realize your post is really about higher education, and I agree with what you wrote about that. I just can't resist trying to correct a couple of misapprehensions in your little comparison to housing. While it is true the government promotes homebuying (recently promoting it so much, with NINJA 105% LTV loans, that they blew the whole market into a giant bubble-- which was bound to and since has collapsed in ruin), you cited the wrong mechanisms, and those don't work the way you suggested.

    You wrote: "The Federal Reserve has pursued a policy of keeping interest rates low, further decreasing the cost of owning."

    Well, the Federal Reserve keeping interest rates low definitely did not decrease the cost of owning, since favorable interest rates are instantly capitalized into housing prices.

    It would be more accurate to say that the Federal policy of giving no-money-down mortgages to un-credit-worthy buyers decreased the cost of (pseudo-)owning for those buyers only. The actual cost of owning has obviously risen for everyone else. I am living proof of that. When I moved to SoCal a few years ago I could not prudently afford any desirable house in SoCal even though I had $100K in cash for a down-payment and earned about $90K/year.

    Indeed, the "cost of owning" has increased even for people who bought housing before the big run-up. Pre-bubble owners suffer from greater opportunity costs (own vs. rent) and in many states (not CA) increased property taxes consequent to rising assessments.

    You also wrote: "Mortgage interest is one of the few personal expenses that is tax deductible, giving people a strong financial incentive to shift from renting to owning."

    If you think about it for a few moments you'll agree that the mortgage interest deduction does not promote owning over renting, for the simple reason that landlords (e.g., of apartment buildings) deduct mortgage interest too (and most rental markets are, in fact, fairly competitive). Interest on mortgages for both rental and owner-occupied housing is deductible, so deductibility doesn't affect the balance between them.[1]

    There is a different income- tax policy which promotes buying over renting: the imputed rental value of "owned" housing is not taxed. There are good policy reasons for this (it is hard to put dollar figures on imputed rents, and it would be very difficult for many people to pay taxes in cash on imputed income). Still, any accountant, much less an economist, will confirm that the tax break is on imputed rent, not mortgage interest. (The tax a landlord pays on rent he collects is somewhat ameliorated by his deduction for depreciation.)

    [1] Some foolish or innumerate people may overestimate the actual value of the mortgage interest deduction when they set out to buy a house or condo, but the aggregate effect of such errors is just to push up house prices, thereby deterring purchases by the some of those people who overvalue the mortgage-interest deduction.

  10. Joe Antognini:

    I wouldn't really expect this to come of a physics degree since that's a little more practical than your run-of-the-mill liberal arts degree, but you know you have too many college graduates when...

    "Physicist applies for sweeper's job in S Korea amid economic slump"

    "A jobless scientist with a doctorate in physics has applied for a street sweeper's job, reflecting the severe economic slump and rising unemployment, officials said here Friday."

  11. jaycee:

    When trying to push up home ownership rates, or university course participation rates, government loses track of the fact that when buying homes or looking for well-paying jobs that need a degree, home purchasers and degree holders are in competition with other people buying homes or looking for jobs.

  12. Noumenon:

    I guess I suck cause I can't find what % of all degrees are in liberal arts. It seems small.

    I was under the impression that if you possessed points #1-8, college would certify you as having them and then someone would snap you up. But no, me and my math degree are measuring the width of plastic sheets.

    btw your page shows up on a white background for me until it finishes loading -- then it turns gray with the stripes. Dunno if that helps.

  13. Jeffrey Ellis:

    I find it rather funny that Michele Obama thinks nurses are not part of "corporate America." The medical industry is Big Business. What she seems to be implying is that if you are in any field considered to be "compassionate," it can't be part of corporate America, and if you're part of corporate America, you can't be doing anything compassionate. (Wal-Mart's wonderful response to the Katrina debacle notwithstanding, of course.)

  14. John Rose:

    I agree with most of what you've said, but in the push to reconsider the value of a traditional 4-year liberal arts degree, we should still encourage continued education. The job market of the future is unlikely to have unmet demand for high-school graduates, and there are a lot of options out there for technical training even at liberal universities.

    A lot of this is just a generational thing- an echo of the 60s, when people were rebelling against being told what they had to do. Generations X and Y were coddled, but their school loan burdens and post-graduation angst will have the effect of balancing that out for future generations. Even then, there will be a lot of aimless liberal arts majors, simply because their family's financial situation gives them that luxury.

  15. joshv:

    I define a bubble market as a market where the cost of a product significantly out-paces inflation (and thus wages) for an extended period of time. By this definition, higher education in the US is deep in the midst of a bubble market - and it's mostly because of government subsidies and this idiotic "progressive" ideal that everyone ought to get a 4 year degree (liberal arts or otherwise).

    Proponents of universal college education point to the statistical correlation between education and future earnings. I will point out that correlation is not causation. Perhaps the causal arrow points, at least partially, in the opposite direction. I contend that smart people are more likely to make money than less intelligent people, and smart people are more capable of attaining a college degree.

    Thus there are many people for which a 4 year degree will be a waste. In fact they'd be much better off if they'd received targeted vocational education in high school. The market doesn't much value people of average or below average intelligence (IQ 100 or lower) with a four year degree - think a C average graduate in Sociology (hello Starbucks)- such a person would be much better off if they were trained with a marketable skill or trade. Additionally such training could take place before the age of 18, replacing many years of earnings that would otherwise be lost to college, and forgoing approximately $100k in loans.

  16. Dave:

    Your numbers for the cost of college education and graduate education do not include foregone income (opportunity cost) and so are significantly understated.

    You are violating one of the things you say a college education should provide: the ability to parse elementary accounting principles!

  17. cas:

    The military paid for most of my tuition, from a college which is affliated with a State-sponsored university system. Many of my classes occurred on a part-time basis, and included some (at-the-time) new "on-line" classes.
    My degree helped me to get the current position I have now, but only just qualified me. It DOES pay much better...
    Maybe it makes a difference if it is a Bachlor's of Science, vs. a Bachlor of Arts, degree?

  18. Erica:

    I remember reading a few months ago an article that has (I believe) some of the "killer statistics" on the college-as-the-American-dream issue:

    (That was the post that got Open Education a regular slot in my RSS reader; while it is not the most statistic-dense post there, it closely corroborates your point here.)

    More statistics on graduation rates in this one:

    And also supporting your point re: not needing an Ivy League degree, in particular:

    (I am not affiliated with the Open Education site - it just has damned good articles on this topic, and I care about the topic a lot.)

  19. rxc:

    I would only add one more skill to your list: The ability to think critically about what people tell you, and to separate valid information from BS. This needs the numerical skills that you list, plus some understanding of statistics and probability, given the large amount of information that the media put out about "risk".

    Regarding the value of a liberal arts/social "science" degree, I guess they are useful to socialize people who can't do logic or math, and provide some sorting process for jobs that involve high amounts of people contact. Unfortunately, too many of these people also end up in policy positions, including especially politics, or they end up in positions that influence public opinion, such as journalism. It is because of the sheer volume of this crap that is dissimenated that we need the critical thinking skills.

  20. xpatUSA:

    DrT wrote:

    "The problems of massive and inappropriate college attendance will continue unless we can convince the educators and politicians that most teenagers will do better with trade- and career-oriented schools. We still need plumbers, mechanics, drivers, pilots, maintenance workers, construction workers, surveyors, commercial artists, refrigerator mechanics, landscapers, etc. None of those careers require four years of college."

    Well said, Doc.

    It's like that college attendance will decline quite dramatically over the next few years, along with a reduced requirement for graduates who are of no practical for anything.

    Where I'm from there used to quite separate career paths. We kids took a test at 11 yrs old which basically split us into either technicians, tradesmen, bin-men etc - or engineers, architects, and such.

    The country thereby got what it needed, at least up until the late fifties when the first wave of "reverse out-sourcing" appeared and snapped up all the low-paying jobs ;-)


  21. xpatUSA:

    What I really meant to say was:

    "It’s likely that, as people tighten their purse strings, costly college attendance will decline quite dramatically over the next year or more, along with a reduced requirement for the aforesaid graduates who are of no practical use for any real, economically productive task."



  22. Noumenon:

    I find it rather funny that Michele Obama thinks nurses are not part of "corporate America." The medical industry is Big Business.

    I think what she means is that nurses are not part of the managerial class that makes the decisions in our society -- where things get built, how resources are employed, how the pie is divided. They just basically punch a time clock.

    Corporate America is the guys who decide what medicines go on the formulary, whether the hospital will buy more MRI machines or more ER assistants, and build things like HMOs that fundamentally change the way healthcare is purchased.

    She does mention corporate lawyers, who don't actually make the decisions either, but they're the enforcers.

  23. SunSword:

    You overlook a key point related to the 4 year degree. Way back when (30 years ago) the standard approach was to have job applicants take tests -- generally 2 categories (a) an "IQ" type test, and (b) a "job skills" type test. But. Then companies started getting sued because too many minorities were flunking the test and they were branded as racist. Thus, in defense, the companies started to use the 4 year college degree as a proxy for the test. Assumption was, if you could get a degree, you were both smart enough and trainable enough for the job. And the company couldn't get sued (successfully).

    And that, friends, is the real driver for the 4 year degree. Companies want it on the resume as a hiring requirement.

  24. Scott Wiggins:

    Michelle Obama was making something like 400k/year as a vice President of Community and External affairs at a Chicago hospital. No, she's not corporate or interested in making money...She's just delusional.

  25. Scott Wiggins:

    Correction...Michelle O was making around 100k per year and it was tripled to 316K per year when Barack was elected to the US Senate. It's the Chicago Way! Funny how all this is ignored by the media.

  26. Scott Wiggins:

    As a young Marine Officer, I was taught that Marines expected their officers to set the example. Meaning, they expected them to set high standards in all things Marine such as physical fitness, personal appearance, personal conduct, technical profiency. In essence, they expected leadership by example...I'm not saying that our college students need to be Marine Officers but...How about graduating with some sense of leadership that will pay-off in civilian careers. To your list, I would add some things like physical fitness, dress and personal conduct, verbal communication skills along with writing skills you mentioned, and of course a strong work ethic. These skills will pay dividends whether the grad goes into a business or technical environment. I'm pretty sure these are more traditional skills that were expected of all graduates back in the days before we decided that everyone needed a college degree. They are just as relevant today however.

  27. Sean Wise:

    I know this is really off topic but when I saw home ownership and education together and then that the government supports these things the first thing that popped into my head was, what are the three things that government encourages us to pursue? I would say it is education, health care and home ownership. But pushing these things with easy money to finance or make someone else pay for them does not make them affordable. It actually makes these more expensive. The cost of education rises at 3x inflation, medical care is 2.5x inflation and housing costs vastly exceeded the inflation rate until the bubble burst. So consistant government promotion of certain things, increases their price and often puts them out of reach.

  28. Amy:

    You have a lot of really good points, but (as someone who sees first hand through her boyfriend, who is currently going back to get his bachelors because of the lack of opportunities he has currently) a college education is still worth something in the market. The average salary jump from high school graduate to college graduate is something like $40k - and many jobs won't even glance at your resume if you don't have a degree of some kind on there, no matter what your major was. At the very least, the degree shows you have some kind of motivation and intelligence, which a high school diploma is less and less an indicator of these days.

  29. JimBob:

    How in the world do all you apparently smart and practical people, who go 4/5 of the way towards understanding this dynamic, come up with government and politicians as the root of the problem? Who do you think compels almost all high-schoolers to go to college and who ends up paying for much of it? How about parents - the same citizens who work in corporate jobs, teach in the schools, write the blogs and do all the other things that make this country what it is.

    Why in the world some of you blame Michelle Obama, or any other academic or political figure, for this system of entrenched expectations runs counter to the prevailing political sentiment I sense among you: personal responsibility and accountability. What I'm hearing is that many of you loathe the government for trying to engineering social outcomes, and yet you're willing to give it far too much credit for an outcome you (the people) are roundly responsible for. WAKE UP or SHUT UP.

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