by John Shaffer
Health insurance under Obamacare is not free – although the President’s people tout the “success stories” of people who once paid $450 per month now being charged $46 – the cost remains at $450 (or more) – it’s just that someone else is paying it. And yes, that someone else is the taxpayers. It must be the same with the “free” community college – and the taxpayers will be on the hook for anywhere from $30 billion to $60 billion dollars (that we don’t have) so the President can give away “free” college.
Back forty years ago, college was enormously expensive – and despite billions and billions of dollars spent on student loans and other ways to lessen the expense of college – the cost has soared since then. It is basic economics: a good (in this case, college education) is too expensive – so we get third parties to underwrite the cost. But the cost keeps rising – because the price system has been subverted and the incentives to hold down costs have disappeared. One would think that institutes of higher education would be in danger of pricing themselves out of the market; come to think of it, that is exactly what we have allowed to happen – except the taxpayers have covered much of the cost. It's the worst of both worlds - the prices rise and rise, even as demand rises. It's a recipe for runaway costs.
There are many ways to make items more "affordable," and almost all of the successful ways use free-market principles. Big government is in conflict with the free market, and it seems the more regulations and controls that it places on any given industry, the worse the situation becomes.
In a well functioning market, when the prices of a good become too heavy to bear, people stop buying it altogether, or reduce their demand for it, or find less expensive alternatives (such as community colleges instead of four-year schools or universities.) This brings pressure on the provider to reduce prices. But if we give away that good, the pressure to drop the cost disappears. If we give away community college educations, we will vastly be increasing the demand for them, which will result in higher costs and greater expenses.
One thing for sure – if the US Treasury ever does decide to cover the costs of two years of “free” community college, the cost of that generosity will soar, and what might be a $30 billion bill to start with will climb dramatically in subsequent years, because the cost will be underwritten and the incentives to hold the cost down will vanish.
Back during the debate of "Hillarycare" in the 1990s, a wise person observed, "If you think healthcare is expensive now, just wait until it is free." The same holds true with everything the government gives away - from Obamaphones on up. The out-of-pocket cost can be eliminated or reduced for the ultimate consumer - but only if some other party pays for it; and the costs will continue to rise incrementally (often even faster).
A similar thing happens with almost everything the government inserts itself – the regulated industries or the ones that are most heavily controlled or influenced by government, such as healthcare, utilities, education and insurance, are the ones where the costs jump the most, and almost never come back down. Food prices, even oil prices, can soar but they also tumble. The cost of education and healthcare, for example, almost never tumble. Although the President might really think that he has made them free by having someone else pay for them, they really aren’t free at all.