Why Obama's Free Community College Education Is Just Another Inane Obama Idea

As we discussed yesterday, President Obama in tonight's State Of The Union address is going to propose that the Federal government raise taxes and fund a Federal government program that would provide a free community college education for any American who wanted it. The estimated cost of this program would be $60 billion over the first ten years of its existence.

Yesterday, we showed how stupid and worthless it would be to raise taxes to fund such a program since the Federal government wastes so much of our tax money as it is already. From the Pentagon to the National Science Foundation to Federal welfare programs, just tightening up the waste and criminal fraud that is rampant in these existing programs would easily pay for the $60 billion cost. 

That is why no American, rich or poor, should pay a penny more in taxes to fund this program. It can easily be funded by Obama and the rest of the Washington political class actually doing their job to protect taxpayer wealth they have control of now.

But just because you can do another government program is no reason to say you should do a new government program. Let's look at some reasons why this is such a bad idea, regardless of how it is funded:

1) First of all, lets be clear that this program, if approved, will not cost $60 billion. I know of no major government program that has ever come in at or below cost. The "Big Dig" road project in Boston was supposed to cost a few billion dollars and ended up costing over $20 billion.

Chris Edwards, writing for Cato back in September, pointed out that the new train station being built at the site of the destroyed World Trade Center towers was supposed to cost under $2 billion. The project is now eight years behind the schedule and the estimated final cost will likely come in between $3.7 and $4.0 billion or about double what the project was sold to the public for.

The Wall Street Journal reported on a bridge that was supposed to connect Oakland to San Francisco at a cost of $1.4 billion. The final cost of the project is likely to be as high as $6.4 billion, more than four times as expensive.

Obama Care was not supposed to "add one dime to the national debt" but in reality will add over a trillion dollars to the national debt.

Former mayor of San Francisco, Willie Brown, at least had the honesty to tell us the truth when talking about a local project he oversaw: "We always knew the initial estimate was way under the real cost. Just like we never had a real cost for the Central Subway or the Bay Bridge or any other massive construction project. So get off it. In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.”

Obama's $60 billion cost estimate just digs the hole, you can rest assured that more taxpayer wealth will end up being needed to fill it in.

2) We have previously reported on how for-profit schools have taken the American taxpayer for a very expensive ride. The Federal government, using taxpayer wealth, helps to fund the tuition at these schools, many of which are offering very inferior educations. 

The strategy of the schools has been to get as many students enrolled as possible to maximize the revenue they obtain from the Federal government. Once the students are enrolled and their tuition paid for by the taxpayer, the schools could care less if their students get an education, they already have the money.

We outlined how the fraud and money grubbing occurs from a previous post:

- An article in the September 21, 2011 issue of The Week talked about the potential for defrauding the Federal government via scams from the for-profit colleges and schools:

• There are 2,000 for-profit colleges in the country which serve 12% of all American students involved in higher education today, up from 3% ten years ago.
• Critics contend that these colleges mislead applicants about loan costs, overstate the post graduation salaries, target the homeless and disabled veterans to increase enrollment, and provide dubious educations and degrees that do not lead to better paying jobs and careers.
• As an example, they cite the University of Phoenix, the market leader, which graduates less than 9% of its students in six years.
• Bridgepoint Education posted a $216 million profit last year from its 78,000 students despite the fact that 84% of its students drop out within two years of enrolling, the school has 1,700 recruiters but only one job placement person on staff, and according to Senator Tom Harkin, the school is "an absolute scam."
• Many students report worthless degrees with mountains of student loan debt after attending these for-profit institutions.
• The largest for-for profit company has annual revenue of almost five billion dollars and the CEO of another leading for-profit education company took down an annual salary of $42 million, sixty times more than what the president of Harvard University made.

Why should the American taxpayer care about this seemingly shoddy education performance and experience? According to the article, about 75% of the revenue for these companies running the for-profit schools comes from the Federal government via grants and loans. At Bridgepoint Education, 87% of their revenue comes from the Federal government.

A recent Congressional committee report stated that "Some for-profit schools are efficient government-subsidy collectors first and educational institutions second." Some critics claim that the for-profits intentionally target poor and minority students for the express purpose of leveraging their status to get Federal government aid money, which has grown from $4.6 billion in 2000 to $26 billion today.


Don't think for a minute the same thing will not happen when the Federal government incrementally moves tens of billions of dollars into the community college world. Getting Federal dollars will overwhelm the desire to provide a good education at a reasonable price.

3) Simple economics and basic human psychology will cause another problem when something is free. Supply and demand relationships tend to keep price rational and reasonable in a free market. 

However, much like what happened with four year colleges and the massive amount of Federal money that goes to them, by increasing demand for community college educations by reducing the end user/student price by at least $60 billion, the cost for a community college education will go up substantially. It is simple economics, increase demand without increasing the supply, price has to go up. That is why college education costs at four year colleges continually outpace inflation.

When the community college education price goes up, the Federal government will need to put more money into the program to stay whole which will cause more upward price pressure and the death spiral continues on with artificially higher and higher costs.

As with most government projects and programs, the exact opposite happens from what is intended: government interference in a free market transaction results in higher prices and costs, not lower.

4) Let's assume that the the $60 billion cost estimate is really twice as much or about $120 billion, based on our discussion above. I think the cost will be much, much more but let's stay conservative for the sake of discussion.

This comes out to just over $1,000 per U.S.household if the cost was evenly spread out across everyone. Which raises an issue: why should every American household have to kick in over $1,000 so that someone else might get a free community college education? In a free country shouldn't everyone pay for what they want and desire and not rely on the government confiscating wealth from everyone else to give them what they want for free?

5) As we previously reported in this blog, the number of college graduates that are returning home to live with their families is at an all time high since they cannot find jobs in the economy that are commensurate with their college degrees. 

Do we really want to finance more college educated people who cannot find a job because the jobs that the economy needs do not require a college education? I remember reading a story a little while back about how welders had to be imported from China to work on a California bridge project because the buidlers could not find enough American welders to do the work. 

Seems we have plenty of unemployed or under employed college graduates but not enough welders in this country. Why would we want to create more artificial demand for a college education and not be able to do anything with it relative to real jobs  and careers in the real economy?

6) If you really want to improve education int his country, I am sure that if properly spent, that $60 billion would do a much better job if spent on elementary education long before our kids are college aged. We do a horrible job educating our kids relative to the rest of the world, as measured against standardized testing results from other countries.

Find an innovative way to better educate our kids in grammar and high school and the return on that $60 billion investment would be far greater than wasting it on free community college ideas. I emphasize, though, that the $60 billion would have to be spent better and differently than how we currently spend education dollars. History shows that our current status quo way of spending education dollars is basically a failure.

7) And finally, what exactly are we investing in? According to the Community College Research Center website and Federal guidelines, only 22% of community colleges attendees get their community college degree three years of beginning their attendance. Thus, only about one in five community college attendees actually get their degrees, about an 80% failure rate.

Furthermore, only about 15% of community college attendees go on to get a four year degree within six years of first attending a community college, an 85% failure rate. You can bet that these failure rates will go even higher once the Federal government starts subsidizing community colleges with $60 billion. 

Those colleges will look to bring in as many students as possible to maximize their portion of the $60 billion and many of those incremental students will never go on to get a college degree, the same sad story that occurred with the for profit colleges we discussed above.

There you have it, seven good reasons why Obama's free community college idea is a bad idea. And really, nothing in life is free. A free community college education is not free, those costs have not gone away, they have just been redistributed to other taxpayers. And those costs could easily be picked up by government efficiencies, not more taxes as we saw yesterday.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

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http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

Why Increasing Taxes, This Time For Free Community College Education, Is Still A Stupid and Insulting Idea

President Obama is giving his state of the union speech tonight. And one of the main pillars of his talk will be to set up a Federal program so that millions and millions of Americans can get a community college education for free, courtesy of the American taxpayer. 

Today we will not be discussing the merits and downsides of such a program. Tomorrow we will do that, showing once again how this President continues to come up with bad, non-strategic ideas that just end up wasting taxpayer wealth (see: Solyndra, A123, and dozens of other failed alternative energy efforts that burned through tens of billions of dollars for nothing in return, Cash For Clunkers that was actually a money loser for car companies, etc.).

Today we will focus again on our long held premise that no American, rich or poor, should pay one penny more in taxes until the Washington political class and this Presidential administration stop wasting hundreds of billions, if not trillions, of taxpayer dollars every year. This wasteful spending could be used for so much more good, including returning it to taxpayers, if not for the incompetence of the Washington political class.

As a point of reference as we go through, again, the many ways Washington wastes our money, the Obama administration has estimated that giving millions of Americans free community college educations would cost about $60 billion over ten years. Again, tomorrow we will discuss how this $60 billion idea is just another bad Obama Presidency idea.

Where could the Federal government, though, find $60 billion to pay for this free education program WITHOUT raising taxes:

1) One our most popular posts of all time discussed the disgraceful abuse of taxpayer money when the Navy built two ships almost to completion, at a cost of $300 million, and then decided that they were not needed. The Navy then spent another $10 million to turn the recently built ships into scrap metal. Just this single $310 million waste could have paid for almost 5.2% of Obama's community college idea.

That popular post can be accessed at:

http://loathemygovernment.blogspot.com/2011/07/us-navy-ships-for-sale-cheap-never-used.html

2) We also reported previously that the State Department had spent $40 million on a consulate building in Afghanistan and THEN discovered that it would be able to withstand a terrorist attack. Thus, the building had to be abandoned after spending the $40 million. Combining this wasteful spending with the Navy ship example and just these two disasters could have funded almost 6% of the community college idea.

3) Obama commissioned a big study early in his Presidency to find logical and sane ways to reduce his own administration's out of control deficit spending. After a long and detailed study and analysis, the commission came out with its detailed recommendations, all of which were promptly ignored by this President even though he commissioned the study.

One major component of the study was the conclusion that $100 billion dollars could easily be taken out of the annual Pentagon budget without harming our national security. We have covered many stories that dramatically show how much waste and criminal fraud exists within the Pentagon operations so $100 billion is a very attainable goal.

Thus, if Obama had taken his own commission's advice, he could have easily paid for his ten year's worth ($60 billion) of his community college idea with ONE year's savings from Pentagon spending.

4) Staying with the Pentagon, we recently reported on a news report that found that the Pentagon on invested $46 billion in weapons systems that never saw the light of day. One would have hope that the viability or non-viability of a weapons systems would be known well before a whopping $46 billion was spent for nothing in return. 

Even if only half of the $46 billion could have been saved by better management, that single action, that $23 billion could have paid for more than 38% of the community college idea without raising taxes.

5) Every Federal government agency wastes tens if not hundreds of billions of dollars every year on downright stupid projects. These programs benefit no one except the people that get the Federal grant money to pursue their silly and near useless ideas. These inane ideas and expenditures include, but are certainly not limited, to the following real projects that taxpayer money has been spent on:

• A study to estimate when dogs became man's best friend.
• Development of a video game that simulated prom week.
• The State Department spent money on pottery lessons in Morocco.
• The Federal government spent $80,000 to study why the same college basketball teams usually ended up in the thick of March Madness.
• It spent $1 million for analysis of how quickly parents respond to trendy baby names.
• It spent $581,000 on whether online dating sites are racist.
• It wasted $2 million to figure out that people who often post pictures on the Internet from the same location at the same time are usually friends.
• The National Science Foundation spent almost $385,000 of taxpayer wealth to study "Sexual Conflict, Social Behavior, and the Evolution of Waterfowl Genitalia."
• The IRS spent $60,000 on a film parody of "Star Trek" and a film parody of "Gilligan's Island."

We could go on for days but you get the idea. While I think that the President's free community college idea is a bad one, it is certainly better than these stupid and useless studies and efforts. If he wants to fund his community college idea, fund it out of these stupid ideas, not raising taxes.

6) A recent article in the National Review reported that on average, every Fortune 100 company, some of the biggest companies int he world, receive $200 million a year from the Washington political class,courtesy of the American taxpayer. This comes out to about $20 billion a year. If Obama cut this off for just three years, he could fund his community college idea for ten years.

Some of the bigger recipients of taxpayer money include General Electric ($380 million), General Motors, ($370 million), and Boeing ($264 million).  If Obama is so serious about his community college idea, make these companies' shareholders pay for company operations, not the American taxpayer via increasing taxes on any American.

7) And finally, consider an analysis recently published by the Mercatus Center at George Mason University. According to their report, using the Federal government's own data and information:

• In fiscal year 2013, the Federal government improperly paid out $106 billion across 13 government programs.
• While outright criminal fraud was major factor in this wasting of taxpayer wealth, other factors including clerical errors, complexity of rules, and failure to confirm eligibility were also factors that could be corrected.
• This waste is equivalent to over $900 a year for every American household.
• Fixing 56% of this waste in just ONE YEAR could pay for the first TEN YEARS of Obama's community college idea.

The detailed analysis by wasteful government programs follow (double click on the graph for a larger view):

Such a disgrace, embarrassment, and insult to hard working, taxpaying Americans. Even worse, this list does not include the main Social Security program for retirees. Reputable sources we have cited in this blog put the wasteful and criminal fraud of that program at over $100 billion a year also, more than enough to fund the community college idea for well over ten years.

No American, rich or poor, should pay another penny in taxes, when these wasteful actions continue under this Presidential administration and Washington political class. Just like an American household, if you want something you cannot afford, economize your spending somewhere else. And in this wasteful government bureaucracy, the ability to economize is seemingly endless and easy to do.

Just because the Federal government could find the ways and means to pay for this $60 billion idea by tightening up its spending, does not mean it should. Tomorrow will be the discussion on why this is just another silly, free floating, non-strategic tactical plan from this President who has shown no ability to think strategically or to operate efficiently.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w