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:

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

Miscellaneous Missteps, Mistakes, and Misses From the Political Class

One depressing aspect of writing about the American political class is that you rarely get to write about bold steps, great government programs, and direct resolutions of problems. Instead, it seems we are constantly overwhelmed with their missteps, mistakes, and misses on major issues facing Americans. Consider:

- The October 14, 2011 issue of The Week contained a story about the failed Federal government program on mortgage support and relief for struggling homeowners. The program has been a failure since it started last year:

• Although funded with a billion dollars to help unemployed homeowners with their underwater mortgages, the program closed after a year with only half of its budget spent. Imagine that: a government program that did not spend all of its budget, you know that it must have been a bad program.
• The article claims that the program was plagued by poor administration and onerous qualifying rules and guidelines.
• Because of the strict eligibility guidelines, less than half of the intended 30,000 recipients received half under the program.
• A Dallas consumer credit counseling center helped more than 1,000 homeowners file the necessary paperwork, only to see about 80% of the needy homeowners get rejected by the program's strict income guidelines, i.e. in order to get government help for mortgage relief as a result of  the homeowners did not having a job, they needed to adhere to strong income requirements, which they could not because they often did not have a job.

Thus, a program that was supposed to help tens of thousands of homeowners probably ended up helping out only thousands of homeowners while there are millions of American homes in foreclosure.  Is this a misstep, a mistake, a miss or all three?

- 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.

As a result, according to Education Secretary Arne Duncan: "Millions of low income students are borrowing heavily to attend for-profit colleges and too many of them are dropping out, failing to to get a job, and leaving the taxpayers with the bill. In the meantime, many of the for-profit colleges are getting rich off of Federal grants and support.

Although the article points out that the Federal government is finally starting to crackdown on the fraud and waste in the program, citing the recent suit against Education Management Corporation which is accused of fraudulently charging the Federal government for $11 billion for student aid over the years, one always has to wonder 1) why it took so long to do the right thing and crack down on the fraud and 2) how much taxpayer money has been wasted over the years and how much will continue to be wasted in the future?

At $26 billion a year, this inefficient and ineffective program could fund more than half of Obama's jobs program every year. It is the one government program that might do a worse job at creating jobs than Obama's job proposal, wasting money on students that rarely get educated and never get job placed successfully. Missteps, mistakes, or misses?

- According to an April, 2007  Newsweek article by Fareed Zakara, as reviewed under Step 25 in "Love My Country, Loathe My Government," China and India were scheduled to open up more than 800 coal burning power plants between 2007 and 2011. This comes out to about 160 plants new coal plants per year, three per week, coming on line.

The article estimates that just these new coal plants, not existing coal plants in China and India, will dump 2.5 billion tons of carbon dioxide into the air every year. Certainly a cause for concern regardless of whether or not you believe in man made global warming. 2.5 billion TONS is a lot of air pollution.

So what is the political class doing about it? Apparently nothing since they are preoccupied with what American asthma sufferers put into the lungs to be able to breath. According to an article in the Weekly Standard on September 23, 2011, the Obama administration banned the current set of asthma relief inhalers that most asthma sufferers use, as of January, 2012. The reason? An international treaty that seeks to reduce the amount of chlorofluorocarbons released into the air in an attempt to protect the ozone layer.

But these asthma inhalers do not release chlorofluorocarbons into the air, they are released into a person's lungs so that they can breathe easier. However, the Federal government is banning them and forcing Americans to use a different type of inhaler which will cost anywhere from 50% more to three times as much per inhaler.

Let's see, focus on getting the Chinese and Indian governments to reduce the incremental 2.5 billion TONS of pollutants their new power plants will put into the atmosphere every year or make Americans pay more for different medical relief from asthma for the medicine they shoot into their lungs, not the air, different medical relief that may not work as well? What is the better priority and better use of government resources? A misstep, mistake or miss on the part of the political class and Federal government?

- According to an article in Fortune magazine, that was summarized in the October 14, 2011 issue of The Week magazine, prices for prime Midwest farmland have risen 17% on average over the past year as a result of rising food prices and the growth of the corn ethanol market. Thus, tell me again why the American taxpayer still pays Americans farm interests tens of billions of dollars every year in farm subsidies, subsidies that mostly go to big agriculture corporations and not family farmers? Missteps, mistakes or misses when it comes to wasting taxpayer money via corporate welfare?

- The last misstep, mistake, or miss comes from a recent Associated Press news article. The U.S. Senate has voted to block an Obama administration proposal that would limit potatoes in school lunches. It seems that the administration is worried about too many kids eating too many French fries at lunch time in our schools, wanting to restrict schools to two servings a week of potatoes and other starchy vegetables.

The U.S. Senate actually took formal government time and resources and voted to accept an amendment by Republican Sen. Susan Collins that would block the government from putting any limits on serving potatoes or other vegetables in school lunches. Collins is from Maine, a potato-growing state.


14 million Americans unemployed, national debt fast approaching $15 TRILLION, pubic schools in this country still undereducating our kids on average, leaky borders, three foreign military conflicts underway, no national energy policy, health care costs up 9% on a year over year basis, the country as divided as ever, a President who would rather politically campaign than actually execute his Presidential duties, the economy on the verge of another recession, etc. Do our Senators really believe that the great potato debate should take precedence and attention over dozens of other more important and more pressing issues facing the majority of Americans today? Misstep, mistake, a miss or just plain pathetic?


You look at these constant, unrelenting misses, in whatever form they appear, and you begin to see the imperative need for Step 39 from "Love My Country, Loathe My Government," the need to impose term limits on all Federally elected positions. The current crop of politicians has been in office for so long that they no longer understand the reality of the average American's world.

This is a world and a reality where unemployment issues should be handled before potato issues, a world where wasting taxpayer dollars on fraudulent schools, bad mortgage programs, and agriculture corporate welfare  should take precedence over potato issues, a world where we properly set balances and priorities so that American asthma suffers do not suffer, both medically and financially, when India and China are doing far more harm to the world's environment. Term limits now, less misses later.



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 http://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:


http://www.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/