<p>The Bloomberg article that appeared earlier on this subject - “Lawmakers eye universities’ tax status” - elicited interesting responses, some of a quite different order, from CC posters:</p>
<p><a href=“http://talk.collegeconfidential.com/showthread.php?t=397583[/url]”>http://talk.collegeconfidential.com/showthread.php?t=397583</a></p>
<p>bruno:</p>
<p>It depends on what one means by research. In the humanities and some of the social sciences, research is funded by funds provided to professors by their own institutions (it’s called research funds). </p>
<p>There is certainly some waste at various universities, but the amount of savings achieved by reducing waste would probably not be sufficient to make a significant dent into the cost of educating students and conducting research. Much of that research is basic research, i.e., with no immediate practical benefits. When my H was doing his Ph.D. nearly 50 years ago, the practical applications of his research were nil. Forty years later, those applications have made a significant contribution to public transport systems in several countries. I doubt that Congress or the general public have the patience to think 40 or 50 years ahead; but universities do.</p>
<p>A better solution: Raise taxes on the ultra-rich in order to make college actually affordable for the average person. Our country is shooting itself in the foot (actually, more like shooting itself in the heart) by allowing a tiny fraction of 1% of the population to make so much money, while simultaneously failing to educate millions of its own citizens. </p>
<p>Down the road, the fact that people are not being educated is going to turn America into a third-world country.</p>
<p>If Congress can’t take action to preserve the middle class in America, Congress should be disbanded.</p>
<p>PosterX notes,"A better solution: Raise taxes on the ultra-rich in order to make college actually affordable for the average person. "</p>
<p>Response; Yes, we should soak it to the rich and subsidize the poor regardless of whether their situation is due to their choice of occupation, circumstances, or due to laziness, ineptness or plain stupidity. Lets subsidize them anyway. ( Sarcasm)</p>
<p>Read Atlas Shrugged and Fountainhead by Ayn Rand.</p>
<p>Sure, taxguy, let’s make sure that nobody can afford an education, and in the meantime let’s also make sure that immigrants, our hardest working and most striving class of people, can’t go to college, either (most immigrants in this country still aren’t eligible for in-state tuition rates). Let’s not only not “subsidize the poor”, let’s also just make sure that anyone making less than, say $200,000 per year stays that way and in fact, that they get poorer and even less likely to get an education. Above all, let’s make sure that average debt burdens among graduates of public universities, like UMich, keep on climbing into the stratosphere, in order to ensure that fewer and fewer non-rich people actually decide to go to public universities. As those public university enrollments decline relative to China, we can continue to cut their budgets and will have more money to repay our massive and growing debts to that country, debts which go to finance things like cheap 20,000-SF houses (see below).</p>
<p>Your plan will certainly do wonders for our economy 10 or 20 years from now when everyone else realizes that it is easier to find people who can read and write in China. I agree with you that subsistence farming is a good basis for an economy.</p>
<p>By worrying about anyone who might “soak it to the rich”, you surely must understand that NONE of the ultra-rich’s wealth derives (directly or indirectly) from PUBLIC investments such as our trillion-dollar highway system, court systems, police, firemen, our regulated banking systems, our massive educational systems, hospitals, the FAA, FDA approvals of drugs, government investments in technology, etc. So let’s make sure that the poor and middle class continue to pay for most of those things with their $10-20/hour wages.</p>
<p>Surely you can’t be concerned that anyone in their right mind would deign to ask someone making $1,000 per MINUTE (the average hedge fund manager in NY/Connecticut… some make much more than the average) to pay a bit more of their income towards maintaining those public investments, rather than enabling them to buy a dozen new single-family homes with each day’s salary. You must realize that, someday, perhaps, all those millions of Americans making 100 times what everyone else is might stop investing in things like 20,000 SF+ throwaway houses financed by loans from China that will be worthless in a few years, $100,000 wristwatches and ridiculously expensive cars, and maybe sponsor a middle-class kid (e.g., yes, just one kid who is not from Rockville, MD) to be able to afford a book, or maybe even a class at a local community college.</p>
<p>I agree with Tax Guy. My dad cleaned windows and my mom worked also. I went to Queens College (CUNY) because we couldn’t afford more than that. </p>
<p>Anyone can get a college education if they want one, without going into major debt, let’s be real. </p>
<p>No one is entitled to a Harvard education just because it isn’t fair that the rich lead a different life from the rest of us.</p>
<p>Life is tough, what else is new.</p>
<p>Yes, Barno, life is tough, so let’s make sure it is even tougher for our country to educate its citizens. I am not doubting the individual success stories like yours, but the overall trend is that our country is moving towards third-world status, in part because there is so much waste and so little investment in our future.</p>
<p>Barno–but at least you were qualified for CUNY.</p>
<p>The problem is some public schools are so bad, the graduates can’t qualify for a college education anywhere. The problem begins in elementary, middle, and high school and compounds along the way. (Not to blame all our problems on schools or teachers–many kids come from families where education isn’t valued, where children are raising children or the children are in fact raising themselves and learn quickly that the way to easy money is to deal drugs or otherwise live outside the law.) But that is for another thread.</p>
<p>What I understand is the endowments are so large because investments are doing well. The stock market could plunge and easily wipe out much of that “surplus.”</p>
<p>“The stock market could plunge and easily wipe out much of that “surplus.””</p>
<p>Insane levels of inflation are much more likely. Get ready for $90 per gallon gasoline and $25 cups of coffee within a very short period of time. But, yes, endowment values may fall in the relative sense that colleges will no longer be able to buy as much air conditioning, medical equipment, etc. On the other hand, they may be able to hire more workers because wages will be relatively depressed (i.e., wages will stay about the same, but for $50K/year you won’t be able to afford to have a car or a house larger than one bedroom). They just won’t be able to give all those new workers free coffee, unless the rich are taxed in order to subsidize coffee purchases. The coffee will be a luxury especially if the health care system stays the way it is now, because the cost of that is going up faster than inflation due to simple material considerations.</p>
<p>posterX, how do you get to sleep at night?</p>
<p>posterx,</p>
<p>What are you basing your theory on? Peak oil?</p>
<p>The U.S. dollar is becoming increasingly worthless. Not a surprise given our account balance: <a href=“Forums - iTulip.com”>Forums - iTulip.com; Unless there is a fundamental change (which is incredibly unlikely), pretty soon you’ll need to be a millionaire just to afford a cookie, figuratively if not literally.</p>
<p>That, in and of itself, is not enough to create hyperinflation.</p>
<p>Oil has just hit $88, and the U.S. hasn’t even begun to repay its debts yet. The dollar is currently supported by foreigners. When that ends, $25 coffee.</p>
<p>Based on what supporting theory? Most of the economists here at UCSD suggest that consumption smoothing is likely to stave off any violent swings.</p>
<p>Besides, every currency is supported by “foreigners” to an extent. The use of the dollar as de facto financial foundation for the world is what made Bretton Woods work.</p>
<p>Of course it is true that consumption smoothing will mitigate “violent” swings. You can’t keep having more and more credit without inflation. By consumption smoothing, though, what they mean is that the “average” person (not the “average” millionaire) will not be able to afford a car or a house larger than one bedroom. Already, you see families with two cars starting to downsize, and people who took houses that they couldn’t pay for trying to sell them. There are only so many resources to and the U.S. is certainly not the only country in a position to be able to pay for them, especially with its enormous debts. But that’s probably a good thing - the U.S. currently uses more oil than the next five oil consuming countries combined, and bringing our nation’s consumption more in-line with the rest of the world, through “consumption smoothing”, will probably be a good thing for the environment as well as the national psyche. All I was saying is that continued inflation, and the continuing hardship of the middle class and poor who will be able to purchase less and less each year, is much more likely than the wiping out of the stock market. “Violent” swings may be unavoidable, of course, if the oil and resource shocks are greater than predicted.</p>
<p>posterX,</p>
<p>I’m fully aware of what they mean by consumption smoothing, but very few people seem to have such a pessimistic view as you do. The “average” American will be VERY unlikely to be in such dire straits as you suggest.</p>
<p>Do you have any papers that suggest this, however? I’ve yet to come across anything as extreme as you’ve suggested.</p>
<p>PosterX, I will only respond to you this one time.</p>
<p>The rich are already soaked. They pay much higher taxes. In addition, when a school charges $30,000++ in tuition and fees, do you really think that it costs them that much to educate a kid? For profit schools are much less. If you have seen the schematic of where the money goes, you would understand that much of that money is used to subsidize others either for research, grad students or to subsidize needy cases.</p>
<p>Take Syracuse as an example. We sent out daughter to Syracuse during a summer for a pre-college art program that cost $5,000. However, I found out that fully 25% of the kids that participated in this program attended for free! Believe me, richer folks are already being soaked in many ways. </p>
<p>Finally, even if I agreed with you that there should be a surcharge on those making in excess of say $400,000 for educational subsidies, it won’t happen. It doens’t work that way. The government will simply waste the money on $600 hammers and the like. </p>
<p>Take the airport taxes. These are found on all airline tickets and were supposed to be used to pay for airport improvements. There was recently a published article noting that very little of this money was ever used for airports in any way!</p>
<p>How many bridge and highway tolls are institute under the guise of “Needed highway improvements,” which resulted in simply filling up the state coffers and used elsewhere?</p>
<p>Think about what is going on today. Lets say you are a parent who isn’t rich but saved money each year for your kids’ college. You scrimped and saved, penny- pinched and, frankly, did without many of life’s benefits so that you could achieve this. What you have achieved is NO financial aid for you or your kids!</p>
<p>Now lets take a spend thrift parent who spent like mad. They did very little savings but maybe took nice vacations and had nice cars. They can qualify for lots of aid. This is shocking to me…period!</p>
<p>Finally, no where in our constitution does it say " all Americans shall be entitled to attend expensive private schools." If someone can’t afford it, they could attend many inexpensive public schools or even start off in a junior college ( and there are a number of good ones here in the US), and transfer to a four year school. </p>
<p>You mention immigrants. Many immigrants came to this country with nothing. They attended public and city schools and achieved a great deal of success. This was particularly true for the City University of NY and, I am sure, elsewhere. Kids can attend many of these places,which have gone begging for more students. The quality of most state schools is quite good as is the price.</p>
<p>Someone once said, and I wish I could remember who, that democracy will fail when the average citizen realizes they can vote themselves a raise,which is what you are espousing. Again, read the book, “Atlas Shrugged” by Ayn Rand.</p>
<p>In my opinion, it’s already pretty extreme that “average” people can’t afford college tuition, and are still getting paid $5-10 per hour to flip hamburgers when the price of milk is rising by 10-20% per year. The coming “consumption smoothing” as the U.S. repays trillions of dollars in debt will only make things much, much worse for the middle class. </p>
<p>Bretton Woods ended in the 1970s in favor of a floating system; “Bretton Woods II”, the current system of temporarily pegged currencies, may end much more abruptly and with greater disaster.</p>
<p>Taxguy, </p>
<p>Ayn Rand has no empathy. I liked “The Fountainhead”, but when I heard her interviewed…what a turn-off. </p>
<p>There is a difference between trying to build something great and getting a lot of interference by people less able, and helping your fellow human beings. </p>
<p>Anyone who hasn’t read her, don’t bother.</p>
