Why Free College is a Bad Idea

The True Costs of Free College

Germany currently suffers a workforce crisis and has implemented free tuition programs in an effort to combat them. Similar to their Nordic neighbors to the north (Sweden, Denmark, & Norway), the idea was that free college would train younger Germans and international workers to enter the workforce, replacing the aging working class of Germany without taking on massive student debt. Sounds great right?

Eh….not so much. The hard facts of these countries’ free education system explain why free college is a really, really bad idea.

1) “Free college” is not really free.

I hate to be captain obvious, but unless we find a cost-free way to create buildings, textbooks, computers and somehow magically pay teachers and administrators; college cannot be free. Turns out, colleges in Germany are quite expensive, with taxpayers shelling out upwards of 50% (as in half) of their income.

But even with governemnt subsidies, schools in Germany (also the Nordic countries) are not actually free to the students, either. In fact, students of Sweden’s “free college” program carry an average debt of $19,000, just 30% shy if the US student debt. On top of that, 85% of Swedish students graduate with debt, vs only 50% of American students.

 

2) Germans have lower enrollment and graduate rates than the rest of the world, far lower than the US.

Despite having free college available to the public, Germany has both a lower enrollment rate and lower graduation rate than other developed countries. Even with much higher tax burdens to pay for free education, Germany’s college enrollment rate is shockingly low when compared to that of the U.S.

germ

When contrasting raw data from the worldbank, we see that Germany’s enrollment rate is a stark 61%, making them one point ahead of Albania and far below the United States, which boasts an 89% enrollment ratio. The numbers are no better for Germany when it comes to graduation rates. Where Germany still has not reached the international average.

Harsh Tax Wedges

This stark picture becomes worse when considering the significant tax wedges (dollar measurements of income tax rate, the higher the tax burden the higher the wedge) created by free tuition programs. A comparison of 4 countries with free college programs, (Norway, Denmark,  Sweden, and Germany) in contrast with the U.S. suggests that free public college creates significant tax burdens and yields generally unfavorable results.

wedge

German taxpayers pay out nearly 50 cents on every dollar while Americans pay out roughly 32 cents on every dollar. Granted, free tuition is not the sole driver of tax rates, but all countries with such programs have income taxes significantly higher than the U.S. Of particular note, these numbers suggest that as tax burdens for free college programs increase, enrollment actually decreases.

 3) Foreigners, including Americans, take advantage of Germany’s free education.

Part of Germany’s free college plan was to attract foreign students to  get an education and join the workforce. On paper, students should pay for themselves if they stay in Germany for at least five years paying German taxes. While foreigners flock to Germany’s free schools for cheap degrees, they generally take their skills back home with them. Germans have referred to this debacle using words like ‘brain drain’ and ‘exodus from Germany.’

Americans students are doing this in droves, As noted by NPR, more than 4,000 Americans were studying in Germany in 2015. This number represents a 56% increase since 2003. A perusal of this WaPo comment section shows how many Americans are all for studying in Germany. Very few, if any, have intentions on staying in Germany for 5+ years. This BBC article includes a step by step plan of how to make German workers pay for your education.

In 2015, the Expert Council of German Foundations on Integration and Migration (SVC), a German think tank, published a report detailing the perilous nature of the country’s free college system.

The report found that while nearly 80% of the over 300,000 international students currently in school said that they were sure they wanted to stay in Germany, more than half  of these international students leave Germany after their studies. International students in Germany are also 13% more likely to drop out than German nationals.  (41% to 28%)

4) Too many students are taking non-career courses and spending too much time in school.

The Local, which offer’s Germany’s news in english, explains that many students in German universities are spending six years just to finish undergraduate programs before diving into “lengthy masters course(s).”  With such inexpensive school, many students becomes career students, spending years and years studying largely unmarketable topics while never gaining experiences needed for employment.

The problem of the perpetual student is not unique to Germany. However, is is notorious in Deutschland. So much in fact, that Germans use the word, “Dauerstudenten”  (Eternal student) to describe these people.

The dauerstudenten epidemic has faced serious concern in Germany, including this interview with a man named Wulf Müller-Wildberg, who attended 57 semesters of free college. You can read the interview yourself, but unless you sprechen sie deutsch, a (rough) google translated version will help you decipher. Here are a few highlights from said (rough) translation (Did I mention that the translation is rough?):

Interviewer: Mr. Müller-Wildberg, which courses you have taken since 1974?

Müller-Wildberg”At that time I had already trained as a gardener behind me. However, because of “chronic underperformance” I get since I was 31 years old, an early pension. So I could begin to study. That the pension was more luck than brains.”

“After four semesters English and German to become a teacher at the University of Munich I changed but for medicine. After 14 semesters at the University of Giessen, although I have taken exams, but not my approbation. Since then I study a little psychology, philosophy and Portuguese in Munich”

…..

Interviewer: Did you never have a bad conscience that you take young candidates to study space?

Müller-Wildberg: “I never had, because getting enough people could study medicine.The state simply does too little for the disabled. A study course and a long study, I found only fair. Furthermore, I have not even exhausted all possibilities. For medicine I am specially changed after casting. Had I submitted my severely handicapped, I could have stayed in Munich.”

 

 

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American Slavery Myths

Myth: American slavery was more barbaric than other slave trades.

Fact: The American Colonies took in only about 4% of Transatlantic African slaves, yet by 1825, only one hundred years later, the US had a quarter of the black New World population. This boom in the African population is a direct result of the differences between American slavery and that of rest of the New World. For starters, slaves elsewhere were typically worked literally to death. In the American colonies, slaves received conditions that, although abhorrent, miserable, wretched and undeserved, were still far more suitable than those in places like the Caribbean and Brazil.

Part of this has to do with the timelines and how the Spanish and British empires differed. Spain began importing slaves to the New World in the 1570s, at which time the average life expectancy of a slave in the New World was only 3 years. In addition, the Spanish brought few women slaves as they never planned on allowing African slaves to have families. Men were brought alone, worked until they died, and then quickly replaced.

In contrast, the land that would become the American colonies did not start importing slaves until the 1720s, 150 years after Spain introduced the Atlantic Slave Trade to the New World. As a result, most American slaves were generations removed from native Africans, many by 4 or 5 generations. In addition, the American colonies had a balance of men and women slaves, and owners allowed for families and a flourishing population for over a century and a half.

Myth: America promoted slavery and made it worse.

Fact: The United States of America was just a small part of just one slavery movement, the Transatlantic Slave Trade, which was relatively small compared to other slave trades both before and after.

Of the nearly 12 million slaves sold in Africa, only 10.7 million Africans survived the Middle Passage into the New World. Of those, only about 450,000 came either directly or indirectly to North America. That number is roughly 4% of the total New World slavery. To add some perspective, Britain shipped over 300,000 Irish slaves, which, along with the murder of 500,000 Irish, reduced the country’s population by 60%. Source 

Even still, between slaves of all races, America’s role in slavery was just a drop in the repugnant, disparaging pond that is one of humanity’s great sins.

From a numbers standpoint, America’s role in slavery is small when compared to other New World colonies and minuscule when compared to the West African countries that exported slaves.

But how about from an ideological perspective? After all, many folks like to claim that American culture and policy embraced slavery. Let’s look at what history says:

First, in the 1770s-80s  the founding fathers wrote the US Constitution and the Bill of Rights. These founding documents were among the first to grant freedom to all men, and while it took several generation for this to actually come to pass, America’s doctrine pioneered the end of slavery.

Next, in 1854, abolitionist conservatives form the Republican Party, or Grand Old Party, as we say, for the express purpose of freeing the slaves. And the first Republican president? Abraham Lincoln.

Then, in 1861, Abraham Lincoln declares war on the confederate states that won’t give up their slaves, and on the vampires threatening to topple the union. In fact, the American Civil War is the only civil war that was fought for the abolition of slavery and over 650,000 men died in order to rid our nation of the sickness that is slavery. (most of them were white BTW)

That’s right, more men died in the civil war than were broiught as slaves/

Now before you come at me with the whole “the civil war wasn’t about slavery” bit. Let me read a letter from your personal hero, Karl Marx, addressed to Abe Lincoln .

If resistance to the Slave Power was the reserved watchword of your first election, the triumphant war cry of your re-election is Death to Slavery….The workingmen of Europe feel sure that, as the American War of Independence initiated a new era of ascendancy for the middle class, so the American Antislavery War will do for the working classes.” – Karl Marx, in letter to President Lincoln

That’s right my friends, Karl Marx called the Civil War the “American Antislavery War.” And if Marx said, well then it has to be true.

Back to the mythbusting, it’s also worth mentioning that even though slavery predates written record and has been a part of nearly every tribe, empire, clan, family and community worldwide, the Christian countries of the Western world (which includes the US) were able to dismantle the practice of slavery and practically wipe it out in the span of only three generations. Not just in their own countries, but worldwide.  (Well except for Africa and the Islamic countries where slavery remained common practice and still exists in some places)

America didn’t promote slavery, America destroyed slavery.

In closing, next time one of your SJW friends tries to tell you how America was a slave nation, show them this video and watch the steam of anger fill their head. But be careful, factual overload has its side effects.  

 

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10 Economic Questions for Americans

bernsterThe following are ten questions that every American needs to ask before going to the polls and casting a vote. The first few questions address general economic issues and history. Next there are some questions concerning current presidential candidates, specifically, Bernie Sanders. The last question deals with the ethics of income inequality and what we as Americans can/should do to end it.

Question #1. How much does the 1% make?

A. If you make $350,000 or more, you’re in the top 1%. A common misconception is that all one percenters are bringing in millions and millions of dollars per year. In actuality, the threshold to become part of the top 1% begins around $340k/yr. The average income for the top 1% is estimated by Forbes to be around $700k/yr

Question #2. When was income inequality at its lowest in America?

inequality

As shown in the chart above, America was most equal in terms of income during the Reagan years of the 80’s. In fact, we see the recent increase in inequality make a big jump in the late nineties and then completely surge since the mid 2000’s. Income inequality has increased dramatically under the Obama administration and now approaches the rates of the 1930’s.

Question # 3. How much of the U.S. budget is spent on the military?

A. Bernie’s plan involves significant defunding to the military. According to the Federal Budgeting Office, 15.88% of the total U.S. budget goes toward funding the military, with an additional 4.19% towards Veterans Benefits. For context, Medicare and Healthcare account for 27.42% of the budget, while 33.26% goes to Social Security, Unemployment and Labor benefits. More than 60% of the entire US budget is currently spent on entitlements, which literally triples the portion of our budget used for military and veteran expenses. 

total_spending_pie,__2015_enactedQuestion #4. How much does the US currently spend on healthcare? 

A. Bernie has said repeatedly that we as a nation don’t spend enough on healthcare and his plan includes investing over $28 trillion dollars into a single-payer system. At this point, the U.S. spends $9,146 per citizen, the third highest ratio in the world and this number has steadily increased year after year. Only Switzerland ($9,276) and Norway ($9,715) spend slightly more per person on healthcare than the US. Even countries with single payer systems such as Canada ($5,718) and the UK ($3,598) spend far less money per person than the United States.

hlthcr

Dollars and cents aside, the real question is not “cost,” but “value.” The American cancer survival rates rank among the best in the world. Waiting times for receiving care, including elective surgeries are significantly lower in the U.S. than in other nations. The U.S. also has the sixth-lowest average hospital stay length.

That’s not to say that the U.S. healthcare system doesn’t have it’s own massive flaws and failures. Both sides of the aisle agree that our system needs repairs and according to Sanders, Obamacare has come up short.

However, the single-payer model may prove too costly for America. Clause Castonguay, the architect of the Canadian single-payer (socialized) system has since opposed single-payer systems and said,

“We thought we could resolve the system’s problems by rationing services or injecting massive amounts of new money into it,” says Castonguay. “We are proposing to give a greater role to the private sector so that people can exercise freedom of choice.” – Clause Castonguay (Father of Canadian Healthcare)

Question #5. What is the current U.S. debt?

A. The current U.S. debt is just above $19,000,000,000,000 (trillion). The economy is losing value and credibility. For the first time since 1941, America has dropped it’s AAA credit rating with S&P. This graphic explains our debt situation in terms of a family budget. Note: Added debt from Sanders’ plan is on the right. (How much new debt? Just keep on reading to find out):

fedspendmod

Question #6. How much is Bernie’s plan going to cost?

The new costs of the Sanders program have been estimated at over $28 trillion for healthcare, with an additional $1.5 trillion in other spending (free tuition, expansion of entitlements, etc), bringing the total just shy of $30 trillion. Simply put, this would nearly double our debt over ten years.

How does this cost compare with anticipated revenue? Well, in earnest, not well. Despite costing an additional $29.5 trillion, all of the revenue collected by Bernie’s plan via taxation, fees, surcharges and the elimination of breaks still comes up about $8 trillion short of covering Bernie’s plan.

cost v rev

What puts the Sanders plan under even more scrutiny is the anticipated effect it will have on the U.S. economy. Economists with the Tax Policy Institute found that Bernie’s aggressive tax policies would actually bring in less total revenue than more conservative approaches. For example, the financial Transaction Tax (FTT) was once a popular policy among European countries in order to reduce volatility and increase tax revenue. However, the FTT has had the opposite effect, increasing volatility and lowering total tax revenue. The FTT has since come under fire from prominent European economists and policy makers. American economists have speculated that, at best, Bernie’s FTT would bring in only $50 billion.

The viability of Bernie’s plan as it’s currently laid out been the subject of many American economists. The preponderance of evidence suggests that Sanders’ ambitious plan, as currently written, would not come close to paying for itself. However,  some have analyzed Bernie’s plan in principle to answer whether the policies could work if taxes were even higher. The following video provides a satirical but honest perspective, complete with numbers, facts and figures to address if and how Bernie’s plan could work.

Question #7. What is Bernie’s tax plan and how does it compare with competitors?

Sanders’ income tax plan includes four new brackets of 37%, 43%, 48%, and 52%. The top rate applies to taxable income over $10 million (not featured in the chart), and is the highest since Jimmy Carter’s 70% rate in 1980. Also, Bernie’s plan increases the top estate tax rate to 65%, while lowering the estate tax exclusion down to $3.5 million. Additionally, Sanders plans to end reduced taxes on capital gains and dividends, meaning those types of income would be taxed at the same rates as ordinary income for taxpayers earning in excess of $250,000. These changes will bring in an estimated $235 billion in tax revenue annually (About 0.008% of the plan’s cost).

When contrasted with the plans of GOP candidates, we see that Bernie’s tax plan includes some massive increases for several tax brackets, while the GOP plans lower the tax rate of all Americans, including deep tax cuts for middle and lower classes. The chart at the bottom enumerates the tax rates per bracket in regard to married families filing jointly (Green indicates tax cut and red indicates tax hike).

Perhaps the most noteworthy takeaway from a tax rate analysis is how the candidates plan on taxing the poor. Under the current laws, families making less than 20k per year pay a 10% income tax rate. Sanders’ plan makes no changes to tax burden of the poor. In contrast, both Trump and Cruz have proposed eliminating income taxes on the poor entirely. Neither GOP plan enforces any income tax until a family makes at least 40k per year. Ted Cruz’s plan also includes the removal of the payroll tax , which will reduce the marginal tax rate on nearly all workers and particularly low-wage workers struggling to get off welfare.

Another major difference between Bernie’s plan and those of his GOP counterparts is the level of complexity. While Bernie’s tax plan includes four income brackets, a laundry list of additional fees and surcharges (listed below) and heavy penalties on investment; the GOP candidates opt for a simpler approach. Trump’s plan features four brackets at 0%, 10%, 20% and 25%, with a few additional charges to high income individuals and those in the financial sector. Cruz’ plan is even simpler: two tax brackets of 0% and 10%, with a flat business tax of 16%. If you’re wondering how much YOU will be paying in taxes under each respective plan, find your income in the chart below and check the plans yourself.

txncmp2

Now that actual numbers have been released by the campaigns, we can get a picture of how the national tax burden would be spread between the upper, middle and lower classes. Currently, the top 1% of wealth earners pay nearly half of all income taxes despite making only 17% of expanded cash income. In other words, the one percenters’ share of taxes is 2.7 times their share of income. While the wealthiest Americans pay nearly three times more than they pull in, the bottom 60% of Americans pay only 2% of all income taxes. According to the Tax Foundation, the top 1 percent of households collectively pay more in total taxes than all of the tax-paying households in the bottom 90 percent

Bernie’s plan, while taxing every working American, will increase the burden placed on high income earners substantially by implementing more taxes for the rich. The GOP plans would still keep the majority of tax burden on the wealthy, but would accomplish this by doing away with taxes on the lower class and providing massive tax cuts to the middle class.

Question #8. Will Bernie’s tax increases affect the middle and lower classes?

A. Yes. On top of the current tax rate for the middle and lower classes, which will remain unchanged by Bernie, Sanders has already authored legislation that would increase taxes on the working middle class by at least 9%. Sanders’ $319 billion proposal for providing paid family and medical leave would be financed by an increase in the federal Social Security and Medicare FICA payroll tax that all working Americans must pay. The payroll tax applies to annual incomes of up to $118,500 and proportionately hits lower income wage earners harder than higher income Americans.

In addition, Sanders has supported legislation to: repeal housing and wage exemptions for US citizens working abroad, tax capital gains at the regular income rate, increase the death tax, institute a new financial transaction tax and cap the home mortgage interest deduction at $300,000. He also voted “no” on increasing the child tax credit and opposed HR 3081, which provided tax relief for small business owners.

If history is any indicator, Bernie’s plan will likely have even larger tax increases hit the middle class. Sanders has often referred to Scandinavian models as examples of his policies. The Tax Foundation explains that Scandinavian countries raise their revenue largely from the middle class. Scandinavian income taxes are “flat,” in that they tax most people at high rates, not just high-income taxpayers.

For example, the top marginal tax rate of Denmark  is 60% and it applies to all income over 1.2 times the average income in Denmark. For American perspective, all income over $60,000 (1.2 times the average income of about $50,000 in the United States) would be taxed at 60% if we were to match the Scandinavian model. A model that has come under increased scrutiny and is currently undergoing significant changes. 

Question #9. How much money, outside of income taxes, would be raised in Bernie’s plan?

A. According to Bernie’s website, only $1.5 trillion, less than 5% of the projected costs come from non-income taxes. This places a high burden on taxes in order to raise money sufficient for financing Sanders’ bold plans as roughly 95% of the funding will come from income taxes.

Aside from income tax increases, the Sanders campaign has outlined plans to target offshore tax havens, establish a Wall Street speculation fee and end subsidies for energy companies. Also, Bernie plans on taxing capital gains and dividends the same as work, meaning that money that has previously been taxed will be taxed again. Such a policy dissociates from modern economic research findings which conclude that such rates tend to deflate natioanl GDP and hurt job growth:

“On balance, the evidence supports the economic case for a low rate of tax on capital gains. Recent actual experience suggests that a low rate of tax on capital gains increases capital investment and new business formation. Tax revenues have surged when the capital gains rate has been cut as trillions of dollars of locked-in capital are released to be put to more productive uses.” – Stephen Moore

Question #10. Will you pay your fair share?

The final question is a personal question regarding income inequality, and how far we are willing to go in order to end income inequality worldwide. It comes from author and historian Tom Woods, featured in the video below.

If you have answers for any of these questions or disagree with something here, comment below and tell me where I’m wrong.

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New LDS Church Policy Questions Answered

Following the LDS church’s update to policies regarding families of same sex marriage. I’ve had many friends ask me lots of questions. Until now, I wanted to keep my thoughts to myself, however, I felt impressed to share my thoughts from what I’ve gathered regarding the change. Below is a list of 6 questions I’ve received over the last few days. If you have anymore, please comment below and ask them. If you think I’m wrong about something, please comment. If you haven’t yet seen it, please watch this video which explains the policy.

Is it even legal?

Not only is the policy legal, it is almost purely legal. In fact, the change actually reinforces the legality of recent supreme court rulings same-sex unions. For those unfamiliar, the LDS church and proponents of same-sex marriage have an interesting legal history filled with ebbs and flows of a unique nature. Some of it has been received positively by the LGBT community. For example, when a Utah judge overturned the state’s ban on same-sex marriage, the LDS church helped author an anti-discrimination bill known as, the “Utah Compromise” which received national attention for how well it was received by the LGBT community. Not long after, the church offered a sizable donation to a local LGBT charity. However, many LGBT people were livid on the stance the church took during California’s via “Proposition 8.” And while this recent policy is merely a byproduct of the continued legal back and forth between the parties, it has reopened wounds for many members of the church and for others who feel affected by it. 

A major part of this policy is to provide legal protection for the church: By categorizing same-sex relationships as apostasy, the Church puts itself in a strong legal position should a same-sex couple sue in order to be married by a bishop or in the temple.”Similar precautions are being taken by many churches in the US. This situation may sound hyperbolic on it’s face, but such extreme cases are certainly not unfounded. In 2013, a group of wealthy men sued the Church of England to allow their gay sons to be married

In fact, the new marriage laws have opened Pandora’s box to a litany of lawsuits. One firm alone has experienced a 400% increase in legal assistance requests  following the new laws. Everyone from a polygamist family in Montana to LGBT activists pushing for other special accommodations have tried to leverage the new law. But the new marriage laws have also drawn criticism from the LGBT community, including a sharp “voice of warning” from the children of LGBT couples in Canada, where such laws were passed ten years ago.

What exactly is the change?

What this change mainly consist of is a re-categorization of how the church deals with families of same sex couples. Where before there was no legal policy on families of same-sex couples, the church has now reclassified such couples in a way that acknowledges their legal status. Homosexual activity has always been banned within the church and subject to discipline, including excommunication. This is not a change in how the church views homosexuality, it is simply a new legal categorization of it.

To use biblical terms, same-sex unions are no longer deemed “fornication,” which is sex outside of marriage, but are seen as “apostasy” which is open rebellion to church doctrine and policies. The attitude of the church has not changed. When the supreme court, despite public push back, changed the laws making same-sex marriage legal, the church had to respond in order to reflect the new legal environment. No supreme court change, no change in church policy.

Why punish the children?

The children are not punished. Contrary to some reports, children of same sex couples can still attend church activities and congregational meetings, visit with missionaries, receive priesthood blessings and even receive financial assistance from the church. So can their parents. The policy of the church when baptizing children has consistently been that no children of any circumstance can be baptized in the church without approval from their parents. I personally witnessed people sacrifice baptism for years because one or both of their parents did not allow it.

This policy respects the law and legal rights of same sex marriage families by indemnifying the children. It protects the children from dealing with the consequences of a family in contention.  A child is in a difficult position when their faith contradicts their own familial structure. This would be further exacerbated with the lifestyle of full church membership, which includes engagement, activity and visitation from other members. Lots of it. Mormons are generally nothing if not involved, engaged and uber outgoing. The church would rather wait until children can make their own legal decision to avoid potential family problems. Yes, in a way, this policy is almost strangely pro-gay family

How unique is this policy?

The church actually has similar policies for a number of groups, a few notable examples include: citizens of communist countries, Muslim converts, and children from polygamous families or who have parents that were excommunicated. Each of these groups has a certain reason that they are given special treatment within the church. In all cases, it has much more to do with protecting the individual than preserving church doctrine.

Should we be surprised?

No. The church has long held to this stance and unlike many faiths today, the LDS church is not known for changing key beliefs for the sake of assuaging the public. Many church policies throughout history have faced severe criticism. Despite the external pressure placed on the church over the years, church leadership has maintained its principles. Even when their views seem antiquated or even as bigotry by outsiders. 

I’m LDS and have trouble reconciling my feelings regarding this policy, what should I do?

The solution can be surprisingly simple. It’s the primary answers we all know:

  • Review James 1:5, “If any of you lack wisdom, let him ask of God…”
  • Bear in mind that the church’s doctrine and beliefs regarding homosexuality have not changed even after this policy.
  • Ask your self, “Who do you believe leads this church, a cabal of old men, or the King of Kings Himself?”
  • Be cognizant of the fact that there are many people trying to harm the church through deception. Don’t fall for it!

Lastly, if answers through prayer seem nebulous or untenable, I would encourage you to remember the words of Isaiah 55:8-9

For my thoughts are not your thoughts, neither are your ways my ways, declares the LordFor as the heavens are higher than the earth, so are my ways higher than your ways and my thoughts than your thoughts.”

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