Or at least most people believe it's not so easy to follow. It need not be difficult, so let's apply the KISS method today. Easy economics is based on simple common sense. Let's use it.
Accordingly, my goal herein is to refute the "economics is tough" mindset and to demonstrate that common sense and intuition are sufficient to helping each of us get the most out of our financial activities. We'll replace the "economics is tough" view with the "easy economics" common sense based way of looking at things.
Besides that, most activities do have a financial aspect to them. So let's discuss a few simple concepts applicable to easy economics today.
Today's easy economics story is about the sorry state of education and its cost in America today. From kindergarten through college. Knowledge acquired for time spent and the costs associated therewith, to students, society and taxpayers as a whole.
Lots of noise these days about student loans, interest rates on them and even whether to discharge student loan debts in bankruptcy. Hardly any noise about why student loans are so necessary and what young people get in return.
Oh, I know that a college education purportedly creates substantially more earnings power over a lifetime. But that's not all I know.
I also know that today approximately 50% of recent college graduates are either unemployed or underemployed, meaning that many of these fortunate young people that are employed could have gotten their jobs without receiving a college degree and without first incurring a huge amount of student loan obligations.
And I also know that 43% of those people entering a four year college in 2002 hadn't received their degree 6 years later. Even worse, the percentage number for non-graduating community college attendees is a whopping 65%.
Accordingly, getting into college is simple; it's the graduating therefrom that's often elusive. But the student debt doesn't go away. And for lots of those who do eventually graduate, many of the majors don't pay enough to justify the extent of the student loans undertaken.
I also know that the vast majority of loans are government granted or subsidized and that a debate today centers around whether interest rates on those loans should be raised or kept at 3.4%. And that 1 out of 4 student loans are delinquent and that the taxpayer will be stuck with the bill if the debtor can't repay the loan.
What's not being discussed is why college costs are so high and why so few students graduate and why those that do graduate can't find suitable employment.
Competition is a word not often used when discussing the entire sorry student loan situation and, despite the spiraling costs, the failure to educate so many of our young people today. Neither is globablization. And neither is monopoly. Nor government schools. Nor competition. Nor choice. But they very much need to become part of the national conversation. The truth is the truth.
In my view, our government schools are bad, starting with elementary education and going right through college. And there's a simple reason. A government monopoly prevents price and quality competition and a vibrant local marketplace. Teachers generally belong to union monopolies, politicians grant government funds to schools (funds which we don't have), pension obligations are unfunded and the list goes on.
But since it's our kids we're talking about, and our union represented "public servant" teachers as well, all we hear from the sickening politicians is that we need more taxpayer money to spend on educating our youngsters. But the problem is that they're not receiving a good education that will enable our future American workforce to compete against all comers through the world. Globally we're falling behind and paying more in the process.
And we're burdening the next generation with future debts as well as a poor education. Wake up to easy economics, America!
What the pols don't say is that the money that we don't have but are spending anyway will be ill spent by the government monopolists, as it has been for a long time now. And that as a nation we're falling further behind other nations.
So there we have it. Poor schools, expensive schools, monopolistic practices with respect to union represented teachers, unfunded teacher benefits that the taxpayers are obligated to pay and lots of student debt that will ultimately land on the taxpayers' plate as well.
Did you know that government took over student loans at the same time it passed ObamaCare in 2010? What a year!
We need to start paying attention and start insisting that the politicians at all levels-- local, state and federal-- know that We the People are paying close attention to this ongoing national disgrace.
Easy economics says that marketplace competition is good and that protected government monopolies are bad. Government schools are a serious threat to our national secutiry and ourt citizens' prosperity.
Summing Up
The really big problem isn't the interest rates paid on student loans, the amount of student debt or anything similar thereto.
The really big problem is the education our kids aren't getting and the shaft our taxpayers are getting.
Meanwhile, the politicians fiddle and talk nonsense.
That's not hard to understand. It's easy economics.
Competition, globalization, markets, local control, price discipline, freedom of choice and personal responsibility.
Thanks. Bob.
