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Now Let's Try Real Student Aid Reform

August 2, 2013 in Economics

By Neal McCluskey

Neal McCluskey

The U.S. Senate and House have passed a student loan bill President Obama will almost certainly sign. Bipartisanship lives! But don’t get too excited. Heck, don’t get excited at all: The bill will only deliver minor tweaks to a system that needs elimination, not a screw or two turned a little harder.

The bill, which ties interest rates on federal student loans to 10-year Treasury notes, certainly makes more sense than having Congress arbitrarily set a rate. Student loan rates moving with overall interest rates — not stuck well above or below them — makes sense if you are trying to balance the government’s need for revenue with a desire to furnish loans more cheaply than students would otherwise be able to get them. For supporters of such programs, getting this should have been simple, which is why — despite significant fighting — it ultimately got done.

Federal student aid is largely self-defeating when it comes to prices, and likely hurts low-income people more than anyone else.”

The big problem is such programs should not be supported. If the evidence shows us anything, it is that federal student aid is largely self-defeating when it comes to prices, and likely hurts low-income people more than anyone else.

The price problem is easy to understand. Give everyone an extra dollar to buy a hot dog, and what will wiener vendors do? Raise their prices! Essentially the same thing has been happening in higher education for decades.

According to data from the College Board, the inflation-adjusted cost of tuition, fees, room, and board at private four-year colleges rose from $16,745 in the 1982-83 school year, to $39,518 in 2012-13, an increase of $22,773. At four-year public institutions, it rose from $7,510 to $17,860, a $10,350 leap.

How about aid? In 1982-83 year, the average full-time equivalent student received $3,802 in federal grants and loans. By 2012 that amount had risen to $13,552, a $9,750 leap that tracks closely with increases in overall prices, especially when considering much greater enrollment in cheaper public institutions. And those figures exclude aid such as work-study and tax credits.

Of course these figures don’t prove that aid fuels rampant inflation, but they certainly track with the basic logic that schools will raise their prices if they can get people to pay them. And there is a growing body of empirical research showing that colleges do, in fact, capture aid.

The true cost of aid, however, goes beyond just skyrocketing prices. Aid …read more

Source: OP-EDS

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Washington Times Op-Ed: A coup is a coup is a coup ? in Egypt, too

August 2, 2013 in Politics & Elections

This week, the Senate voted to continue sending taxpayer dollars to Egypt, illegally. I offered an amendment that would take this $1.5 billion that is being sent abroad and reallocate it to nation-building here in America. The senators who voted against my amendment voted to violate the rule of law.

Aside from violating the law, they sent a clear message: Sending money overseas is more important than allocating these funds toward America’s infrastructure. Many American cities are now merely desolate skeletons of what they once were. Detroit, for example, lies in ruins, with 50,000 feral dogs roaming the city. Abandoned houses litter the landscape. It is a bleak and forlorn future that awaits Detroit. Creditors clamor for their share of $20 billion in debt. As a proud citizen, I sit and wonder how this has happened.

President Obama sends billions of dollars to Egypt in the form of advanced fighter jets and tanks. Meanwhile, cities like Detroit and Chicago crumble. In 2012, more people died in Chicago than in Afghanistan. Yet the president insists on building a $34 million fort for the Afghans. As secretary of state, Hillary Rodham Clinton insisted on building an $80 million consulate in Afghanistan that will never be used. Few on Capitol Hill oppose the billions of dollars we send overseas.
In the case of aiding Egypt, the law is clear. When a military coup overturns a democratically elected government, all military aid must end. So when the military coup occurred in Egypt, how did the president respond? How did Congress respond?

The president and his cohorts in Congress responded by shoveling good money after bad into the failed state of Egypt. The president and his cohorts in Congress are intent on building nations abroad. I believe it’s time we do some nation-building at home.

I propose we take the $1.5 billion we give to Egypt and spend it at home, building bridges and roads in America.
As our bridges collapse in states such as Washington, Minnesota and Kentucky, politicians in Washington continue to send taxpayer money to buy tanks and planes for foreign countries – countries such as Egypt, which recently allowed a mob to advance on our embassy and burn our flag. I say not one penny more to countries that burn the American flag.

In between cashing American checks, Egypt finds time to convict 16 Americans of trumped-up political crimes. Luckily for these Americans, they fled before Egypt could …read more

Source: RAND PAUL

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Time to Phase out Student Aid

August 2, 2013 in Economics

The U.S. Senate and House this past week passed a student loan bill that ties interest rates on federal student loans to 10-year Treasury notes. But Cato scholar Neal McCluskey argues that the bill only delivers minor tweaks to a system that needs elimination. “If the evidence shows us anything,” says McCluskey, “it is that federal student aid is largely self-defeating when it comes to prices, and likely hurts low-income people more than anyone else.”

…read more

Source: CATO HEADLINES

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The Right's Bait and Switch on Same-Sex Marriage

August 2, 2013 in Economics

By David Lampo

David Lampo

The opponents of same-sex marriage have thrown out many arguments against it, most of them without a rational basis or designed simply to obscure their real reason for opposition: They simply don’t think homosexuals deserve the same legal rights that they do. 

These arguments are mostly falling on deaf ears, apparently, since public opinion continues to change in favor of marriage equality, but that doesn’t stop opponents from using half truths, misrepresentations, or even outright lies to advance their agenda.

One of their favorite arguments of late is that legalizing same-sex marriage will somehow lead to restrictions on religious liberty, even “criminalization” of religious opposition to homosexuality, and many conservative religious leaders and pundits are now making this argument the centerpiece of their campaign against gay marriage. Politicians that pander to them are speaking out as well, such as Sen. Ted Cruz, the Tea Party Republican from Texas making waves on Capitol Hill for his strident defense of conservative social issues.

He recently told the Christian Broadcasting Network’s David Brody, for example, that “other nations that have gone down the road towards gay marriage” are punishing “Christian pastors who decline to perform gay marriages” and who “speak out and preach biblical truths on marriage,” warning that could happen here. A scary thought, to be sure, certainly one that seems to merit the concern of every freedom-loving conservative and libertarian in this country.

Except that it’s not true. 

Cruz and other opponents of same-sex marriage point to the 2003 case of a Swedish Pentecostal minister named Aake Green, who was taken to court for comparing homosexuality to cancer, as the perfect example of the slippery slope gay marriage will put us on. His 2004 conviction, however, had nothing to do with gay marriage, which didn’t even exist at the time. Aake was charged under Sweden’s hate crimes statute. Unlike America, many European countries lack the free speech guarantees we take for granted. Even in Sweden, however, his conviction was ultimately overturned. Apparently, facts rarely get in the way of a politician or a preacher on a mission.

The same is true here in the United States. Opponents of same sex marriage cannot point to a single case where a church or religious institution in America has been forced to conduct or sanction a same sex wedding. In fact, those states that have adopted same-sex marriage have instituted strict protections for the right of churches to refuse …read more

Source: OP-EDS