Germany has long shown far greater foresight than the United States in the investment into science, infrastructure, and alternative energy — investments that are now giving the country huge returns as a leading economic system. With a decision of Lower Saxony, the German have now shown precisely how serious they are about keeping the country as one of the most educated in the world: they have eliminated all college and university tuition. The Germans view education as not just a right, but an essential component for continued growth.
There are critics to educational subsidies who raise some good-faith issues of how such payments can eliminate pressure to make efficient choices and actually drive up costs. I actually see value to students paying some tuition. However, with tuition sky rocking in the United States and falling enrollment numbers, the United States is heading to a reckoning in the future for our lack of investment in our workforce. While we have spent trillions of dollars on the wars in Iraq and Afghanistan (and just renewed our commitment to the later to keep forces in the country), we have continued to cut environmental, scientific, educational, and infrastructure investments. The inevitable result is that we will continue to drop in our competitiveness in the world market and the future economy. Every other country is investing heavily in education while the United States continues to be distracted by shiny objects with more immediate political benefits for politicians.
What is striking is that it is not just third world countries that are investing heavily education, but economic leaders like Germany.
Notably, tuition was only introduced in Germany in 2006 after the German Constitutional Court ruled that limited fees do not violate the country’s commitment to universal education. However, the tuition rates proved unpopular and the country is now tuition free. Of course, there is no such thing as free tuition. The taxpayers are footing the bill. Moreover, such government subsidies can have a negative impact on not just the choices of students (who feel less pressure to make efficient choices) but on schools which are dependent on the government.
Nevertheless, the contrast could not be greater with the United States in terms of the commitment to education as not just a right (as it is in Germany) but as a real national security priority.
The article below has an interesting discussion of how England rejected the free tuition approach but has lost more money due to the higher student default rate on tuition. Yet, the English students face a maximum debt load of $14,550 per year where U.S. tuition rates and debt are soaring. Student loan debt in our country now stands at $1.2 trillion.
Of course, that is less than a third of the costs for the wars, but no one is making such comparisons.
http://thinkprogress.org/education/2014/10/01/3574551/germany-free-college-tuition/
We had a guy here who used to brag that he had started MANY businesses. That could be a good indicator, but often means they all failed. Just sayn’. Anyone who complains about unfairness and no American Dream is not successful in business. I know DBQ and I are. I can deduce w/ others. Just sayn’.
Nick – studies have shown that entrepreneurs are great at starting businesses, but not good at keeping them going. At a certain point they are better off bringing in an MBA to run it.
Annie
Darren, the term was not profane, nor was I calling anyone this term. It was a request to put it on a list.
Annie
I think we are in for a rough ten days, I’ll be back when JT is.
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DBQ:”Never actually been in business have you? I know one business that just ceases to operate once he has reached a level of taxation based on his income. He just stops working and goes fishing”
I am in business, and keep getting into business. Thanks for the obvious “the market will bear…”. Nice use of one specific case to make your general point.
Your extended answer does in now way undermine my point:
People will remain in business as long as it is profitable. That is the whole point of being in business, profit.
That they may not want to bother is something else, sometimes profit is just not enough and one wants, as in the case you mention, to go fishing or just travel, or the pain of getting out of bed is just too much compared to the financial rewards of work, or too much profit may trigger too much pain.
Why is the government checking for price gouging? To prevent the market from being too much to bear. The costs are always passed along to the consumer, always, unless there is enough competition to benefit the consumer. Hence the stringent regulations seeking to prevent businesses from artificially creating a demand or colluding to raise their prices.
bettykath,
Yes, and that path will not be departed from.
The only thing left is what the deniers on this thread present: the trance.
Wow, so many people ignorant of what’s been happening to the wealth of this country. The buying power of bottom 90% has not only not held its own, it’s dropped precipitously while that of the top 10% has gone up and off the chart. The middle class is disappearing into the poor.
Correction ….I don’t believe there is a sunset on the increase in the Unified Credit. I haven’t been following it as closely as I did when I was working.
“Anyone running a small business knows that the actual rate paid is very low after all the deductions one can take”
Well…..duh.
“No business would cease operating because of the cost of doing business. the costs are always passed along to the consumer anyway. As long as the profits are there, the business will keep operating.”
Never actually been in business have you? I know one business that just ceases to operate once he has reached a level of taxation based on his income. He just stops working and goes fishing. Sometimes that is in June….sometimes it is a bit later. He lays off his employees….mostly family members who are working part time for him and they go fishing too.
As long as the profit level is sustainable to inflation, rising costs of goods, costs of employees, insurance and all other overhead costs and there is enough profit to make it worth your time. If not… and the business owner finds that he/she is working for pennies and actually for less than minimum wages with all the headache and responsibility…..not to mention being beat up upon by people who have zero idea of business or economics….he she will just throw in the towel and call it quits.
Passing the costs on the the consumer. I guess you’ve also never hear the term “what the market will bear”. There reaches a point where the consumer will just decline to buy the product when the price gets too high.. IT is called elasticity of demand.
http://en.wikipedia.org/wiki/Elasticity_%28economics%29Enjoy those $8.00 big macs.
Nick Spinelli
The European economy is tanking, and starting to effect our meager recovery here.
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Bunk.
Some history:
(The United States of Europe – 2). Since then China took over first place for exports, putting Germany in second place, the U.S. in third place.
@ docmadison.
The Unified Credit exemption is very high right now. For now. Which it is true will eliminate the estate tax for almost everyone except the very wealthy…..for now. : But that is only through 2016 and it could change to any amount after that. It has been as low as 500K in my financial planning career and MANY MANY small business owners and especially farmers and ranchers were caught in a jam. This can be reversed at the whim of the government.
http://www.irs.gov/pub/irs-soi/ninetyestate.pdf This is also a helpful link for those who are interested in history.
Dust Bunny Queen
“Everyone should pay a fair tax, but they do not.”
@ Dredd
…
The same should be true for long term welfare benefits. You should count that as income and pay “some” taxes on that.
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Well said.
I just focused on this because the largest per capita wellfare amount goes to the wealthy who do not need it.
And foreign nations.
Poor Americans get a pittance by comparison (MOMCOM – A Mean Welfare Queen).
Those of us on SS pay income tax on it.
Great point, Doc. From within the beast, to denounce the beast.
DBQ
Anyone running a small business knows that the actual rate paid is very low after all the deductions one can take. It is a great deal lower for corporations, who yet use up a great deal more of our resources,social, physical and environmental.
Corporations will seek out tax shelters no matter how low the rate they pay. They would also seek out lax rules and regulations to further increase their bottom end.
No business would cease operating because of the cost of doing business. the costs are always passed along to the consumer anyway. As long as the profits are there, the business will keep operating.
The treaties that enable our corporations to go elsewhere and operate anywhere are supported by our might and our communal and military investments. If Apple’s products are protected internationally, it is not because of how powerful Apple is, it is because our government and our national concerns dictate that we protect those products with all of our might.
Locally, between the tax breaks that Apple gets to establish itself in one specific locality, the support it gets from the local and extended community, its ability to have patents protected, to have resources that protect its brand and ability to operate, and the logistics reseau it takes advantage of that enables its shipment of goods and products, including the building and maintaining of the electrical grid, the internet network, the emptying the streets after a snowstorm…
What do we get in exchange? Apple buys another corporation in Ireland in order to reduce its already low tax liability in the US.
po – Apple continues to thrive because it found a price point much higher than its costs that it can sell its products at. The product itself is not a good as Samsung but they are selling “Apple” the brand and people are wiling to pay more for it. There is a sucker born every minute.
They are protected to a certain limit in China because they hire a lot of people and bring in a lot of money to the country. But that may not be enough. They have been fined by the Chinese govt on more than one occasion for workplace violations.
All Mensa scholars understand regressive taxes….or are capable of looking it up.
docmadison – Mensa is a social group, not scholars. People in Mensa have a variety of expertise. Some are good at math, some science, some history, some literature, some economics, etc. Not everyone knows everything. Since you made the statement, please explain it.
Bookmarked
The estate tax exempts assets of $5.25 million or $10.5 million for a couple. Hardly confiscatory.
Some will find the following helpful.
http://www.cbpp.org/cms/?fa=view&id=2655
I think we are in for a rough ten days, I’ll be back when JT is.
Darren, the term was not profane, nor was I calling anyone this term. It was a request to put it on a list.
docmadison – explain how a flat tax is regressive.
Darren, Just a suggestion, I would read the entire thread starting @ about 11am. Thanks.
Mango, good question.
Economics 101
A flat tax is regressive.
Paul, It’s always 5pm somewhere.
Nick – it is always 8 am somewhere, too. 😉