American Socialism II – Socialized Tuition

The Democratic national party has made it something of a prerogative over the past several elections to platform on more affordable college and university tuition. They tell us that tuition rates have gone up disproportionate to inflation in the past twenty years, that tuition today is too expensive for the aspiring young and their concerned families of the lower class to afford, and that these costs have risen largely independently of economic pressures. The less-nuanced approach to handling these issues comes from Bernie Sanders, self-styled socialist and walking harbinger of the Left’s new face. His solution: subsidize the entire field and, with a combination of federal and state funding, provide free tuition to students of all public two- and four-year institutions.

There are, however, a variety of problems with the notion of what might as well be considered a single-payer higher education system. These problems are not restricted to logistics, such as how to pay for it or even how to implement it, nor are they limited in scope to the implications of how the a majority of the education sector would function under government subsidization and oversight; the problems are more fundamental, reaching into to the very collectivist/individualist divide between the modern Left and Right in their approach to governance and responsibility.

This plan is, at best, doomed to failure; at worst, it’s an evisceration of the classical liberal’s ideals.

AFFORDABILITY

According to the National Center for Education Statistics, state-funded colleges and universities pulled in about $65 billion over the 2011-2012 year, and according to Sanders’ own site, that number today is a little closer to about $70 billion. In an era where the national debt has skyrocketed over the $18 trillion dollar mark, a measly few tens of billions by comparison seems like a drop in the bucket. Unfortunately, although the national debt of the country is a number a bit more familiar to most Americans, it’s easily one of the worst possible standards against which to measure any form of magnitude. It’s simply too high to adequately comprehend, not unlike the $65-$70 billion that college tuition is supposed to cost.

Let’s put this in perspective. Federal income tax data should suffice.

In 2012, the bottom 50% of taxpayers paid a total of $33 billion dollars to the federal government. This includes everyone who held a legal job through the 2012 fiscal year with a job that paid less than around $36 thousand a year. The combined average of their income tax rate was around 3%, and it covers roughly 68 million individuals—assuming each singular tax return accounts for one person.

The next easily-measurable bracket upwards on this scale accounts for the lowest 75% of the population who submitted returns—and this number is a bit more favorable. This brings us to the least-rich 102 million tax payers in the US, and they pay about $161 billion in income taxes. Just so we know exactly who we’re talking about here, this means everyone who held down a job that racked in less than about $73 thousand dollars over the course of 2012.

This number gives us that magic $65 billion or so we need to cover the university tuition costs over 2012, and it leaves plenty to spare. No big deal, right? That’s only 102 million taxpayers funding the way of roughly 13 million college and university students a year—or about 4% of the entire US population, or the equivalent of 12.7% of the body funding them, or perhaps most accurately, the equivalent of 9.5% of the entire tax-paying body of workers who would collectively finance this and other programs allocated in the national budget.

So we’re looking at a little less than one in ten people benefiting from a program that every worker is forced to contribute to—many of whom already has it siphoned out of their paycheck before they even see it. And if we consider that only about 20% of these students worked full-time while in school—in all likelihood in positions that wouldn’t afford them income brackets greater than the $36k/year cut-off rate that differentiates the top 50% of taxpayers from the bottom—then we’re looking at a grossly disproportionate rate of return for the community of investors. Even being generous and including the part-timers, we’re looking at 71.6% of the college & university student community in the workforce and paying taxes; that means about 3.7 million students would basically be given a free ride.

Maybe all of this is irrelevant. After all, Sanders hasn’t said anything about using income tax to pay for all of this, and even if he had, the tax code would obviously need some drastic restructuring to handle an additional $65-$70 billion load on its current money-hemorrhaging status; the US government already operates with an annual deficit of more than half a trillion dollars (that’s $583 billion in the red for the 2015 fiscal year). It’s worth noting that the deficit is the amount of money in the budget that isn’t already covered by what’s currently being taxed out of every working citizen’s pocket. If the total amount the IRS collected in 2012 came to about $1.2 trillion, the federal budget was at least another half-a-trillion dollars more than that.

I’ve heard suggestions of another payroll tax similar to the social security and unemployment taxes, but that just decreases the amount of money going into the worker’s pocket and establishes yet another empty piggy bank filled with IOUs for government pillaging just like the existing bankrupted social security program—the entire idea strikes me as self-defeating. There’s also the suggestion of a tax imposed on stock trades—either a reform of the capital gains tax that already exists, or a more pervasive tax on every trade. Capital gains tax already taxes each trade, though cumulatively and usually only once a year (although the tax itself is already an example of double-taxation). This simply adds to the dues the government wants to collect from investors.

IMPLICATIONS

Clearly, piling onto the national deficit tens of billions of dollars more than it can already subsume isn’t going to work out—especially not for a candidate that has already promised overhauls in national infrastructure, extension and expansion of benefits to workers, growth of the public sector, and the synching of Obamacare into a larger single-payer healthcare system. The money simply doesn’t exist within the government’s current budget, much less the expansion these proposals would require.

Ostensibly, there remain two options: shrink, eliminate, or optimize existing programs to cut costs and drive down government spending, or levy more taxes against rich people and corporations (as if corporations are somehow independent of the people they serve, cover, or are otherwise comprised of, so all it does is further burden the worker anyway). The former option is something that a socialist isn’t usually capable of mentally conceiving, and the latter is little more than another excuse to point the government’s guns at its own people.

But that isn’t the point, Sanders might argue. The point is that everyone should be given the opportunity to go to school, right?

This is the problem; there’s the mistaken assumption that each person has a right to continuing education, and implicitly, that every person can, should, and on some level, must continue to pursue academic rigor. From this assumption comes the notion that government should preserve this right by allocating the resources necessary to ensure that this opportunity is protected. But an individual’s right is an entitlement granted to them by very nature of their being born—the right to speak your mind, the right to assemble, and the right to pursue happiness are all examples. But these aren’t entitlements to commodities, like wealth or property. A person does not have an innate right to a house any more than he has a right to a diamond necklace or a private island or a yacht. He has a right to pursue the acquisition of these things, the right to work for them and gain them by the sweat of his brow. He has the right to invest in them and claim them as property after he’s traded for them or otherwise entered agreements with parties to obtain them. But he doesn’t have a right to their specific ownership at birth. They are wealth created by someone’s labor, and the redistribution of wealth from those who created it to those who do not offer compensation is called theft.

Education is a commodity; it requires teachers, teaching space, materials, and realistically, an administrative structure to support its apparatus. People have to be compensated for their services and goods have to be paid for. The fruits of education should come to those who work for it each and individually in turn.

And the implication behind the rhetoric goes ever deeper; a subsidized system of education, even if it isn’t one fed students by governmental mandate (as the public school system is), still creates a system that will only devalue the very thing it’s supposed to provide. Our society already tells us that free is better; those that don’t take advantage of uncharged public sector university would certainly be throwing away an opportunity to improve their quality of life, at least as we understand it now.

But taking into account that there will always be a much larger need for skilled laborers, then this social necessity of higher education becomes less intuitive. Even if the logistics were worked out, the result would be a world where either the majority of the populace simply doesn’t take advantage of subsidized education, or a world in which it’s expected for people to stay in school up into their mid-twenties simply to get a degree that enables them to start an low-end administrative position as a secretary at lower wages and with less growth opportunities than they have now. The divide between the public and private schools would either shrink as the private schools went out of business, or it would disproportionately grow as employers figured out that the public sector degrees were becoming increasingly worthless in the job market. Because a funny thing happens when something is made available for anyone who shows up: the standards and quality of the service drops.

THE MORAL QUESTION

Now we get to the morality that I touched on earlier: is it good to force the collective of society to pay for the gains of what are effectively the elite few? This in turn brings us to an even broader question: what should higher education be used for: the endowment of skill sets to future employees or passing-down of knowledge and methodology for the Citizenry?

Traditionally, higher education has acted as the threshold upon which the burgeoning mind is prepared for the adulthood of civilized society. It was the mark of aristocracy, the mark of wealth; it differentiated the leaders—in all fields: political, scientific, social, et al—from the ranks who followed them. While being born into wealth and power were the predominant features of aristocracy, their higher level of education became the defining characteristic of the class simply because without it, the family would easily lose their status within a generation or two. The fostering of critical thinking and scientism, the cultivation of the aesthetic, and the passing-down of cultural heritage, knowledge, and artistic canon functioned to further each generation by creating a foundation on which the culture of their entire society was reinforced. The blood-class of aristocracy allowed the great artists to thrive insomuch as they could be their patrons. Art itself was and had for generations been a symbol of that status.

Education thus existed as both a means of continuing the liberal arts tradition through the years while simultaneously teaching the next generation of leaders the skills they’d need for running their lands, kingdoms, and businesses. It maintained the cultural baseline that underpinned the social fabric.

This is not, for the most part, how we conceive of education today. As the aristocracy disintegrated around the crumbling framework of monarchical rule, and as the nouveau riche rose to prominence due to a more open market both in the old world as well as the new, the traditionalist values of art and common culture lost ground against the more immediate concerns of maintaining capital in a less stable economy and the accumulation of wealth amid growing fears of governmental interventionism—particularly during the 1920s. As education became more affordable, as the more rigid class structure of the old world fell apart and the markets freed up, the availability of instruction became easier to get for the growing middle class. The conflation of first the new-rich merchant class of the eighteenth and nineteenth centuries grew into the conflation of a rising upper-middle class of almost-rich with the lower spectrum of the upper class. The rise of publically-funded universities and the shift in the US job market toward a more service-oriented economy complicated the situation even more.

But this is somewhat beside the point. Which direction should education take our students? With highly fractured degree programs and a deep divide between the STEM fields and the humanities on a majority of campuses, the answer today isn’t so obvious.

I think we need to let go of the notion that everyone deserves an higher education merely by nature of having been born. Higher education, the pursuit of it and its value, is entwined with the concepts of skill and labor. Anyone is capable of labor, and anyone who shapes their will toward the pursuit of skill naturally labors for it. But the development of skill, critical thinking, and the advancement of knowledge are not things that can be legislated into being or mandated into existence. They must be pursued, honed, maintained, and crafted. Those that deserve such things are those that endeavor to pursue them by the sweat and blood of their toil.

Doubly so when something as expensive as education is considered. It’s always a matter of give and take. The student that pours himself into his studies to learn more is only doing himself the favor—not any real favor to the professors and coaches who instruct him, aside from politely neglecting to waste their time. The student must give to these people, he must pay off the debt that he has accrued as a result of their instruction and guidance. For some, gratitude is enough. Gratitude, however, is a woefully devalued commodity in today’s culture and something growing scarcer by the year. It means nothing when it is between strangers and unbacked with something of agreeable value.

CLOSING

The short of it is simple: a man deserves the opportunity to work for what he desires.  Those that prioritize higher education should be allowed to pursue it.  Student loan reform that enables graduates to realistically pay back to the university what they have received from it, as well as a shift in conceiving of who should probably attend college are better courses of action.  They preserve the liberties of the students and the community by maintaining a decentralized, individual priority driven form of bottom-up planning rather than the socialist and impractical attempt of a top-down mandate, while also avoiding the collectivist pitfalls of excessive bureaucratic mismanagement and over-taxation.  At the same time, rethinking the nature of higher education and encouraging more students to pursue trade-related fields will streamline the existing apparatus, discouraging students from pursuing useless degrees of academic rigor that ultimately only send them into debt and have no application outside a classroom.

More government is not the answer.

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American Socialism – A Game

Let’s play a game.

Take a Monopoly board, or something like it. House rules and all that. This works best, by the way, with upwards of four people. We’ll repurpose Monopoly almost in its entirety for this little exercise. Also, you might want to get yourself more dice.

So, Monopoly involves advancing spaces around a square board, purchasing property from a single bank, paying tax to that bank periodically, and charging other players money when they’re unlucky enough to fall on property you own. With more money, you can throw down houses and later hotels on the properties you own a streak of and, in return, charge exorbitantly more every time a player lands there.

In our game, we’ll do something similar. Let’s instead have property—and now loans, too—issued from a single bank, like in the original, but this time we’ll have money administered, taxed, and collected by the government. The government will also pay for charges to certain properties, but more on that later. Property rent will be handled differently, as will the paydays received from passing your starting point, the nature of the money you use, and, ultimately, even the object of the game. Important modifiers must also be introduced.

The first thing to be understood about this game is that it is largely a navigation of taxation. You have a lot of perks—like some free stuff that the modifiers give to every player, mostly across the board—but it comes at the expense of such a heavily-regulated structure of payment, taxation, debt, and interest that it turns into a confusing headache pretty fast. (You might be wondering why you’d want to play this game. Well, bear with me.)

Taxation is the overall blood of this game’s machine. Where Monopoly was ruled largely by the chance of the dice, our game has to be a bit more rigid; the easiest way to do this is to run everything—every debt paid, every service rendered—through a system of taxation and dispensation. Certainly not to the point of the State OWNING the means of distribution and production—I mean, that’d be a pretty boring game!—but a middle ground should be reached. Taxation works out well and forms a coherent enough system (if not altogether logical sometimes) that everything balances out in the end.

So, the good parts first: where does the tax go? What does this government do with it?   Here’s where the modifiers come in. Every player gets to roll a few dice at the beginning of the game to establish their Education, Health, and Employment statuses. In an ideal world, after all, everyone has a right to free access to education and healthcare, a right to employment, and let’s not forget that some system of social welfare should be available to anyone down on their luck, right? Sure!

For the game’s purposes, your Education modifier implies that every player has taken advantage of the free public university options available to all potential real estate investors, which means you have a one in six chance of actually having the benefit of a university that dispenses quality education affords to its clients. In other words, at the beginning of the game, you’d roll a die and if it landed on, say, one, then presto! that free university education actually helped you some tangible way—you’ll rack in an extra 10% on every paychecks from passing Go. Miss that one and, well, sucks for you that your now-ubiquitous university credits didn’t translate into anything that helped you get a better job.

The Healthcare modifier is only going to be useful for some of your chance cards. After all, disaster could strike at any time—pretty much completely by chance. But remember, when that life-threatening illness hits you or you end up in a coma after a car accident, it’ll be great when you aren’t the one left holding the bills for all that treatment! A 1:3 chance roll of the die will decide whether you actually receive treatment, though. If you don’t, then there are penalties associated with your play after the accident(s).  But don’t worry, the waiting list can only be so long, so eventually they’ll get around to you.

Lastly, your Employment modifier determines the size of your paycheck every time you make a revolution around the board—determined, of course, by the great and powerful six-sided die and a simple multiplication set afterward.

That’s most of the free stuff. What about the taxes themselves?

Well, that’s basically the game.

Play commences not unlike traditional Monopoly. Roll some dice, move some squares, land on properties, decide whether or not to invest, repeat. There are a few key differences, however. The properties you buy accrue rent income regardless of whether another player lands on them or not. They are essentially money trees that grow more the more you invest. Sounds great (or broken, depending on your love of the original game)—except that the government demands its share of the profits. Sales tax is applied to every transaction of property—whether from bank to individual or between individuals, a certain amount (around 5%) of the property’s value goes to the government immediately. Also, if you’re purchasing property through a bank (and not from another normal player), closing costs are due to the bank as well (depends on the property, but usually around 10%). Then, property tax (about 10% of the value) is due once every revolution, all at once, for every property a player owns. Remember, should you invest more heavily in your property, its value goes up, as does its tax.

Further taxes are placed upon your ‘paycheck’—that bit of money guaranteed to you ever revolution? Yeah, that’s taxed in spite of your Employment and Education modifiers. This is your income tax, and while it’s due every time your paycheck comes in (just like property tax), it’s applied to your overall income that revolution. Cue the tax brackets! There’d be an accompanying chart to help you navigate that—it’s a little muddy, but don’t worry, if you’re making less than an exorbitant amount of money, then you shouldn’t have to worry about paying anything more than about 50% of your earnings to the State.

This covers the basic properties. Utilities and railroads are a bit different. The players that own these facilities get money directly from the government due to how heavily subsidized these industries are, in addition to these facilities generating a small income of their own.

So you have sales taxes for the properties you buy, closing costs, property tax, and a general income tax. All of this sounds like you should still be able to make a ton of money and basically win the game with deals and driving your competition into bankruptcy, right? No! That isn’t how it works at all, you filthy one-percenter! Listen: the government happens to have racked up tremendous debt in the past several years. The precise number of that debt depends a lot on the number of players, but for the sake of argument, we’ll just throw a really big number out there… say a few billion (far more reasonable than the actual debt of the US Government, certainly, but astronomical for a game whose most expensive property probably won’t be worth more than a grand even after a hotel sits on it).

Now you could say, “why should I, a player-entrepreneur and real-estate mogul, care about the national debt? That’s the government’s problem!” And you’re right, it is the State’s problem, but remember that any problem of the State’s is a problem of yours, citizen. All that debt is racked up due to a massive government deficit doled out to welfare recipients and the unemployed, but also because the lowest income tax bracket (one that you have no way of making it into once you purchase your first property) isn’t, in fact, a tax bracket at all but rather a stipend bracket in which money is given away freely to these working folks—on the government dime, no less—with hope that they stay working right where they are… otherwise they’d end up unemployed, and receiving other money—on the government dime—for staying at home and sending out a couple applications once a week… or worse, on welfare, receiving money—on the government dime—for… staying home…? No, that can’t be right.

Anyway, such trifling details don’t matter.

Yes, mister entrepreneur: you are the top ten percent! If you play the game well enough, you’ll even make it into the top one percent! And the more money you make, the more you’ll be taxed—even proportional to your income—until you’ll be dishing out close to ninety percent of your gross income in order for the government to write checks to the people less fortunate than you are—many of whom are probably even paying you rent on some of the properties you own.

Give or take, every time the first player makes a complete revolution around the board, the federal deficit goes up—because discretionary spending on handouts and programs increases with each new child born into poverty! That cranks up the debt even more! Again, why does that matter to you?

Because the State has the power to print more money. That means inflation! Every, say, ten turns or so, the government revs up those presses to pour some more Monopoly money onto the board—well, mostly just into the bank who then distributes it to the players through adjusted prices and rates. Naturally, your tax brackets also adjust over time, and—if we wanted to be a bit more brutal about things—the bank would maintain an firmly gripped fiat over interest rates on the properties you’ve bought with a loan but don’t necessarily have the money to pay off completely yet. If we’re going for more realistic rules, then the properties themselves would be worth significantly more than your typical Monopoly board prints on its squares, or, alternatively, you’d make significantly less off of rent payments since in our scenario they accrue regularly instead of merely by chance.

The long and short of it: the more money you make, the more of that gets handed over to the government to support the invisible populous who could be paying your rent, the less valuable your money gets, and the less likely you’ll ever be able to make even a dent in the overhanging debt of the game. Does this sound like a game that can be won?

Now, I fully admit that this exercise contorts the theory behind the forms of American Socialism pushed by the harder Left segments of our politico establishment, but that’s because I didn’t want to trouble with the notion that other nation-states exist which would require the funding of a military (more debt), or that a more centrally-planned State would establish precedent for the government to effectively do whatever it likes at the expense of its own citizenry purely on the basis that it is stronger and more organized than they are. And I didn’t really want to get into the minutiae of daily living in an environment utterly controlled by a mismanaged, broke, bureaucratically incompetent government that sees fit to manage healthcare the same way it’s managed its public school system, but I think you get the idea.  The game of wealth redistribution is one that chases its tail.

But hey, this is just a game—and not even a real one, at that!  Trying to market this would be a nightmare, unless I downplayed its flaws (like how it can’t be won) and played up how much free stuff the game gives to you simply by playing it.  I might make a few bucks in the short term, but everyone that played it would realize pretty soon that it was a load of bunk, and they’d probably discourage their friends from getting themselves a copy.  Not to mention how much of a headache it’d be to play this at parties.  I probably wouldn’t even make back the investment of the material and marketing costs.

Maybe it would be better if we just assumed that there’s a reason this game doesn’t exist.