Do you want a free college education? Free. Who doesn’t like free? Even if you weren’t particularly interested in getting a higher education, you might decide to try it out if it was free, right?
This is exactly the policy that the democrat presidential candidate, Bernie Sanders, wants to implement if he is elected president this November. And to his credit, this campaign promise is proving to be very popular with millennials.
But is this really anything more than a campaign promise? Bernie Sanders is probably very sincere in his desire to give the gift of free college for all, after all, he is a self-proclaimed socialist, but is it actually a viable policy? No. Of course it isn’t, and here’s why:
The Numbers Don’t Add Up
Bernie Sanders’ economic plan spends $18 trillion and raises taxes by $10 trillion. That leaves an $8 trillion dollar gap, spread over 10 years, increasing deficit and debt at a time when they are already going up. Sanders says he wants to “tax speculation on Wall Street” to pay for his gift of free college for all. But what happens when you raise taxes on investments in things like stocks, mutual funds and bonds? Investors will decide to put their money elsewhere… in investments that will not be subject to such high taxes. When the size of the investment speculation pot decreases, there will be less to tax, which means less money available for the free college fund.
The Tax Foundation estimates that under Sanders’ tax plan, within 10 years, the economy would be 10% smaller than it is today. Again, smaller economy, less tax revenue, which means less money being collected by the government.
USNEWS.com estimates that it could cost $70 billion per year for “free” college. So if we are facing a shrinking economy, where will the money come from? It doesn’t just appear out of thin air—even though we have been conditioned to think that the fed can just print more money and insert quantitative easing to fix the problem—it doesn’t actually work that way. Remember the $18 trillion of debt we currently have? Sanders’ plan increases that debt even more.
Economist Brian Brenberg asserts that this would be the biggest increase in taxes since World War II. Long term effects would be terrible on our economy. However, millennials and many voters are only looking at the short term: how to get free healthcare, how to get free college. It sounds inspirational, but the math doesn’t add up. Brenberg also points out that countries that currently offer free college also have a value-added tax that hits the middle class, not just the rich.
Sanders’ Plan Calls for Tax Increases
In addition to free college, Sanders also wants to provide free healthcare for all. His plan includes a 6.2% increase in payroll taxes, as well as a 2.2% tax increase on individual taxpayers across the board. While the tax increases that he is proposing are not for free college, one would have to assume that if taxing Wall Street speculation doesn’t raise enough funds, tax increases for all would be his next option.
Even implementing these taxes, it won’t pay for all that Sander’s plan wants to spend. With a huge gap left, there would inevitably be more taxes to come.
Free College Would Actually Increase the Cost of Higher Education
Any time the government tries to give something away for free, costs don’t decrease, they actually go up. Anyone been paying attention to the rising healthcare costs over the last few years since the Affordable Care Act—aka, Obamacare—has taken effect? Giving away free college would do the same thing to the cost of a college education.
Expansion of the Entitlement Attitude
Offering a free college education also adds to the entitlement attitude of our society. Is everyone currently qualified or able to obtain a college education? No, but not just because of financial constraints. Some people don’t qualify to get into college because of low test scores or bad grades. Currently, there are many students that don’t graduate from college, not because of finances, but because they don’t put the time and effort into learning and doing the amount of work that it takes to pass a college level class. So if college is free, how do we determine who is allowed to get it for free? Is there a cut-off or do we now owe every high school dropout a higher education and degree? Are these people owed a passing grade because they are now entitled to a free college education? Are they owed a degree, even if they can’t pass the college level classes because they were entitled to go to college?
Have we forgotten that there is no such thing as a free lunch?
There are always costs. Someone must pay the bill. And having personal responsibility in the mix is always helpful.
Follow me on social media: Money Savvy Living | Facebook | Pinterest | Twitter | Google+ | Instagram