April 7, 2013

Sometimes government should pick winners

I recently read an opinion piece from a liberal-arts major who complained that the increasing talk among governors on subsidizing study in science, technology, engineering and mathematics is an inappropriate case of the government picking winners.

I personally wish our government would pick more winners. After all, there are many activities that would not be done sufficiently if the government did not devote our tax revenue to them. The interstate highway system, national defense, the justice system and international trade agreements are all public goods the government provides to make our economy more efficient. The private sector can help but can’t do it all, so this is a legitimate role for government.

One other public good may be even more important. We need a well-educated workforce, and this requires education beyond high school. Unfortunately, education is expensive, often outpacing inflation, and our economy cannot afford to fail low-income children.

The subsidy our nation offers to higher education has been falling over the past couple decades. Even our SUNY schools, which started with a goal of making higher education almost free, now leaves four-year graduates with between $50,000 and $100,000 in debt upon graduation. Students who borrow to fund a four-year degree at a private college may be a quarter-million dollars in debt by the time they graduate.

Imagine a 17- or 18-year-old who just got their license and who believes a new car would enhance their quality of life in their senior year. They go down to the car lot and tell the dealer they want a new car. The dealer tells them they can have any car they want, and they won’t have to start paying for another five years when they land a job after college.

If that’s how we sold cars, a lot more kids would be driving around in Ferraris. Unfortunately, it is how we sell education. We leave to teenagers these important decisions that will affect their financial future for decades and will affect our global competitiveness for generations. They may be saddled with debt for their entire working life.

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