There is an interesting article on Politico.com
http://www.politico.com/news/stories/0712/79041.htmlBasically, the article says that President Obama over-promised on delivering more college graduates by 2020 (which he thought he could do through both federal grants plus federal tax credits and deductions on individual 1040s).
I think it brings up another topic – that of the effectiveness (or ineffectiveness) of a long-term stated goal of government funding – that of overshooting the good and ending up with a wasteful situation.Whenever the government decides to engage in this sort of activity of subsidizing an activity, they end up helping some but also wasting federal tax dollars on others because they simply "push it too far."
A good example is in 2004 and the coming of the housing bubble. Fannie Mae and Freddie Mac were encouraged by officials in the federal government (then President Bush, both houses of Congress, etc.) to increase the availability of home loans and get more people into their own homes. Obviously this was well-intended, since home ownership is considered an American Dream as well as creates other positive things (better neighborhoods, schools, etc.)
Homeownership rose to record levels – topping out at 69.2% in the fourth quarter of 2004.A good example is in 2004 and the coming of the housing bubble. Fannie Mae and Freddie Mac were encouraged by officials in the federal government (then President Bush, both houses of Congress, etc.) to increase the availability of home loans and get more people into their own homes. Obviously this was well-intended, since home ownership is considered an American Dream as well as creates other positive things (better neighborhoods, schools, etc.)
Guess what? All those people in all those houses probably shouldn’t have been there – since a few years later, many were foreclosed on - as the economy recessed and housing prices fell. This was government “overshoot” – too much money put into a great idea pushes some people into a situation where they simply don’t belong.
Unfortunately, government overshoot also means that some people who SHOULD have purchased a home never did… so not only does the government overshoot, it also is not very precise either.I think the same thing is happening right now with the push for more college graduates through more grants and tax credits/deductions. Some high school kids are simply not best served by going to and trying to graduate from college – at least not at 17 or 18 years old. They would be better off learning a trade, or going to the military, or some place besides college – and maybe come back when they are older – like 20 or 25 or 30… or then again – maybe never.
Yet these increased federal grants and tax credits and deductions results in overshooting – pushing too many people into a situation where they simply don’t belong.And just like housing, the government also misses – there are still 17-20 year olds who belong in college but the government can’t get to them due to imprecision of the policies.
