It’s silly to poll Americans on economic policy questions. They do not understand enough economics to give an intelligent answer. But people keep doing so. A recent poll found that 62% of Americans favored making college free for everyone, and nearly 90% were in favor of making college free for students from lower income families, including a sizable number of Republicans:
Once an idealistic pipe dream of the far left, free higher education is now largely supported by a majority of Americans. Sixty-two percent say they support debt-free university tuition, according to a July survey of 1,000 American adults conducted by Princeton Survey Research Associates International for consumer financial company Bankrate Inc. Among those who are opposed to the initiative, 26 percent said they would support making college debt free for students coming from families that earn less than $50,000 annually. Another 5 percent are willing allow it for those whose families earn less than $85,000 a year.
This seems like a loony idea on both efficiency and equity grounds. Imagine the tuition increases that will occur after college is made free. I should not have retired from teaching. (Or perhaps the government will “regulate” college spending, what a wonderful idea!!)
The following helps to explain why Americans find the idea so attractive:
But when it comes to putting their money where their mouth is, Americans are more reluctant. Among those surveyed, 48 percent [said?] they would not be willing to pay more in federal taxes to fund free college.
I wonder if the near-zero interest rates make people even more prone to think in free lunch terms. Over at Econlog I have a post discussing Trump’s proposed tax cuts, which would balloon the budget deficit. Who will benefit from these tax cuts? People who vacation here:
I would benefit enormously if Trump’s plan were enacted. My taxes would be cut sharply, and so I would join lots of other affluent boomers in being able to stay at 4-star hotels when I visit Bali during my retirement, instead of the lousy 3-star hotels I currently stay at.
So us top ten percenters will enjoy more consumption. But will it come at anyone’s expense? Let’s think in terms of the GDP equation:
Y = C + I + G
Trump plans to increase G, so it’s not coming out of that category. He also plans to cut taxes for working class American, so it’s not coming out of the consumption of the bottom 90%. I suppose you could argue that it will boost GDP, but I doubt it. The Fed would offset any demand-side effects, and Trump’s program looked at in its entirety is anti-supply-side, especially regarding foreign trade and investment.
So that leaves crowding out of investment. Less investment, and less future GDP growth. And it makes no difference whether interest rates are 1% or 10%.
Right now Trump polls extremely well among the old. Perhaps they know that Trump plans to shovel lots of money their way, and leave a poorer country for their children and grandchildren.
Selfish b******s.