Exposing The Fatal Flaws In Self-Serving Obama-Sponsored Study Which Concludes "Student Debt Helps Economy"
By Tyler Durden
Submitted by Michael Shedlock via MishTalk.com,
When you want to get your message across, you sponsor a study that is 100% guaranteed to come to the conclusion you demanded from the outset.
In this case, a White House study allegedly proves Student Debt Helps, Not Harms, the U.S. Economy.
Hooray!
The White House just released a big report on student debt that contains all the familiar horrors about for-profit schools, indebted dropouts and students defaulting on their loans. But it has an interesting conclusion: That growing stack of $1.3 trillion in student debt is helping, not hurting, the U.S. economy.
That conclusion is sure to rankle the many student advocates and special-interest groups—from real-estate agents to employers seeking new tax breaks for their young workers—that argue student debt is a big “drag” on the economy. (Hillary Clinton and Donald Trump have each decried the rise in student debt.)
The surge in student debt occurred largely on President Barack Obama’s watch, though it began several years earlier. Since early 2009, when Mr. Obama took office, student debt has nearly doubled, to about $1.3 trillion today, according to the New York Federal Reserve.
Monstrous Report
The 77-page “Investing in Higher Education” report from the White House Council of Economic Advisers backs up its claim that “debt helps” with dozens of charts and studies from economists and academics.
Here are a few examples.
College Earnings Premium
Cumulative Earnings vs. Debt
Lifetime Earnings
Charts Not in Dispute
The report has 77 pages and 45 charts. I do not dispute the charts.
But what do they show?
The problem with the study is it cannot prove what would have happened to those kids had they not gone to college.
Simple Question
Do the college kids earn more because they went to college or because they graduated from high school with an ability to read, write, speak coherent English, and do basic math?
The answer is likely mixed. Those with degrees in engineering, computer science, robotics, law, medicine, etc, likely did far better because of their degree.
But what about the kid with an English degree working as a retail clerk or manager at Target, McDonalds, or Home Depot?
Many of those who did not go to college were not bright enough or motivated enough to get into college.
Straight-up comparisons of those who went to college vs. those who didn’t are flawed.
Report Failures
Let’s assume that college is a good idea. There is still a question of how much college costs and why.
The report did not address unions, athletic coaches making millions of dollars, the massive rise in administrative costs, or pensions.
The report failed to mention Bush’s bankruptcy reform act of 2005 that made student debt non-dischargeable in bankruptcy.
The report failed to mention that costs soar every time government meddles in something.
Median Household Income vs. College Tuition
The report did blame the “Great Recession” stating states cut payments …read more
