“You think the housing bubble was enormous?” asks David Indiviglio. “Meet the education bubble.”
The problem is that we’ve made higher education an entitlement. We have decided that because there is a higher instance of college degrees among the prosperous middle class, if we subsidize the existence of those degrees we’ll have more prosperity.
This is the same thinking that went into subsidizing housing. The government saw a higher instance of home ownership among the prosperous, and so decided to push more Americans into home ownership using all manner of policies. We saw how that ended in the housing markets, and we’re heading in the same direction with the student loans.
The truth is that a college degree, and a home, are things you should earn for yourself. The prosperous have these things because they applied traits like hard work, perseverance, postponed gratificaton and responsible fiscal management to their lives.
By turning housing and higher education into entitlements, we’re simply giving people the symptoms of success rather than the causes of it. And a long the way, in order to provide “college for all” as some seem to want, we’re devaluing college degrees while simultaneously inflating their cost.
That’s a recipe for another economic disaster not unlike the housing market collapse.