Ryan, I completely disagree. I am surprised that you would think that the society benefits more from the education than the individual. According to me, if I have higher education, I get a better job, better salary, more respect in social circle. Compared to this, what does society get if I am educated?
And looking at how tuition fees are at all time high and people are still paying them, I would not say that people are under investing in education.
EDIT 1:
For some reason, I am not able to reply to some of the replies to my comment, so let me clarify.
What is society made of? Individuals. Obviously, if individuals are better off then society will automatically be better off. Isn't it?
So if you think by providing education to an individual, society becomes better, why don't we provide good healthy food for all the individuals and we will solve the obesity problem and end up with a really healthy society? How about providing free access to a high quality gym and personal instructor? I see that you are disagreeing and you would say, one has to draw line somewhere. And in my opinion, if you think that Government should be not be responsible for good healthy food (the most important thing for an individual, even more than education), I don't understand how you can say that Government should provide public education.
EDIT 2:
And here's why I am not in favor of government programs. A bureaucrat has no incentive what so ever to please their customers (i.e. taxpayers). [Quick, tell me, how many government agencies do a good job in your opinion?] By nature, government will try to find a one-size-fits-all solution to education, which does not work. As someone else said, I am all in favor of voucher system which gives control back to people who care about education and let market place offer variety of solutions for people's education needs.
Ryan didn't claim that society benefits more than the individual, he just said that society benefits "as well as the individual".
This is an important distinction, because I think a big part of the disagreement here is how big a gap you'd need to see to call something a "public good" and accept some degree of government regulation.
In my intro economics textbook, on the section about externalities, the authors used the typical example of pollution as a negative externality. For a positive one, they wrote (paraphrasing) "economists have long recognized that certain professions, such as science and engineering, produce benefits to society that greatly exceed the immediate rewards that the practitioners are able to recoup..."
So it really is a question of degree. The people who did the original research that led to the creation of the internet or decoding the genome have contributed vastly more to the general wealth than people who lobby for the extension of copyrights that were set to expire (who probably profit personally but destroy wealth), but I bet they earned a lot less. I'm not opposed to a government that provides incentives through grants to the researchers.
Unless you're an extremist, the principles are the same, it's just where you draw the line. I'd call myself a moderate fiscal conservative - in general, I'd prefer market solutions, but I'm not a small government zealot. P
One quick thing about public health care - I got an interesting perspective from a physician who worked in an emergency room. He said that people who are broke and have no health care still get their health care paid for by the taxpayer. They just wait until problems become so awful that they have to crowd the emergency room, where treatment is at its most expensive. They're on the hook for the money, but you can't get blood out of a turnip, so the hospital is never reimbursed, and private emergency rooms transfer the patient to the county (taxpayer supported) hospital asap. Unless you're prepared to deny people with extremely bad health conditions access to the emergency room, you, as the taxpayer, are going to pay for the "emergency room public health clinic". So would you rather pay early, when it's cheap, or later, when it's extremely expensive?
the hospital is never reimbursed, and private emergency rooms transfer the patient to the county
This is not the case. Hospitals (including private ones) get some reimbursement from Medicare for bad debt cases. My wife manages the department responsible for this reimbursement at a local hospital, and we've had endless discussions about this. And in a conversation with their CFO over a friendly ping-pong game, I was told that contrary to public wisdom, the ER is actually profitable -- and this is an urban hospital with a high "disproportionate share" of bad debt.
I should clarify this - I meant that the hospital is never reimbursed by the patient. Medicare generally pays only a fraction of the bill, though the bill is often inflated in anticipation of this fractional payment (from medicare or HMOs), so the numbers aren't straightforward.
Either way, the taxpayer is on the hook. If some ERs are profitable in spite of a high percentage of bad debt, this just means that the taxpayer is carrying an even higher debt burden.
That's mostly correct, except that there are three classes of payers: Medicare/Medicaid, cash patients, and insurance. They form three separate supports that must together cover the expense.
In practice, Medicare/Medicaid form a near monopsony -- they're the 800lb gorillas, and can demand capitulation to their reimbursement rates. On the opposite side, cash patients are few, and many of those are expected to be bad debts, and so contribute little. Thus, the pressure release must be through private insurance payments. And that's why your insurance rates are increasing.
This is also why many experts fear that Obamacare's plans will squeeze private insurance out of the business, despite the "public option" being putatively off the table. If regulations hold government reimbursement down to a fraction of real cost, private insurance is forced to take up the slack. That necessitates raising rates, and thus forces customers out of private plans. But they're required to be insured, so they must move into a government-controlled plan.
A proper and accurate accounting is important. We should know how much of the cost of treating patients who don't pay is covered by the hospital, the private insurance companies, the taxpayer, etc.
In terms of the argument about the "public good", though, I think the original point is unaffected. You wrote that private insurance "is forced to" take up the slack. Who is forcing them to treat these patients? Medical ethics does to some extent, there is what is called an "imperative to rescue". But there's also the long arm of the law - an ER that refuses to treat a critically ill patient may face criminal charges and other sanctions. Private hospitals definitely do transfer these patients to county if they can possibly get away with it, but at times they must treat and receive medicare reimbursement that doesn't cover the cost.
So we actually have a public health care plan. Right now, our public health care plan is a patchwork of regulations that encourages people with no money and no insurance to use the ER for primary care, resulting in a burden on taxpayers, private insurance, and private hospitals. A lot of people, myself included, believe that this has resulted in an extremely expensive and ineffective system of quasi-public health care. This is why I would support some form of organized public health insurance, in spite of the fact that I tend to lean toward market solutions and small government as a general principle.
In fact, a recurring discussion between my wife and I includes me asking her these same questions ("Who is forcing them to treat these patients?")
I'm generally unsatisfied with the answers. A legitimate part of it is that it's a Catholic hospital, and so feel a greater responsibility to help.
But there's also an aspect of just needing to play along with the regulatory game. It seems that they've got themselves so dependent (or is that "addicted"?) to governmental aid, that they can't see a way to continue without it -- and that means full participation in all the wasteful, inefficient stuff. I believe (without quantitative proof) that at the bottom line they lose more to the bureaucratic garbage than they gain in subsidy.
Ryan, I completely disagree. I am surprised that you would think that the society benefits more from the education than the individual. According to me, if I have higher education, I get a better job, better salary, more respect in social circle. Compared to this, what does society get if I am educated?
He never said more goes to society. He just said some of the benefit cannot be captured by the individual.
This is trivially true. Employers pay an individual somewhere between nothing and the value that individual contributes. If an educated individual contributes more than an uneducated one, then the educated individual is likely to get more salary than the uneducated one AND the employer has a larger gap between salary paid and value captured. (Incidentally there is typically a gap between the value provided by the employer and the revenue collected, which provides yet another layer of more broadly spread societal benefit that is not seen by the individual.)
That excess value is captured by private companies that may or may not even have existed at the time that the individual was being educated. That is value going to society that is not captured by the individual, and hence which can't be recouped through any kind of student loan program.
What you are describing are simply the gains from trade. They exist for any good or service which is voluntarily traded.
Therefore, if we favor subsidies for education, we should also favor subsidies for purchasing industrial machines, computers to automate labor, or any other investment.
Not any other investment, by a long shot. Because while there is a potential benefit to government assistance, there are also potential costs in terms of distorting markets, inefficient allocation, and creating oversupply. There is a trade-off, and finding the right one can be difficult.
That said, historically we've gotten surprisingly good returns from subsidies on research, transportation, and certain areas of telecom. (The early Internet is a shining example.) However a certain amount of caution needs to be maintained because once a precedent has been set then regulatory capture sets in and the long term result of those unintended consequences tends to be very bad.
Not any other investment, by a long shot. Because while there is a potential benefit to government assistance, there are also potential costs in terms of distorting markets, inefficient allocation, and creating oversupply.
Absolutely that is possible. But when you look at historical data, and you compare the trajectories of countries with and without strong educational systems, publicly available education has proven to be a worthwhile investment.
You're misrepresenting Ryan's statement. His argument is not that public education benefits society more than the individual. His argument is that public education is a net benefit for society.
And my point is, anything which benefits an individual (as long as it's not illegal) automatically benefits the society, as society itself is made of individuals. Is there any case where individual is better off but society is not?
Not necessarily. If the government were to, say, buy big screen TVs for its citizens that wouldn't necessarily create a social benefit as it may promote TV watching and negatively impact health. Education, however, it likely to give people perspective and options that will lessen their chance of looking to the criminal sphere for income and becoming a social cost via the prison system.
Now you are mixing two things. I am stricly opposed to Government forcing anything on individuals as it doesn't lead to any good. So if Government forces everyone to buy TV (or for that matter anything else), obviously it's no good for society.
I was talking about any voluntary, legal action by an individual which benefits himself. Such an action always leads to improvement in society as society is made of individuals.
Not everything that benefits an individual benefits society. Reallocation from the general public to an individual can benefit an individual, but be detrimental to society. Also some things may benefit an individual, but only provide marginal benefits for society.
"Reallocation from the general public to an individual can benefit an individual, but be detrimental to society"
Repressive copyright laws the take ideas and culture from the public domain and give them to individuals.
"Also some things may benefit an individual, but only provide marginal benefits for society."
>So you prefer society over individuals. Seems like it's >1922 again and USSR called!
Where did I say that? You said that everything that benefits an individual benefits society. I was pointing out that in some cases that the benefit to society is infinitesimal.
Diminishing returns. The USSR overeducated much of it's population to the point where society would have been better off if they had spent more time working and less time learning.
Diminished public good. Copywrite that never expires.
Graft. Often public resources are sold to individuals at less than market cost.
I would argue that public education doesn't even benefit society. At least when you compare it to the private alternatives, even considering the massive subsidies the public version receives.
Public education stifles innovation. It wastes a lot of resources. Its far more geared towards instilling an obedient population than an inquisitive one.
If government were to heavily tax all private learning (formal education is just one kind) to pay for the "public option", we'd have very few private magazines, websites or other vehicles that currently keep us learning our whole lives. Would we settle for one magazine or website for each town?
Are you kidding? An educated citizenry is one of the most important things a society can have. The "better job, better salay, more respect" to which you refer are all functions of the value that you provide to the community.
Better in a moral sense or some abstract notion of the word? They very well may not be, the connection is murky certainly.
Better in the sense of being more valuable to society? That is often obvious. While a brick layer may be a fine and noble man who truly contributes to society, I think it is safe to say that the doctor's contribution is more valuable.
Also, when talking about a democracy, the people are meant to play a role in the governance. An educated populus will play that role better and make better choice in who they elect for leadership and what ballot measures to support.
On average, an educated person will contribute more to the governance and more to the economy than a less educated person. This does not make them morally better or better in the eyes of God, but it does make them more valuable citizens.
Ryan, I completely disagree. I am surprised that you would think that the society benefits more from the education than the individual. According to me, if I have higher education, I get a better job, better salary, more respect in social circle. Compared to this, what does society get if I am educated?
I don't know if this outweighs what the individual gets, but society certainly benefits from educated individuals. Shiny new iphones, better health, more entrepreneurs, better research... I could make a huge list of things that people smarter than me have done to make my life better.
EDIT 1: <snip> why don't we provide good healthy food for all the individuals
Some countries are doing just that, in schools, or other places. Most countries monitor their citizens health and provides incentives to get healthier.
And looking at how tuition fees are at all time high and people are still paying them, I would not say that people are under investing in education.
EDIT 1:
For some reason, I am not able to reply to some of the replies to my comment, so let me clarify.
What is society made of? Individuals. Obviously, if individuals are better off then society will automatically be better off. Isn't it?
So if you think by providing education to an individual, society becomes better, why don't we provide good healthy food for all the individuals and we will solve the obesity problem and end up with a really healthy society? How about providing free access to a high quality gym and personal instructor? I see that you are disagreeing and you would say, one has to draw line somewhere. And in my opinion, if you think that Government should be not be responsible for good healthy food (the most important thing for an individual, even more than education), I don't understand how you can say that Government should provide public education.
EDIT 2:
And here's why I am not in favor of government programs. A bureaucrat has no incentive what so ever to please their customers (i.e. taxpayers). [Quick, tell me, how many government agencies do a good job in your opinion?] By nature, government will try to find a one-size-fits-all solution to education, which does not work. As someone else said, I am all in favor of voucher system which gives control back to people who care about education and let market place offer variety of solutions for people's education needs.