This Just Happened: And You Will Pick Up the Tab

We would like to tell you two stories about three people. For the purpose of these stories, let’s call them Tom, John and Ralph. All three individuals are in their senior year of high school at the same school and have excellent grades.

Story One

Part I – The Restaurant Patron

Tom is 18 years old and decides to go to a restaurant. He walks down a street full of restaurants and peruses the menus and prices displayed outside of each restaurant. He finds a restaurant that has all of the foods he has ever wanted to eat, but the prices are very high. He decides to enter and order dinner in spite of the high prices. He mentions his concern over the price to the seating hostess and she replies that he can put his meal on his credit card and pay over time with interest. Tom agrees. The service is fantastic and Tom eats all of his favorite foods. As the meal continues, Tom begins to realize that while he loves the food, the cost of the check will be astronomical.  Prior to dessert, Tom begins complaining to the tables around him about what the bill will be. Near Tom, there is a wealthy family who is also eating dinner. Seeing they will probably not have a difficult time paying their bill, Tom begins pounding the table and demanding the wealthy family pay his bill as well. Clearly, they can afford it. Tom makes such a racket in the restaurant that several news teams arrive, eager to speak to Tom about his plight. They interview Tom and empathize with his concern over how large the check will be. Others in the restaurant join Tom in complaining to the news regarding the size of their bill. They vilify the wealthy family and all agree the wealthy family should pay for their bills as well.

Would this ever happen?  Never.

 

Part II – The Private School Student

Tom is 18 years old and decides to go to a college. He walks down a street full of colleges and peruses the majors and prices displayed on the website of each college. He finds a college that has all of the classes he has ever wanted to take, but the prices are very high. He decides to enroll and order go to college there in spite of the high prices. He mentions his concern over the price to the admissions department and she replies that he can get a student loan and pay over time with interest. Tom agrees. The school is fantastic and Tom takes all of his favorite classes. As the college continues, Tom begins to realize that while he loves the school, the cost of the loan will be astronomical.  Prior to his senior year, Tom begins complaining to the other students about what the bill will be. Near Tom, there is a wealthy student who is also going to school. Seeing the student will probably not have any difficult time paying for college, Tom begins demonstrations and demands that the “top 1%” pay his tuition and shouts that his tuition should be forgiven. Clearly, they can afford it. Tom makes such a racket during the demonstration that several news teams arrive, eager to speak to Tom about his plight. They interview Tom and empathize with his concern over how large his debt will be. Others in the school join Tom in complaining to the news regarding the size of their debt. They vilify the top 1% and all agree they should pay for their tuition as well.

Would this ever happen?  Yes, it already has. Provided in a law signed by Obama, student loans can now be repaid based on income. Student loans can also be forgiven after 20-25 years. The net effect of this program is that student debt burden will be left to taxpayers to address and the check is passed to the wealthy family dining in the restaurant.

Story Two

Part I – A New Car

Ralph has always wanted a brand-new Mercedes-Benz. One day, Ralph decides to go to the car dealer to look at cars. An employee hands the keys and the title for a brand-new Mercedes to a very shocked Ralph. When Ralph asks the man where the car came from, the man tells him that the government is now giving free Mercedes-Benz cars to every 18-year-old who lives in New York State whose family makes less than $125,000 per year. Ralph asks if he has to pay for the car. The man waves his hand in a dismissive gesture explaining that the “wealthy” people of New York were forced to buy the car for him.  Ralph is thrilled anyway. He got what he wanted and the thought his shiny new car makes the “who’s paying for this” argument seem less important. Ralph’s parents are thrilled. They no longer have to worry about Ralph’s transportation.

John lives next door to Ralph and also has been dreaming of a new Mercedes. He too goes to visit a car dealer, but nobody hands him anything. He asks his parents why and they tell him that he will not be getting a free Mercedes because their household makes too much money. John must now take out loans and ask for his parent’s assistance to pay for his car. John eventually gets his car, but will have to pay it off over time.  In addition, John’s parents receive an increased tax bill that includes the price of their neighbor Ralph’s new “free” car.

Would this ever happen? Never.

 

Part II – New York State SUNY and CUNY Free Education

Ralph has always wanted to go to college. One day, Ralph decides to go to visit a New York SUNY school. An admissions counselor hands a packet outlining a free education to a very shocked Ralph. When Ralph asks the man where the program came from, the man tells him that the government is now giving free higher education to every 18-year-old who lives in New York State whose family makes less than $125,000 per year. Ralph asks if he has to pay for the education. The man waves his hand in a dismissive gesture explaining that the “wealthy” people of New York were forced to buy the education for him.  Ralph is thrilled anyway. He got what he wanted and the thought of college makes the “who’s paying for this” argument seem less important. Ralph’s parents are thrilled. They no longer have to worry about Ralph’s education.

John lives next door to Ralph and also has been dreaming of college. He too goes to visit a SUNY school, but nobody hands him anything. He asks his parents why and they tell him that he will not be getting a free education because their household makes too much money. John must now take out loans and ask for his parent’s assistance to pay for his education. John eventually gets his college education, but will have to pay it off over time.  In addition, John’s parents receive an increased tax bill that includes the price of their neighbor Ralph’s new “free” education.

Would this ever happen?  Yes. It happened today.

What is the difference between Part I and Part II of each of these stories? The word “college”. That’s it.

We’ve decided to share these stories in this way to prove a very important point. While part one of each of these stories would clearly test the boundaries of our society, when college is substituted in each part two, the argument is reframed in our mind based on how the left pushes their arguments of entitlement. We may not be entitled to a Mercedes or dinner at a fancy restaurant, but we are definitely entitled to a college education, right?

Consider this, if I know my dinner or car is free, is there any incentive for me to shop around and get the best deal? With any consumer good or service, the burden is on the customer to find the best price and value. With any purchase, we as consumers are required to weigh cost, benefit and value. Is there any incentive for students to demand private colleges provide value? Is there any incentive for private colleges to lower their price tags to be more competitive? Unfortunately, the opposite is true when you and I are picking up the tab.

Our public higher education system is on a similar track. Today is a landmark day for New York State higher education. Governor Cuomo signed into law a bill that makes higher education at the state’s SUNY and CUNY schools free of charge as long as the family makes less than $100,000 annually and meets other residency conditions. If you think the Mercedes example is far fetched, you would be wrong. Based on the benefit provided in this plan, the cost of a new Mercedes is roughly the same monetary value that could be provided assuming a student’s family meet the qualifications. We all want a Mercedes in our driveway. Maybe it’s a sense of guilt or fair play, but we see things a bit differently. We would’t expect our neighbors to be forced into buying one for us.

By making college an entitlement, we are given the privilege as taxpayers for footing the bill. This is not an assault on lower income families, those looking to better themselves through education or those looking to make ends meet. This is a criticism of yet another program that provides privileges to some while passing the bill to the very people who are restricted entry. These individuals are doubly penalized as they need to purchase the service for themselves while also shouldering the burden of “free” services granted to others.

Census figures have recently showed that for the first time in a decade, New York State showed a decline in population.  This is not a surprise to many. New York’s level of economic freedom is also the worst in the country, according to the new Economic Freedom of North America (EFNA) report, which ranks states according to their levels of economic freedom.

Taxpayers vote with their wallets. Tax payers vote with their feet. For many, this won’t be the final straw. However, at some point the Safe Act, oppressive business taxes or entitlements such as this one will force many New Yorkers to seek opportunities and residence outside of Governor Cuomo’s kingdom.

 

 

 

 

 

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