<story><title>Why Is College in America So Expensive?</title><url>https://www.theatlantic.com/education/archive/2018/09/why-is-college-so-expensive-in-america/569884/?single_page=true</url></story><parent_chain><item><author>clay_the_ripper</author><text>Could you explain to me how the government control of those things had lead to price increases? Specifically? I hear this a lot but have never heard an explaination and I am genuinely curious of the reasoning</text></item><item><author>leekyle333</author><text>It is interesting to me that the three areas main areas in America that have become exponentially more expensive are healthcare, construction, and education. It&amp;#x27;s curious that they have the most government control.</text></item><item><author>fzeroracer</author><text>The free market does not work in all situations. There&amp;#x27;s a reason why our healthcare is an absolute disaster compared to any other first world country, why our college is far more expensive, why our drugs cost more etc&lt;p&gt;And it ain&amp;#x27;t because of cost control. Every time we loosen the reins a bit and let the &amp;#x27;free market&amp;#x27; take the wheels, we see things get a lot worse for Americans as a whole. Especially when you have giant companies controlling the market entirely, like with ISPs.</text></item><item><author>frebord</author><text>&amp;gt; Ultimately, college is expensive in the U.S. for the same reason MRIs are expensive: There is no central mechanism to control price increases. “Universities extract money from students because they can,” says Schleicher at the OECD. “It’s the inevitable outcome of an unregulated fee structure.”&lt;p&gt;Why do people always reach for central control, when we have the ultimate mechanism of price control as a core part of our society (competition).&lt;p&gt;What happens when the government tries to provide for us:
they gaurantee home loans: Financial crisis,
they gaurantee drug costs: Skyrocketing drug costs,
they gaurantee your student loan: Skyrocketing cost of school&lt;p&gt;By it&amp;#x27;s nature, anything the government subsidizes is going to be taken advantage of. You either have to take full central control (lets not go there) or let the free market actually work. You can&amp;#x27;t layer the two.</text></item><item><author>Domenic_S</author><text>I didn&amp;#x27;t see this discussed in the article, but IMO the main driver is the availability of student loans. When the government guarantees loans, you can lend whatever you want!&lt;p&gt;The price of a TRIPLE occupancy dorm + 7 day meal access is $14,813.29&amp;#x2F;YEAR at UC Davis. The &amp;quot;meals&amp;quot;, if they haven&amp;#x27;t changed in the last decade, are Sodexo garbage. And don&amp;#x27;t forget a &amp;quot;year&amp;quot; doesn&amp;#x27;t count the summer, or winter break.</text></item></parent_chain><comment><author>roenxi</author><text>&amp;quot;The Economy&amp;quot; is a (surprisingly effective!) system for allocating resources. It short-circuits a human instinct that social status and fairness should be the guide, and replaces that with &amp;quot;a persons economic contribution&amp;quot; instead.&lt;p&gt;Now, it turns out that the difference in productivity between people is so great (think the old 10x-100x programmer) that allocating resources according to contribution creates so much surplus stuff that everybody wins, even the unproductive. And, as a side benefit, everyone has an incentive to be productive.&lt;p&gt;The flip side is that Government is made up of ordinary people who often ask &amp;quot;what about fairness and status?&amp;quot;, and likes to interfere to reallocate from productive people to unproductive people. In mild cases you get a healthy level of support for the disadvantaged, in extreme cases you get Venezuela. But in all cases, since the productive people are given less, they create less and there is less available to distribute. In theory this triggers the laws of supply-and-demand, reduces supply and prices increase.&lt;p&gt;The flip side is if the productive people consume their wealth instead of producing with it then we probably could tax them without any ill effects, but I think that is rarer than most people think.</text></comment>
<story><title>Why Is College in America So Expensive?</title><url>https://www.theatlantic.com/education/archive/2018/09/why-is-college-so-expensive-in-america/569884/?single_page=true</url></story><parent_chain><item><author>clay_the_ripper</author><text>Could you explain to me how the government control of those things had lead to price increases? Specifically? I hear this a lot but have never heard an explaination and I am genuinely curious of the reasoning</text></item><item><author>leekyle333</author><text>It is interesting to me that the three areas main areas in America that have become exponentially more expensive are healthcare, construction, and education. It&amp;#x27;s curious that they have the most government control.</text></item><item><author>fzeroracer</author><text>The free market does not work in all situations. There&amp;#x27;s a reason why our healthcare is an absolute disaster compared to any other first world country, why our college is far more expensive, why our drugs cost more etc&lt;p&gt;And it ain&amp;#x27;t because of cost control. Every time we loosen the reins a bit and let the &amp;#x27;free market&amp;#x27; take the wheels, we see things get a lot worse for Americans as a whole. Especially when you have giant companies controlling the market entirely, like with ISPs.</text></item><item><author>frebord</author><text>&amp;gt; Ultimately, college is expensive in the U.S. for the same reason MRIs are expensive: There is no central mechanism to control price increases. “Universities extract money from students because they can,” says Schleicher at the OECD. “It’s the inevitable outcome of an unregulated fee structure.”&lt;p&gt;Why do people always reach for central control, when we have the ultimate mechanism of price control as a core part of our society (competition).&lt;p&gt;What happens when the government tries to provide for us:
they gaurantee home loans: Financial crisis,
they gaurantee drug costs: Skyrocketing drug costs,
they gaurantee your student loan: Skyrocketing cost of school&lt;p&gt;By it&amp;#x27;s nature, anything the government subsidizes is going to be taken advantage of. You either have to take full central control (lets not go there) or let the free market actually work. You can&amp;#x27;t layer the two.</text></item><item><author>Domenic_S</author><text>I didn&amp;#x27;t see this discussed in the article, but IMO the main driver is the availability of student loans. When the government guarantees loans, you can lend whatever you want!&lt;p&gt;The price of a TRIPLE occupancy dorm + 7 day meal access is $14,813.29&amp;#x2F;YEAR at UC Davis. The &amp;quot;meals&amp;quot;, if they haven&amp;#x27;t changed in the last decade, are Sodexo garbage. And don&amp;#x27;t forget a &amp;quot;year&amp;quot; doesn&amp;#x27;t count the summer, or winter break.</text></item></parent_chain><comment><author>nostrademons</author><text>Some examples other than what people have already mentioned:&lt;p&gt;Prescription drugs.  The FDA has a &amp;quot;no existing alternative first&amp;quot; policy - they work on approving drugs for conditions where no current treatment works before they even start considering competitors to existing drugs.  This sounds quite logical, but the effect of it is that every new drug is granted a monopoly for a long period of time before any competitor can even legally sell their alternative, so the drug company can literally charge whatever they want.&lt;p&gt;Building codes.  In my grandparents&amp;#x27; day, it was still possible to construct your own house: you bought a plot of land, hired a concrete mixer to come pour the foundation, bought a lot of 2x4s, and spent a bunch of time hammering &amp;amp; sawing.  Now, you have to conform to all of the local building codes (which in the Bay Area, I&amp;#x27;ve heard, is an 800-page tome), and you need to get approval for every feature of the design from the city building inspector, who has the power to completely block your construction if you get on his shit list.  As a result, the only people who can build housing are ones who have good relationships with the city and the know-how to adhere closely to all the building codes.&lt;p&gt;Zoning.  Even if you have that know-how and relationships, there are some things you just can&amp;#x27;t do with housing.  Own a 1&amp;#x2F;4 acre with a single family home and want to convert it to a 4-plex?  Too bad, it&amp;#x27;s not zoned for that.&lt;p&gt;And you can see the economic impact of all of these by looking at situations where they&amp;#x27;re absent.  Consider generic drugs: once a generic has been approved, the price of a drug can fall by 90% or more.  Or compare housing in the Houston metro area, where you can get a 3BR2BA for under $200K, to the Bay Area, where the same house will set you back $2M.</text></comment>