Students recently stormed the headquarters of Britain's ruling party protesting plans to nearly triple tuition fees from about 3,000 pounds, or about $4,800, to 9,000 pounds, or about $14,500.
What I find incredible is that if there are ever protests in the U.S. lately it's generally Tea Partiers complaining about Big Government and taxes, despite the fact that we've got one of the lowest tax rates in the world
Compare what the Brits are mad at with what we put up with -- in the U.S. the cost of college can top $50,000 at a private college and typically half that in a public school. This wasn't always the case. A generation ago, college costs were not only lower but federal grants accounted for 70 percent of the cost of a degree; now loans make up 64% of the cost. And our next Speaker of the House, John Boehner, made no bones about taking donations from the student loan industry when he was minority leader, the lenders that make college even MORE expensive, profiting from interest rates that we subsidize.
How did the cost of a four-year degree morph from manageable to through-the-roof? As I pointed out in my book, America, Welcome to the Poorhouse, the finger of blame points at former president and Tea Party hero Ronald Reagan, who ran for governor of California on a promise to crack down on the "freaks, brats and cowardly fascists" who made up the student protestors at UC Berkeley. The Gipper continued his vendetta against the government subsidy of "intellectual curiosity" while campaigning for President and while he didn't succeed at abolishing the U.S. Department of Education, he did halve the portion of the federal budget spent on education from 12% to 6%. Of the 30 OECD countries, the U.S. is now the third-lowest spender on higher education.
It's not that the majority of Americans aren't worried about affording college given that a sheepskin is vital in this increasingly globalized world. A poll released two months before the presidential election showed that 70% of parents said making college affordable was an important issue for them.
UK citizens are also better off when it comes to retirement. As I mentioned in my September 6 post, starting in 2012 virtually every UK employer that doesn't currently offer a pension must enroll employees in a 401(k) style plan that features a minimum employer contribution of 3% of pay. As for us? President Obama's so-called 401(k) experts simply support "automatic enrollment," in which employees with a 401(k) plan contribute 3% of their pay -- one third of what is needed -- without requiring a minimum employer contribution. As for the 50% of the Americans with no plan at all? They'll get an "automatic IRA," in which employees can contribute but employers don't have to.
It's pretty incredible that despite the fact we spend less subsidizing our population's well-being -- our Social Security program is also among the least generous -- we're running record deficits. I'd contend that maybe the biggest cause of the shortfall isn't government expenditures but our too-low tax rates on the rich since it's lower than all but one of the 17 countries that make up what used to be known as Western Europe. Of course raising taxes is not an option given the Tea Party's bloodless coup of Congress. Our Founding Fathers are shaking their heads in disbelief.