Ideological Inconvenience and Student Loans
The Bush administration is refusing to expand the low-cost, high-quality health care provided by the VA. Apparently it is "ideologically inconvenient" when a government program beats the private sector, according to Time magazine and today's Paul Krugman column ($).
Ideological inconvenience -- a charming new phrase! -- may also explain why the Republican Congress wastes billions of dollars a year paying banks to make student loans.
For every $100 in loans, guaranteed loans from banks cost nearly $6 more than loans made directly by the Education Department. In 2007, the government will make $76 billion in guaranteed loans, costing it $4 billion more than necessary.
Last year, skeptical of the official figures, congressional Republicans asked the General Accountability Office to examine them. No surprise: the GAO concluded that -- as the White House and congressional budget offices had been saying for years -- direct loans are far cheaper.
Apparently, this study was itself ideologically inconvenient. As John Boehner -- then chairman of the education committee -- put it, "The idea that the federal government can provide this service cheaper than the private sector is, on its face, not possible." Meanwhile, Republicans continue to block efforts to expand direct lending.
If the facts don't fit the theory, reexamine the facts. Is this what it means to reject "the reality-based community"?
The author proposes a 100 percent government-run, all government employee health care system, and a 100 percent government-run student loan program. While we're at it, why not 100 percent government-run law schools, coffee shops and blogs? I'm sure FEMA could make a pretty decent $2 grande latte.
September 4, 2006 1:33 PM | Reply | Permalink
If you're referring to the post's author, that is a spectacular misreading of what he said. All he claims is that if the facts show that the government can do it more cheaply, it is bizarre to press the claim that the facts must be wrong.
September 4, 2006 9:39 PM | Reply | Permalink
Indeed, let's stick to the facts. The fact is that CBO and GAO both qualify their program cost estimates in very significant ways. To assert that direct loans are cheaper is itself a spectacular misreading of government cost estimates.
September 5, 2006 6:17 AM | Reply | Permalink