--- In FairfieldLife@yahoogroups.com, "Patrick Gillam" <[EMAIL PROTECTED]> wrote: > > If we're going to amortize the costs of education > over the lifetime the knowledge is applied, elementary > schools would charge parents $100,000 to teach > little kids how to read. > > The same goes if we peg costs to the education's > potential value. > > It's just not practical, culturally accepted or fair. > > - Patrick Gillam
Actually, I always thought a variation of this was a good idea. Educational costs should not be expensed, it should be treated as a capital investment -- which it is -- human capital. The most basic and valuable kind of capital. When the state goes to build a bridge that will last 70 years, they don't try to expense it -- that is, they don't try to pay for it all out of this years budget. They issue long term bonds and these are paid off over the long run - ideally matched to life of the asset. And accounting theory and practice, GAAP, is very clear on this that costs should be matched to the life of the item being purchased. It really distorts governement budgets to have long term capital investments expensed, particularly when there is strong pressure (and mandates at many state and local levels) to balance budgets. What gets cut? Well, education. Which is lumped in and treated equally with annual operating expenses for the government. Its a very poor system of managerial accounting. Under an evisioned system, students would take out long term mortgages on their educational expenses (or parents would take them out in the kids name). Sort of like an on-going long term construction project, new tranches of financing would be given each year. If a student desired more funding, for a better school, or supplemental educational opportunities, they could apply for a larger mortgage. The accrued mortgage -- and along with mortgage long-run insurance to cover peoplewho die or are disable pror to mortgage payoff -- would travel with the "student" over their life. Payback rates would be tied to income levels and handled directly by state and federal tax agencies. As you make more, you pay more back on your mortgage -- which funded your skills and abiliteis which allow you to makeyour living. After a transition period, as a taxpayer you would no longer pay for any current societal educational expenditures in your taxes -- thus your basic taxes would go down, offsetting the increased taxes for your educational mortgage repayment. Society would chip in some funds to help pay for various "paydowns" and exemptions from mortgage repayment by some who are serving society in extrordinary ways -- and also to account for and compensate students for the general wideranging positive effects that accrue to society from an educated populance -- beyond those accruing to the individual, aka externalites. As a simple example, if $1000 in educational funding produces 10,000 of present value lifetime benefis to the student, and $5000 of present value benefit to society (decreased jails, courts, welefare, health costs, dumb voting (joke, but true), etc), then society may kick in $250 to the student, thus paying down the student's mortgage for that "tranche" to $750. This example highlights the extraordinary high returns accruing to investments in human capital -- to the student and to society. Numerous econometric studies have shown that investmentin human capital far exceeds investment in physical capital. (Even though investment in physical capital is also a great thing and responsible for higher productivity rates and consequently higher national wage rates.) The end result will be much higher allocations for education than is currently done, much greater educational choice and tailoring of education to meet individual needs and goals. And a huge lowering of social costs as a more educated society places less dysfunctional demands on society. And higher incomes for students, and much greater life satisfaction for students. And proven techniques for refining the foundation of learning -- consciouness -- and which are shown to improve learning and analytical abilities -- could be included in the mortgage. And teahers would make a salary comensurate with the great value they bring to society. Kenny H would be making $100,000+, plus strong benefits. Why would any sane person oppose such a system? To subscribe, send a message to: [EMAIL PROTECTED] Or go to: http://groups.yahoo.com/group/FairfieldLife/ and click 'Join This Group!' Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/FairfieldLife/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
