DiscussWorldIssues - Socio-Economic Religion and Political Uncensored Debate - View Single Post - Cost of higher education goes up faster than healthcare and no one cares

**Senasivar** · 05-10-2009, 04:10 AM

that said, the other reason education costs goes up is because the government helps everyone pay for it, so why not?

Economics teaches us the market will charge what people are willing to pay and not exactly what it costs. The market sets the value, not component cost.

With that in mind, if people are willing to pay $20K out of their pocket for a product and someone gives you $5K, you most likely start looking at what you can get for $25K, not going with your original budget and saving $5K.

That's why when you go buy a car, they ask you how much you want to spend a month, not necessarily the grand total.

Or like with tax abatements. It doesn't necessarily mean the house you normally could afford is cheaper, but people tend to buy more expensive homes and the market price drives up. (And that is why developers like it, greater profit line because people will spend more without having to necessarily deliver more - price inflation as currency is added into the market).

05-10-2009, 04:10 AM	#10
Senasivar Join Date Oct 2005 Posts 431 Senior Member	that said, the other reason education costs goes up is because the government helps everyone pay for it, so why not? Economics teaches us the market will charge what people are willing to pay and not exactly what it costs. The market sets the value, not component cost. With that in mind, if people are willing to pay $20K out of their pocket for a product and someone gives you $5K, you most likely start looking at what you can get for $25K, not going with your original budget and saving $5K. That's why when you go buy a car, they ask you how much you want to spend a month, not necessarily the grand total. Or like with tax abatements. It doesn't necessarily mean the house you normally could afford is cheaper, but people tend to buy more expensive homes and the market price drives up. (And that is why developers like it, greater profit line because people will spend more without having to necessarily deliver more - price inflation as currency is added into the market).
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