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American Families Plan, what are your thoughts?


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16 minutes ago, Condessa said:

No, I can't agree with that.  Major major issues, yes.  But there are some things our healthcare system is really good at.  Other developed countries with better pay structures often send difficult cases here, because our innovation in new treatments is really, really good.

Fair enough. Can you agree that Americans want more health care not just more money to spend on health care?

 

If the result was that more money got them better health care, they might be happy.  I would think that just getting them higher costs is not what they are wanting. 

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1 hour ago, Carol in Cal. said:

Oh sure it does.  There is a MASSIVE wealth transfer associated with the Baby Boomers and their parents and children.  They are called the pig in the python for a reason.  And you can certainly model these events; any good actuary would be able to do so.

But there have long been tax planning strategies in place to minimize taxes on wealth transfer, they are not going away. They will change and adapt as always. I still disagree that the majority of new revenue is going to come from these once in a lifetime time events affecting only a very small percentage of people. Even with the current crazy housing market, given the exclusions and AGI requirements, most are not going to take a one time hit under the new proposal. I can understand how it might seem different living in a HCOL state. But that is not how the policy is designed nor how the expected revenue gains were estimated. I think you are overestimating the amount of tax revenue to be realized from these once in a lifetime events (and the percentage of the population actually affected after exclusions and limits) and underestimating the revenue to be received from the consistently wealthy.

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1 minute ago, Frances said:

But there have long been tax planning strategies in place to minimize taxes on wealth transfer, they are not going away. They will change and adapt as always. I still disagree that the majority of new revenue is going to come from these once in a lifetime time events affecting only a very small percentage of people. Even with the current crazy housing market, given the exclusions and AGI requirements, most are not going to take a one time hit under the new proposal. I can understand how it might seem different living in a HCOL state. But that is not how the policy is designed nor how the expected revenue gains were estimated. I think you are overestimating the amount of tax revenue to be realized from these once in a lifetime events (and the percentage of the population actually affected after exclusions and limits) and underestimating the revenue to be received from the consistently wealthy.

Actually, they ARE going away with this proposal.  The stepped up basis for real property is in question, as is deferring capital gains on inherited property until it is sold; and capital gains tax rates are raised significantly.  Right there that knocks out many typical tax planning strategies, particularly the more inexpensive and well known ones easily available to the middle class.

I think you are underestimating the significance of taking these away just as the largest population bubble in history reaches the ages ranges where they are most likely to use them, and the magnitude of that transfer.

 

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2 hours ago, Condessa said:

Why would it get spent somewhere?  This isn't money the government has.  It's debt.  They don't plan on borrowing a set amount and then decide how to allot it, they plan to borrow whatever they don't have on hand and spend what they want to spend.

This is a little like saying I might as well go out and buy an expensive trip for my family on the credit card, because the money is going to get spent, I might as well spend it on something with value to my family instead of hording doodads on credit instead.  These aren't the only options. 

Not really. Historically, once one faction of our government has proposed debt spending for x,y, and z, another faction has proposed "if we don't spend it there, we will spend it here", and everyone seems to think that is a good idea. Sigh.

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1 minute ago, Carol in Cal. said:

Actually, they ARE going away with this proposal.  The stepped up basis for real property is in question, as is deferring capital gains on inherited property until it is sold; and capital gains tax rates are raised significantly.  Right there that knocks out many typical tax planning strategies, particularly the more inexpensive and well known ones easily available to the middle class.

I think you are underestimating the significance of taking these away just as the largest population bubble in history reaches the ages ranges where they are most likely to use them, and the magnitude of that transfer.

 

Some are going away, but new strategies will be developed, as always. I think coming from a HCOL state might make it harder to see that only a very small percentage of the population will actually be affected. And while I would feel bad for someone taking a hit on the sale of their primary residence when they planned to use the gains to fund their retirement, I don’t have any issue with heirs not getting stepped up basis on real property. And my heirs are likely to be affected by this some day as our house has seen a significant increase in value, so I’m not just talking theory here. Having the parent’s gains never taxed just seems like a huge loophole to me. 

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1 hour ago, frogger said:

Fair enough. Can you agree that Americans want more health care not just more money to spend on health care?

I think maybe so, but I am not certain I am understanding you correctly.  Most parts of our country don't have a shortage of healthcare facilities, providers, and treatments, so I am assuming by "more health care" you mean more universal ease of access to healthcare.  Is that right? 

I imagine that could be done either by targeting help affording care to the lower-middle class demographic that most struggles to afford care, or by lowering healthcare prices in general, which latter sounds like what you're suggesting.

 

I agree that this is the right goal, but feel that we need to exercise caution that the solutions we enact to lower healthcare costs don't inadvertently remove some of the incentives for the great medical innovation in this country.  The twelve-year monopolies granted by the government to companies that develop new medications create crazy high drug prices for those years, it's true--but they're high prices for drugs that exist.  

It's awful that people can't get the best treatment because of the astronomical prices, but removing a significant portion of the funding for the drug development industry would mean far fewer new drugs developed.  My kid is two weeks into a new chemo med on drug trial.  When we asked if we could pay for it out of pocket if he didn't get it on the trial and we couldn't get insurance to pay, they said, "only if you are literally millionaires".  And yet, without the financial incentives for developing new drugs, no one would have the new, better chemo, because it wouldn't exist.  I would way rather see the government fund patients' access to new, expensive drugs still under monopoly than remove the monopoly incentive.  Alternatively, I suppose the government could give financial incentives directly to companies that develop new meds--but that would be far more expensive, because they would be paying all of the financial reward instead of covering it for those patients who weren't able to get it through trial or insurance.

 

ETA: I do think that the ways to extend those drug monopolies should be eliminated.  The incentive of the 12-year monopoly is already huge, and there is too much potential for abuse in the extensions (like with epipens).

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46 minutes ago, Frances said:

Some are going away, but new strategies will be developed, as always. I think coming from a HCOL state might make it harder to see that only a very small percentage of the population will actually be affected. And while I would feel bad for someone taking a hit on the sale of their primary residence when they planned to use the gains to fund their retirement, I don’t have any issue with heirs not getting stepped up basis on real property. And my heirs are likely to be affected by this some day as our house has seen a significant increase in value, so I’m not just talking theory here. Having the parent’s gains never taxed just seems like a huge loophole to me. 

That seems like a very cavalier stance to me.  It always takes a long time for ‘new strategies’ to make their way down into the middle class and become common enough and inexpensive enough to be popularized and implemented there.  In the meantime, the government is going to make a lot of money off of these changes, while falsely implying that they only apply to people with very high regular incomes.

It is true that I live in a high COL state, but it is also true that it is the state with the highest resident population—almost 40,000,000.  Inevitably that’s going to result in a lot of such incomes.  

If parents gains are taxed on inherited receipt rather than at sale, it will force the rapid sale of a lot of family homes.  That pretty rough.  I hope it does not pass.

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1 hour ago, Faith-manor said:

Not really. Historically, once one faction of our government has proposed debt spending for x,y, and z, another faction has proposed "if we don't spend it there, we will spend it here", and everyone seems to think that is a good idea. Sigh.

So once anyone has proposed anything, ever, it's already too late?  There's no point even trying to make prudent choices?

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2 hours ago, Condessa said:

I think maybe so, but I am not certain I am understanding you correctly.  Most parts of our country don't have a shortage of healthcare facilities, providers, and treatments, so I am assuming by "more health care" you mean more universal ease of access to healthcare.  Is that right? 

I imagine that could be done either by targeting help affording care to the lower-middle class demographic that most struggles to afford care, or by lowering healthcare prices in general, which latter sounds like what you're suggesting.

 

I agree that this is the right goal, but feel that we need to exercise caution that the solutions we enact to lower healthcare costs don't inadvertently remove some of the incentives for the great medical innovation in this country.  The twelve-year monopolies granted by the government to companies that develop new medications create crazy high drug prices for those years, it's true--but they're high prices for drugs that exist.  

It's awful that people can't get the best treatment because of the astronomical prices, but removing a significant portion of the funding for the drug development industry would mean far fewer new drugs developed.  My kid is two weeks into a new chemo med on drug trial.  When we asked if we could pay for it out of pocket if he didn't get it on the trial and we couldn't get insurance to pay, they said, "only if you are literally millionaires".  And yet, without the financial incentives for developing new drugs, no one would have the new, better chemo, because it wouldn't exist.  I would way rather see the government fund patients' access to new, expensive drugs still under monopoly than remove the monopoly incentive.  Alternatively, I suppose the government could give financial incentives directly to companies that develop new meds--but that would be far more expensive, because they would be paying all of the financial reward instead of covering it for those patients who weren't able to get it through trial or insurance.

 

ETA: I do think that the ways to extend those drug monopolies should be eliminated.  The incentive of the 12-year monopoly is already huge, and there is too much potential for abuse in the extensions (like with epipens).

Research has a cost outside of care. There are different ways to fund that. Patents is one of those ways, but that also means monopoly power on lifesaving drugs like insulin. There are other ideas to continue to promote research without long patents. 

I am also talking about simply delivering care. In my state there were ads on the radio because two hospitals were vying for the ability to be ALLOWED to build more rooms. Is that a good use of dollars?  I actually had an argument with a nurse (a friendly one as she is a close friend) as she tried to explain health care was different. The hospital explains it to them, that they tried to keep costs down by not allowing hospitals to overbuild so they wouldn't have to charge more to other patients to cover the empty room. I wanted to slam my head through the wall. The only way that is possible is if they have a complete monopoly and their is zero free market.

Prices are a direct result of having little competition. If you restrict supply and pour in subsidies mix it up with third party payments and obscure price discrimination and it is a given (unless magically everyone suddenly becomes healthy) that prices will shoot through the roof regardless of research costs. I don't know how in the world they wouldn't.

 

Edited to add, Congress is directly responsible for the number of residencies available. These residencies are funded by Medicare and the number of slots has NOT changed since 1997 despite a growing and aging population. Congress is directly responsible for people not being able to become doctors. It is a huge bottleneck. I don't know how they got tied together or why they can't be privately funded. The more you learn the crazier it gets.

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39 minutes ago, frogger said:

Research has a cost outside of care. There are different ways to fund that. Patents is one of those ways, but that also means monopoly power on lifesaving drugs like insulin. There are other ideas to continue to promote research without long patents. 

I am also talking about simply delivering care. In my state there were ads on the radio because two hospitals were vying for the ability to be ALLOWED to build more rooms. Is that a good use of dollars?  I actually had an argument with a nurse (a friendly one as she is a close friend) as she tried to explain health care was different. The hospital explains it to them, that they tried to keep costs down by not allowing hospitals to overbuild so they wouldn't have to charge more to other patients to cover the empty room. I wanted to slam my head through the wall. The only way that is possible is if they have a complete monopoly and their is zero free market.

Prices are a direct result of having little competition. If you restrict supply and pour in subsidies mix it up with third party payments and obscure price discrimination and it is a given (unless magically everyone suddenly becomes healthy) that prices will shoot through the roof regardless of research costs. I don't know how in the world they wouldn't.

 

Edited to add, Congress is directly responsible for the number of residencies available. These residencies are funded by Medicare and the number of slots has NOT changed since 1997 despite a growing and aging population. Congress is directly responsible for people not being able to become doctors. It is a huge bottleneck. I don't know how they got tied together or why they can't be privately funded. The more you learn the crazier it gets.

Given that about 20% (with the majority being non US citizens) of US residency slots are filled by graduates of foreign medical schools, I don’t think it’s the only bottleneck to having an adequate number of doctors, although it is likely the most important factor. We are sorely lacking in medical school slots in this country, relative to population. And besides denying opportunities to our own young people, it also has a broader detrimental effect due to the brain drain for other countries. State medical schools vary widely in the ratio of slots to population. And some of the most prestigious medical schools have ridiculously small entering classes. But it definitely keeps their acceptance rates low.

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12 minutes ago, Tanaqui said:

Maybe it's just me, but I kinda think all this game-playing when it comes to taxes is part of the problem. Here's a novel idea - why don't we all just pay the tax bill?

How about a flat tax, to reflect the fact that we all benefit from tax-funded projects?  That would be nice and simple.  Folks who couldn't pay in cash could provide hours of service in public works.  🙂

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18 minutes ago, Tanaqui said:

Maybe it's just me, but I kinda think all this game-playing when it comes to taxes is part of the problem. Here's a novel idea - why don't we all just pay the tax bill?

We should simplify the tax code to make this happen. Once again I think you could get bipartisan support (at least from the public) for making things simpler. The more exclusions and tax breaks given out, the higher the tax rates need to be to make up for it. This means someone who doesn't use them will overpay compared to what they are expected. 

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18 minutes ago, SKL said:

How about a flat tax, to reflect the fact that we all benefit from tax-funded projects?  That would be nice and simple.  Folks who couldn't pay in cash could provide hours of service in public works.  🙂

There is nothing more or less complicated about a flat versus a progressive tax system. The complications come from all of the exclusions, deductions, loopholes, etc. Most low and middle income people don’t have the vast opportunities afforded to the upper middle class and wealthy to shield income from taxation or have it taxed at lower rates (e.g. long term capital gains). And since most states have regressive tax systems, the progressive federal system helps to alleviate some of the inequity.

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3 minutes ago, Frances said:

There is nothing more or less complicated about a flat versus a progressive tax system. The complications come from all of the exclusions, deductions, loopholes, etc. Most low and middle income people don’t have the vast opportunities afforded to the upper middle class and wealthy to shield income from taxation or have it taxed at lower rates (e.g. long term capital gains). And since most states have regressive tax systems, the progressive federal system helps to alleviate some of the inequity.

I know, I'm a tax professional.  I was being tongue in cheek.  There is nothing simple about "just pay the tax."

There's a reason for each of those "loopholes."  Like the child tax credit for example.  However many "loopholes" there are, these were all voted in by Congress based on some "good reason."  And I actually agree with most of them.

I pay a huge % of my income in taxes.  Somehow or other, I always miss the "loopholes" but not the rate hikes.  😛  They even took away my state/local tax deduction, as if I deliberately pay state taxes just so I can save a fraction of it when I pay federal tax.  It reminds me of the time my health insurance tried to deny my colonoscopy bill because a colonoscopy under age 50 is "elective."

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37 minutes ago, SKL said:

How about a flat tax, to reflect the fact that we all benefit from tax-funded projects?  That would be nice and simple.  Folks who couldn't pay in cash could provide hours of service in public works.  🙂

When you use the term "flat tax" are you referring to everyone paying the same percentage--such as everyone pays 20% of their income?

Or, are you referring to everyone pays the same tax--such as everyone pays $5000 and if they don't have $5000 then they provide service?  

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4 minutes ago, SKL said:

I know, I'm a tax professional.  I was being tongue in cheek.  There is nothing simple about "just pay the tax."

There's a reason for each of those "loopholes."  Like the child tax credit for example.  However many "loopholes" there are, these were all voted in by Congress based on some "good reason."  And I actually agree with most of them.

I pay a huge % of my income in taxes.  Somehow or other, I always miss the "loopholes" but not the rate hikes.  😛  They even took away my state/local tax deduction, as if I deliberately pay state taxes just so I can save a fraction of it when I pay federal tax.  It reminds me of the time my health insurance tried to deny my colonoscopy bill because a colonoscopy under age 50 is "elective."

Nothing says fun like a colonoscopy.  All the cool kids are doing it.  🤪

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10 hours ago, HeartString said:

I'm always curious about this argument.  Isn't college free or nearly so in many other countries?  Are they having that issue? Are American's a uniquely lazy bunch?  This article says at least 7 other countries offer free college.  I'm genuinely curious.   

I know we have some Australians on this board, and I see that college is free at point of service for you guys, then paid back based on income.  How's that working out?

https://www.businessinsider.com/countries-with-free-higher-education-no-tuition-college

 

https://www.nytimes.com/roomfordebate/2013/07/09/study-now-pay-later/australian-college-plan-has-helped-students-at-a-cost

 

 

In those countries, students don't pay for tuition (or pay very little), but it is sink-or-swim.  They do not have the massive support systems and safety nets that we provide in US systems.  Providing those systems in the US costs a lot of money.  It also allows for some students to stay in school for a lot longer in the US than they would in other countries.  

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4 minutes ago, Bootsie said:

In those countries, students don't pay for tuition (or pay very little), but it is sink-or-swim.  They do not have the massive support systems and safety nets that we provide in US systems.  Providing those systems in the US costs a lot of money.  It also allows for some students to stay in school for a lot longer in the US than they would in other countries.  

I’m genuinely curious because I have no idea what you mean here.  What safety nets are being given to American students?  Kids who don’t finish college get debt and that’s all as far as I can tell.  

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1 minute ago, HeartString said:

I’m genuinely curious because I have no idea what you mean here.  What safety nets are being given to American students?  

Tutoring services, writing labs, remedial classes, advising, counseling, liberal policies regarding dropping classes and taking them multiple times, mentoring services for students who are on academic probation would be some examples

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1 minute ago, Bootsie said:

Tutoring services, writing labs, remedial classes, advising, counseling, liberal policies regarding dropping classes and taking them multiple times, mentoring services for students who are on academic probation would be some examples

Someone with experience with other countries will have to chime in because I have no idea about most of that.  I imagine other “peer” countries don’t need as much remediation in college because their k-12 type schools prepare kids better than ours do.   I’m sure there isn’t a complete absence of academic advising in other countries either, the students must have the necessary course of study communicated to them somehow. Advising is a joke in my experience.    
I would be interested in the tutoring and labs and other helps though.  I’d love to hear experiences from other countries.  

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1 minute ago, HeartString said:

Someone with experience with other countries will have to chime in because I have no idea about most of that.  I imagine other “peer” countries don’t need as much remediation in college because their k-12 type schools prepare kids better than ours do.   I’m sure there isn’t a complete absence of academic advising in other countries either, the students must have the necessary course of study communicated to them somehow. Advising is a joke in my experience.    
I would be interested in the tutoring and labs and other helps though.  I’d love to hear experiences from other countries.  

DD is attending a university in Europe--DH and I have both taught outside of the US and have a number of colleagues at universities outside of the US.  Our experiences have been it is "sink-or-swim" in other countries.  The course of study is communicated in the university materials; students are expected to be able to read, figure out the requirements, and meet them; they do not have to meet one-on-one with an advisor who double checks to make sure they register for the correct class; it is the student's responsibility to do that.  

There is a much greater amount of hand-holding in the US universities where I have been.  There is a lot of time and a lot of resources spent on "how can we increase graduation rates"; in other countries I have experienced a "if they fail out, they fail out" attitude. 

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57 minutes ago, SKL said:

I know, I'm a tax professional.  I was being tongue in cheek.  There is nothing simple about "just pay the tax."

There's a reason for each of those "loopholes."  Like the child tax credit for example.  However many "loopholes" there are, these were all voted in by Congress based on some "good reason."  And I actually agree with most of them.

I pay a huge % of my income in taxes.  Somehow or other, I always miss the "loopholes" but not the rate hikes.  😛  They even took away my state/local tax deduction, as if I deliberately pay state taxes just so I can save a fraction of it when I pay federal tax.  It reminds me of the time my health insurance tried to deny my colonoscopy bill because a colonoscopy under age 50 is "elective."

You get no SALT deduction? That must be some special circumstance I missed outside of the $10k cap from the last administration’s tax plan. Unless you mean the new, higher standard deduction became a better deal for you with the SALT cap. 
We also pay a significant portion of our income in taxes, especially living in a high personal income tax state. But even as wage earners, it’s relatively straightforward for us to shield, if desired, more income from taxation than the average US family makes, through pre-tax retirement contributions, insurance premiums, health and dependent flexible spending accounts, etc. Now there might be reasons why we don’t maximize this benefit, such as preferring after tax Roth contributions. But the more income you have the more you can take full advantage of such deductions and exclusions. 

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6 minutes ago, Bootsie said:

DD is attending a university in Europe--DH and I have both taught outside of the US and have a number of colleagues at universities outside of the US.  Our experiences have been it is "sink-or-swim" in other countries.  The course of study is communicated in the university materials; students are expected to be able to read, figure out the requirements, and meet them; they do not have to meet one-on-one with an advisor who double checks to make sure they register for the correct class; it is the student's responsibility to do that.  

There is a much greater amount of hand-holding in the US universities where I have been.  There is a lot of time and a lot of resources spent on "how can we increase graduation rates"; in other countries I have experienced a "if they fail out, they fail out" attitude. 

I agree. Several of my colleagues who grew up and attended university in other countries say they also did not have distribution requirements as most US colleges do, as that is more for high school. For them, the major they were admitted to determined almost their entire college coursework, there were very few choices. So it is relatively straightforward with no real need for advising. It actually sounded more similar to professional grad programs here in the US, with an entering class moving through basically the same course sequence together.

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52 minutes ago, Bootsie said:

DD is attending a university in Europe--DH and I have both taught outside of the US and have a number of colleagues at universities outside of the US.  Our experiences have been it is "sink-or-swim" in other countries.  The course of study is communicated in the university materials; students are expected to be able to read, figure out the requirements, and meet them; they do not have to meet one-on-one with an advisor who double checks to make sure they register for the correct class; it is the student's responsibility to do that.  

There is a much greater amount of hand-holding in the US universities where I have been.  There is a lot of time and a lot of resources spent on "how can we increase graduation rates"; in other countries I have experienced a "if they fail out, they fail out" attitude. 

Since the advising at my college was a complete waste of time, I'd like a refund on my student loans.  I had to figure out which classes to register for and all of that mostly for myself and my husband with little input outside of a rubber stamp from the advising department.  When I made mistakes the advising department never caught it. I just figured it out.   Seems like eliminating that would be one place for US colleges to save money, since it's pretty much useless.

 

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4 hours ago, Condessa said:

So once anyone has proposed anything, ever, it's already too late?  There's no point even trying to make prudent choices?

Historically, yes. The feds like to spend money and once they propose to do it, it is rarely rolled back. I'd rather the debt get used to fund help for families than more weapons. But then, so don't see this as unprudent choices so since we don't have the same worldview on these types of issues, we are not likely to agree either.

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2 hours ago, HeartString said:

I’m genuinely curious because I have no idea what you mean here.  What safety nets are being given to American students?  Kids who don’t finish college get debt and that’s all as far as I can tell.  

For another example, a number of universities in my state are under great pressure to increase graduation rates.  Faculty are under mandates, for example, not to have more than 15% of their students withdraw or receive a D or F in the course.  I know professors who have more than 15% of their class never show up for a class before they withdraw (so it can't be the professor who has had no contact with the student's fault) or who miss one or more major examinations in the class because they just don't show up.  But, some of those students are still supposed to receive a "C" or better in the class so that the professor can meet the mandate. 

My colleagues in other countries can't believe this; university is free--but you have to show up and do the work or you fail out; it isn't the professor's job to make sure you pass.  So students who aren't serious don't just keep on signing up semester after semester.   

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10 minutes ago, Bootsie said:

For another example, a number of universities in my state are under great pressure to increase graduation rates.  Faculty are under mandates, for example, not to have more than 15% of their students withdraw or receive a D or F in the course.  I know professors who have more than 15% of their class never show up for a class before they withdraw (so it can't be the professor who has had no contact with the student's fault) or who miss one or more major examinations in the class because they just don't show up.  But, some of those students are still supposed to receive a "C" or better in the class so that the professor can meet the mandate. 

My colleagues in other countries can't believe this; university is free--but you have to show up and do the work or you fail out; it isn't the professor's job to make sure you pass.  So students who aren't serious don't just keep on signing up semester after semester.   

This I can agree with for sure.  I'm taking colleges classes now to finish my degree.  The number of students who don't bother to do the work or even ask question until the end is ridiculous.   I had a friend that interviewed for a job at a for profit college years ago and was told she wouldn't be allowed to fail anyone.  I've thought about that often with regards to regular colleges.  They aren't profit driven necessarily, but they are becoming more and more like that.  They get less and less state funding so they rely more and more on tuition, which means they can't turn away "customers".

I do have a simple explanation for some of the 15% that don't attend class before they withdraw.  Way back when I was on scholarship right out of high school, I had to take a minimum of 12 hours each semester.  My first or second semester I  registered for 12 hours and the school dropped one just a few days before the semester started.  I checked and what the school expected me to do was to scramble  around and find a replacement that fit my schedule or I would lose my scholarship.  After that I hedged every semester by registering for more classes than I planned to take and would drop one during the 100%  drop period so I wouldn't have to scramble if the school dropped a class I needed.  I figure that was normal.

 

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4 minutes ago, HeartString said:

This I can agree with for sure.  I'm taking colleges classes now to finish my degree.  The number of students who don't bother to do the work or even ask question until the end is ridiculous.   I had a friend that interviewed for a job at a for profit college years ago and was told she wouldn't be allowed to fail anyone.  I've thought about that often with regards to regular colleges.  They aren't profit driven necessarily, but they are becoming more and more like that.  They get less and less state funding so they rely more and more on tuition, which means they can't turn away "customers".

I do have a simple explanation for some of the 15% that don't attend class before they withdraw.  Way back when I was on scholarship right out of high school, I had to take a minimum of 12 hours each semester.  My first or second semester I  registered for 12 hours and the school dropped one just a few days before the semester started.  I checked and what the school expected me to do was to scramble  around and find a replacement that fit my schedule or I would lose my scholarship.  After that I hedged every semester by registering for more classes than I planned to take and would drop one during the 100%  drop period so I wouldn't have to scramble if the school dropped a class I needed.  I figure that was normal.

 

It isn't simply that the state schools are having to rely on tuition dollars, at least in Texas they are being threatened with losing state dollars if their "pass" rates are not high enough.  I taught at a state school at which the president made the announcement at freshman orientation "We admitted you; we will graduate you."  The message was it was up to the school and faculty to make sure that even if the student wasn't prepared or didn't do the work they would graduate.  My colleagues in other countries experience students being told "We admitted you; it's free; all of the rest is up to you."

The state went to a policy if students take the same class more than three times they have to pay an out-of-state tuition rate.  That is not a student doing what you described of taking a class and dropping the 100% drop period--these are students who are remaining in the class beyond that date.  That policy impacted a large number of students.  

Admitting all students, not holding them accountable for passing classes, and having taxpayers pay the bill is a disastrous combination.  In countries I have seen it work to have free university education is that either students are held accountable for making sure that they pass if they want to remain in school and/or a highly selective admission policy is used.  

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9 hours ago, Condessa said:

I know how awful it is to have to deal with the insurance companies.  But at least if the insurance company says they won't pay for my son's necessary medical care, he can still get it.  I can still take him in to the hospital, get the care, and then beg, borrow, steal, take on life-changing debt, whatever, to pay for the care he needs.  These parents can't.  

I don’t know the situation of the children you mention, and things may be messed up because of Covid, but there is private  health care in the UK and it’s also possible to have health insurance. 
It’s more difficult to discuss the benefits of universal healthcare when considering unique individual situations. I worked in several large London hospitals and then came to work in a hospital in Dallas for a year. A dr I worked with there told us that she had just been on a floor of 21 patients and they had 19 legs between them. I was shocked at the number of patients with lower limb amputations I came across, mostly diabetics. In the UK there is primary care available to diabetics and I never saw the same rate of amputations there. So, while I know that there are problems with the universal healthcare system, especially now after the damage of Covid, there are many basic problems that it definitely helps with. I also volunteered at a free clinic near where I live here in the US, and the lack of access to care was shocking.

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14 minutes ago, Bootsie said:

It isn't simply that the state schools are having to rely on tuition dollars, at least in Texas they are being threatened with losing state dollars if their "pass" rates are not high enough.  I taught at a state school at which the president made the announcement at freshman orientation "We admitted you; we will graduate you."  The message was it was up to the school and faculty to make sure that even if the student wasn't prepared or didn't do the work they would graduate.  My colleagues in other countries experience students being told "We admitted you; it's free; all of the rest is up to you."

The state went to a policy if students take the same class more than three times they have to pay an out-of-state tuition rate.  That is not a student doing what you described of taking a class and dropping the 100% drop period--these are students who are remaining in the class beyond that date.  That policy impacted a large number of students.  

Admitting all students, not holding them accountable for passing classes, and having taxpayers pay the bill is a disastrous combination.  In countries I have seen it work to have free university education is that either students are held accountable for making sure that they pass if they want to remain in school and/or a highly selective admission policy is used.  

Thats why I said some.  It happened to me last semester so it was on my mind.  That was due to a mistake my advisor didn't catch, which added a semester to my graduation.  So glad I'm paying extra for that benefit.  

 

It does make sense me to that countries with free college don't bother to hand hold.  If those kids drop out no harm, no foul, they don't get the degree.  People in the US that drop out have thousands in debt and no degree to get the jobs that increasingly require a degree even though they didn't use to.

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3 hours ago, Bootsie said:

they do not have to meet one-on-one with an advisor who double checks to make sure they register for the correct class; it is the student's responsibility to do that.  

There is a much greater amount of hand-holding in the US universities where I have been.  There is a lot of time and a lot of resources spent on "how can we increase graduation rates"; in other countries I have experienced a "if they fail out, they fail out" attitude. 

Do they really do this at many American universities?  They certainly didn't at mine.

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2 hours ago, Faith-manor said:

Historically, yes. The feds like to spend money and once they propose to do it, it is rarely rolled back. I'd rather the debt get used to fund help for families than more weapons. But then, so don't see this as unprudent choices so since we don't have the same worldview on these types of issues, we are not likely to agree either.

Yeah, I see borrowing trillions of dollars we don't have as imprudent, no matter how great the programs sound.  

You can go a long time taking out a new credit card every time your debt is due, but at some point this ever-mounting debt can't be pushed off any longer, and then it will swallow you.  The attitude of, "oh, well, this is what we did before, so there's no point ever trying to do anything different" is a recipe for disaster.

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Correct me if I'm wrong, but don't countries with free or very low cost higher education generally have education tracking at much earlier ages?  And then only the top track gets a chance to compete for those free university spots.  It wouldn't be so hard for the US to afford free college tuition if we were only offering it to the top something-percent of students, but that's not something the US would ever support.

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Government debt is different from personal debt, though - especially when the government is that of the USA. It's like they say - when the little guy owes the big guy, the little guy has problems. When the big guy owes the little guy, the little guy has problems.

The USA is the big guy! We're the third most populous nation in the world, I believe we have more people than the post-Brexit EU, and our GDP is the largest by quite a margin.

Which brings me to point two. For an individual person, a trillion dollars is an absolutely inconceivable amount of money. I'd call it "staggering", but that hardly describes it at all. For the US government - well, it's not exactly chump change, but it's just a day's work. You know, a trillion here, a trillion there - sooner or later you're talking about real money, that sort of thing.

Since you're talking about borrowing on your credit card, here's an analogy. Suppose you borrow money on your credit card to go to school so you can earn more money. Then that debt is "good". If this national debt helps citizens be more productive, then the GDP can only go up and tax revenues can only increase. That debt is therefore "good", because it's actually helping everybody get richer.

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31 minutes ago, Condessa said:

Yeah, I see borrowing trillions of dollars we don't have as imprudent, no matter how great the programs sound.  

You can go a long time taking out a new credit card every time your debt is due, but at some point this ever-mounting debt can't be pushed off any longer, and then it will swallow you.  The attitude of, "oh, well, this is what we did before, so there's no point ever trying to do anything different" is a recipe for disaster.

And, if you want to see what the amount of debt that is already outstanding is, just look at the chart below.  It is 28,000,000 million--that is $28 trillion--that is approximately $85,000 per person (man, woman, and child).  Because all of those people are not taxpayers, that works out to over $225,000 per taxpayer.  

That also means the US government is paying about $525 billion in taxes each year--with interest rates at unusually low levels.  If the average interest rate on the debt rises to only 3.5%--in line with an average rate (not anywhere near the highest they have been)  that will be $1 TRILLION each year on interest alone.  

image.thumb.png.f6eeb7c26ea0c998facefa27804666b0.png

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9 minutes ago, Tanaqui said:

Government debt is different from personal debt, though - especially when the government is that of the USA. It's like they say - when the little guy owes the big guy, the little guy has problems. When the big guy owes the little guy, the little guy has problems.

The USA is the big guy! We're the third most populous nation in the world, I believe we have more people than the post-Brexit EU, and our GDP is the largest by quite a margin.

Which brings me to point two. For an individual person, a trillion dollars is an absolutely inconceivable amount of money. I'd call it "staggering", but that hardly describes it at all. For the US government - well, it's not exactly chump change, but it's just a day's work. You know, a trillion here, a trillion there - sooner or later you're talking about real money, that sort of thing.

Since you're talking about borrowing on your credit card, here's an analogy. Suppose you borrow money on your credit card to go to school so you can earn more money. Then that debt is "good". If this national debt helps citizens be more productive, then the GDP can only go up and tax revenues can only increase. That debt is therefore "good", because it's actually helping everybody get richer.

I wouldn't consider $1 trillion dollars just a day's work--even for the US govt.  US GDP is about $22 trillion.  So, $1 trillion is about 16 days of the total value of every American's work.  

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1 hour ago, Condessa said:

Do they really do this at many American universities?  They certainly didn't at mine.

In addition to regular advising, many schools have targeted programs to help certain groups of students to graduate and the amount of support can be pretty comprehensive. The range of educational, family, and financial backgrounds students come to university from, even at very selective schools, is so wide in the US that some students would have a very difficult time graduating without extra support. On the other hand, while in grad school I worked for such programs that were very poorly targeted and generally missed serving the students who really needed them.

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26 minutes ago, Condessa said:

Correct me if I'm wrong, but don't countries with free or very low cost higher education generally have education tracking at much earlier ages?  And then only the top track gets a chance to compete for those free university spots.  It wouldn't be so hard for the US to afford free college tuition if we were only offering it to the top something-percent of students, but that's not something the US would ever support.

Yes, this is generally true, although there are alternative paths in some countries. That’s why I think we would have to make a choice here in the US between free and the almost open admission policies at many US colleges. But I also think vastly improving our technical education and apprenticeship opportunities could go a long way to improving things.

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1 hour ago, Condessa said:

Yeah, I see borrowing trillions of dollars we don't have as imprudent, no matter how great the programs sound.  

You can go a long time taking out a new credit card every time your debt is due, but at some point this ever-mounting debt can't be pushed off any longer, and then it will swallow you.  The attitude of, "oh, well, this is what we did before, so there's no point ever trying to do anything different" is a recipe for disaster.

The problem is that most politicians now only seem concerned about it when the other party is in power. They are fine with increasing debt when it is being used for their priorities, but adamantly opposed to it when it is funding the ideas of the opposing party.

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44 minutes ago, Tanaqui said:

Government debt is different from personal debt, though - especially when the government is that of the USA. It's like they say - when the little guy owes the big guy, the little guy has problems. When the big guy owes the little guy, the little guy has problems.

The USA is the big guy! We're the third most populous nation in the world, I believe we have more people than the post-Brexit EU, and our GDP is the largest by quite a margin.

Which brings me to point two. For an individual person, a trillion dollars is an absolutely inconceivable amount of money. I'd call it "staggering", but that hardly describes it at all. For the US government - well, it's not exactly chump change, but it's just a day's work. You know, a trillion here, a trillion there - sooner or later you're talking about real money, that sort of thing.

Since you're talking about borrowing on your credit card, here's an analogy. Suppose you borrow money on your credit card to go to school so you can earn more money. Then that debt is "good". If this national debt helps citizens be more productive, then the GDP can only go up and tax revenues can only increase. That debt is therefore "good", because it's actually helping everybody get richer.

Not really.

If interest rates go up, it will be painful.

If people worry they won't get paid they will quite loaning funds, unless you think the gov't should be able to force you to loan it money this can be a problem. You think China will appreciate the US defaulting?

We can also inflate our way out of debt but that takes a long time unless unless you want to destroy the economy. The nice thing is that it isn't just American's who will pay that unofficial tax. Devaluing our currency is a tax on everyone who happens to be holding US currency at the time. Of course, if there is a lot of inflation, people in other countries will do their darndest to get rid of it which will make things worse. Since many foreign powers hold American cash this won't be well liked either and those who saved their whole life for retirement? Well, they'll be screwed. You will have just stolen a giant chunk of the value of their savings.

I'd love to say that spending will boost GDP at times but right now I'm mostly seeing problems on the supply side and not the demand side so I doubt it is doing much. I'd be surprised if there was much of a fiscal multiplier at all. 

Also, if a lot of this money is just wasted. People are the ones who grow GDP through hard work and inguenuity. Dumping money on them so they can choose to be less productive will not grow GDP. 

I do think that education can produce growth. I think the Morrill Land Grant Act was a big factor to propelling the USA to it's current status. This bill though, well if you like household analogies, it's like giving your kids all huge allowances cause you are broke. A few might do something useful with it and help themselves but a lot will just be wasted. Not just the money going to individuals but to big companies too. 

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2 hours ago, hippymamato3 said:

They can when they put in "household income" rather than individual.

Citibank allows me to do that for their Costco Visa card but not for any other Citibank credit card. Wells Fargo does not allow me to do that for any credit card. American Express does not allow me to use household income either. 

My friends told me that in the early 2000s, stores like Gap, The Children’s Place, Kohls, Mervyns, were willing to give store credit cards based on household income. 

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5 minutes ago, Arcadia said:

Citibank allows me to do that for their Costco Visa card but not for any other Citibank credit card. Wells Fargo does not allow me to do that for any credit card. American Express does not allow me to use household income either. 

My friends told me that in the early 2000s, stores like Gap, The Children’s Place, Kohls, Mervyns, were willing to give store credit cards based on household income. 

Interesting. I haven't applied for a new card for about 15 years but it was easy for me to get a Citibank Diamond and I had gotten a Discover card before that with no income. My Fico score is above 800. I wonder if it changed in the 08 recession. It certainly can't be due to divorce rates since they are going down. 

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19 minutes ago, Arcadia said:

Citibank allows me to do that for their Costco Visa card but not for any other Citibank credit card. Wells Fargo does not allow me to do that for any credit card. American Express does not allow me to use household income either. 

My friends told me that in the early 2000s, stores like Gap, The Children’s Place, Kohls, Mervyns, were willing to give store credit cards based on household income. 

I just looked at several credit card applications, including Citibank, and each one has a note where total income is requested that says if you are 21 years old or older you may include income from others that you can reasonably access to pay bills.  

Is there something about state laws where you are that would make it where you do not meet the reasonable access to household income?

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7 minutes ago, Bootsie said:

I just looked at several credit card applications, including Citibank, and each one has a note where total income is requested that says if you are 21 years old or older you may include income from others that you can reasonably access to pay bills.  

I can list household income but that doesn’t mean that the bank has to issue me a credit card. My FICO score was in the 600s until I have my own secured credit card. Now with the secured credit card and the Costco Visa card, my FICO is about 720. We relocated to the states in 2005 and received our green card in 2007. I have never worked in the states. My husband’s first credit card is with Citibank because that is where he direct deposit his pay so they didn’t need a proof of income to approve even though he has no credit history. 

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Also, if a lot of this money is just wasted. People are the ones who grow GDP through hard work and inguenuity. Dumping money on them so they can choose to be less productive will not grow GDP. 

All the evidence suggests that when people who aren't already wealthy get money "dumped on them" they don't "choose to be less productive" - they spend that money, and invest in their futures.

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On 4/29/2021 at 6:10 PM, BlsdMama said:

So I admit we had this conversation today... so the value of an invested and actively engage mother surpasses a daycare or preschool worker, paid too low of a wage,  is incredibly valuable. I don’t understand why so many choose two incomes when it isn’t value added? I think I’m missing something.  Medical insurance?

Yes, medical insurance was it for us. 
I paid most of what I made for childcare for two kids but I brought in healthcare. It never occurred to me that anybody owed me free childcare. It wasn’t easy. We survived. We managed to get it through DH, but we drive 1.5 hours to get to the doctor with DH’s healthcare. 

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13 hours ago, WildflowerMom said:

Oh absolutely.  And you and I probably agree way more than disagree about this.  I get emotionally charged when insurance is mentioned because my kid has 6 years until he turns the dreaded 26 and then who the hell knows what happens?   He has a learning disability.  He's not going to school to be a doctor or lawyer, so 🤷🏻‍♀️

on another note, I'd urge anyone interested to look up how much insulin prices have increased just recently.   Then google how much it costs to produce.   Then google what patients in other countries pay.    I'd post links, but someone will attack it for being too left or too right winged, so why bother.  

This would have been my priority. 
 

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