Ever
wonder why health care and public college tuitions have inflated more
than other economic segments?
As
an example, the last 25 years have seen public college tuition rates
increase 500% compared to overall inflation of 115%.1
Tellingly, private colleges do not share this increase. Public
college tuitions have increased 12% more than private college costs
in the last 10 years.
Similar
trends are seen in the health care cost data. Since Medicare and
Medicaid were implemented in 1965, health care costs have increased
1550% compared to 600% for the CPI.2
A
commonly proposed explanation is that recent decreases in
governmental funding have caused price inflation in these areas,3
however,
analysis of the data show the opposite - that INCREASED government
spending correlates to increased prices, and not vice versa.
This
is to be expected based on historically observed economic behavior –
the more government money that is introduced into a segment of the
economy, the steeper the inflation.
This
is not only a consequence of the insertion of government funding. The
same happens any time the actual market value of currency is altered
by a non-market force. The Federal Reserve's suppression of interest
rates is another example.
Wherever the government funds a segment of the economy, prices will increase faster than the average of all goods and services.
Where
there is easy money, prices will increase. Economics 101. It's that simple.
1
http://inflationdata.com/Inflation/Inflation_Articles/Education_Inflation.asp
2http://www.americanthinker.com/2009/09/understanding_the_cause_of_hea.html
3
http://www.cbsnews.com/8301-505145_162-57517032/why-college-tuition-keeps-rising/
