When the government ‘cuts’ education funding, or ‘guts’ health care funding, people automatically assume that it’s a bad thing. That it will translate to higher costs for students, and a higher cost for people who want affordable health care.
However, the reality is that the exact opposite is usually true. The more the government funds (read: subsidizes) education, health care and even home ownership, the more the people have to pay.
Update: Economist Arnold Kling links to the article on his blog and refers to this as ‘freshman economics’.
The amazing thing to me is how this vital economic truth ever appeared on the in the WP. Very unlike them, methinks.
Too bad the folks on Capitol Hill don’t understand the connection Steven Pearlstein lays out so clearly for us.