Subsidies to Higher Education as a Stimulus?

The mind wanders when you try to think about how some of these programs might be justified. Subsidies to higher education will obviously help a prime Democratic constituency (note how the Chronicle of Higher Education uses the term "gushed"). But what exactly is the stimulative effect of this even in Keynesian terms? I suppose that some how students will spend a greater percentage of their money then others on average. Of course, even if that is true in terms of how Keynesians define spending, it is nonsensical. To Keynesians, saving is like throwing money into a black hole. To others, we realize that saving means you put the money in the bank. What do banks do with it? They lend it out to someone else who is going to spend it. In any case, here is the article from the Chronicle (note it is a pay site and you won't get anymore than I already show here):

Stimulus Bill Includes Billions of Dollars in Help for Students and Colleges



Students, researchers, and colleges would benefit from new spending and tax breaks included in an $825-billion economic-stimulus plan that Democratic leaders in the U.S. House of Representatives unveiled on Thursday.

Higher-education lobbyists gushed . . .

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Blogger The Right Guy said...

Payback AND seed money?

1/16/2009 7:20 AM  
Blogger Snerd said...

The liberal mind has no difficulty justifying ANYTHING.

1/17/2009 7:37 PM  

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