Ask ten people and I suspect nine will say health care. If those people are politicians it will be 10 for ten. After all, it’s pretty obvious isn’t it?
Health care inflation is far higher than general inflation. We all know that.
Then there is the other villain, student loans. But in this case we hear very little to nothing about the actual cost of college.
The year I was born the tuition at Harvard was $420 a year. Today tuition is about $45,000 (excluding room and board).
If you apply the CPI inflation to tuition, it should would be $5,949, but it’s $45,000
If you apply medical cost inflation, the tuition would be $17,808, but it’s $45,000.
Should we be asking why?
While we focus on health insurance premiums instead of the price and use of health care, we do the same thing with the cost of college.
Instead of obsessing about student loans while ignoring the variable that create them, we should be asking why college costs what it does and why it takes four years to obtain a degree