Curiosity Over Pride (FYI: To comment, send an e-mail to scifidink@gmail.com)

Wednesday, July 20, 2011

Funny Cartoon

I used to could

"I used to could" is one of Jeff Foxworthy's made-up southern words. As in "Dink, do you remember how to embed images into a blog post?". Well, I used to could. I managed to add the link, anyway.

Monday, July 4, 2011

Strange Days in the World of Educational Finance

It appears, as Jeremy Grantham notes in his most recent missive (1Q 2010), that the Days of Abundant Resources and Falling Prices Are Over Forever.

He is talking, mostly, about the recent apparent paradigm shift in commodity prices. The days of cheap everything is over.

Our obsession with economic growth at all costs is running up against a slight problem in the real world, known to the general public as math. Specifically the feature in math known as compound growth.

Hellasious touches on this with repsect to his various discussions on permagrowth.

The problem is as follows: No compound growth is sustainable.

In terms of debt, this means that no real (non-inflationary) compound growth in debt is sustainable over the long term.

Resources are no longer abundant. Good-bye real compound growth.

What does this have to do with the financing of education? Everything.

The educational finance model permits real compound growth with respect to student loan debt. This is then passed on to colleges and universities in the form of real compound growth in tuition with students taking on the risk of paying this money back.

Put simply, colleges and universities increase tuition faster than inflation. We all know this. Everyone complains about it. But nothing ever happens.

Colleges and Universities use the compound tuition growth model to ratchet up costs, year after placid academic year, with no discernable improvement in anything except massive resort-type facilities for students. However, this idiotic system has never come face to face with a major economic paradigm shift before.

The fuse for the coming major discontinuity in the world of educational finance has been lit.

Let's just wait and see what happens when the now permanent feature of price pressure and shortages of resources hit student loan debt system and the ivory tower.

The Most Fabulous Objects In The World

  • Hitchhiker's Guide To The Universe trilogy
  • Lord of the Rings trilogy
  • Flight of the Conchords
  • Time Bandits

Followers