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Princeton University Alexander
Imagine a system of college education supported by high and growing government spending on elite private universities that mainly educate children of the wealthy and upper-middle class, and low and declining government spending on public universities that educate large numbers of children from the working class and the poor.
You can stop imagining. That's the American system right now.
Government subsidies to elite private universities take the form of tax deductions for people who make charitable contributions to them. In economic terms a tax deduction is the same as government spending. It has to be made up by other taxpayers.
These tax subsidies are on the rise because in recent years a relatively few very rich people have had far more money than they can possibly spend or even give away to their children. So they're donating it to causes they believe in, such as the elite private universities that educated them or that they want their children to attend.
Private university endowments are now around
$550 billion, centered in a handful of prestigious institutions. Harvard's endowment is over $32 billion, followed by Yale at $20.8 billion, Stanford at $18.6 billion, and Princeton at $18.2 billion.
Each of these endowments increased last year by more than $1 billion, and these universities are actively seeking additional support. Last year Harvard launched a capital campaign for another
$6.5 billion.
Because of the charitable tax deduction, the amount of government subsidy to these institutions in the form of tax deductions is about one out of every three dollars contributed.
Comment: No contact with body fluids? It looks like the CDC is growing more concerned about how Ebola is transmitted.