I am very partial to Pachelbel’s Canon in D major. (Click here to play a clip of the song, if you would like to hear it.)

What is your favorite song? Was it the tune or the lyrics (if any) that first drew you to the song?

I have made it no secret that my favorite author is Jane Austen. Who is your favorite author and why??

Should Products Which Contribute to Obesity (Such as Big Macs and Krispy Kreme Donuts) be Taxed?

[Article taken from http://www.balancedpolitics.org/fat_tax.htm]

In a Nutshell

What is your opinion? Should products which contribute to obesity be taxed?

Issue in Brief

What’s up-
During the past five years average public college tuition has increased by a whopping 35% (beating out the 11% achieved by private schools). This increase has outpaced inflation and drawn the attention of lawmakers intent on addressing students’ ability to pay for college and higher education’s ability to rein in costs.

In February 2007, legislation increasing the maximum Pell Grant by $550 to $4,600 per student was passed. Other proposals are in the works to increase the tax-deductibility of higher education, raise other loans and cut interest rates, and raise the limit for Section 529 college-saving accounts whose interest is tax-free. While most agree that equalizing access to higher education is a social boon, critics contend that increasing loans and subsidies without stricter accountability encourages schools to use rising tuitions to pay for flashy student-luring amenities. With federal funding accounting for 24% of all higher education funding (as compared with 10% for K-12 education) many are crying out for colleges and universities to be more transparent with both their spending as well as the preparedness of graduates they produce.

Pros
College graduates make over $1 million dollars more during the course of their lifetime than their peers with only a high school diploma, making college education one of the surest ways to increase standard of living for many citizens. As costs of public and private education increase faster than median family income, a growing number of schools are out of the reach of aspiring students. The Pell Grant increase, which is available to only the neediest students and does not require repayment, offers the lowest-income students the opportunity for a college education. Additional measures to increase the amount of federal loans give many students a necessary boost to afford a wider range of colleges. At the same time, a measure (H.R. 5*) proposes to cut the interest rate of certain need-based loans nearly in half, from 6.5% to 3.8%, between July 2007 and July 2011, making those nasty loan payments easier to surmount.

Cons
The cons fall into three camps— those who believe that college tuition isn’t quite the beast its portrayed as, those who believe that raising loans not only encourages carefree spending in higher education and those who fear that increased loans equals a larger financial hole for students.

As many in higher education point out, not all spending is extravagant. The amount of school-sponsored financial aid—a record $134 billion—is relieving many of the high sticker prices. In 2002-3, roughly 50% of all undergraduates received some form of financial aid—60% if you include undergrads receiving loans. Only 5% of all undergraduates pay the much-advertised high-end sticker price of $33,000 per year. Furthermore, some argue, raising costs is the price needed to stay competitive, as many prospective students and their families equate higher price with better quality.

Others argue that by not addressing the root cause of rising costs, lawmakers are giving universities carte blanche to continue their carefree spending ways. In particular, the Bennett Hypothesis argues that increasing federal loans is accompanied by a parallel tuition increase. Coincidence? Some think not. With schools building luxury dorms to lure students, many wonder whether the best way to keep costs down would be to rein in seemingly extravagant spending.

Lastly some believe that by increasing the amount of loans, students, especially the large number who drop out of college, could put themselves in a bigger financial hole than the current loans would allow.

Your Opinion?
Should Federal loan amounts be increased to help meet the rising tuition costs? Is school sponsored financial aid enough? Will increasing the loan amounts allow universities to increase tuition and spend the money made extravagantly? Will increasing the amount of loans only put a heavier burden on the students when it comes time to pay them back? What do you think?

[Read the entire article at Citizen Joe]

*Measure H.R.5  - College Student Relief Act of 2007 - Amends the Higher Education Act of 1965 to phase-in cuts in the interest rate charged undergraduate student borrowers under the Federal Family Education Loan (FFEL) and Direct Loan (DL) programs, thereby reducing such rate from 6.8% in July 2006 to 3.4% in July 2011.

[Original Article appears on Citizen Joe]

A SPECIAL CASE OF SUPPLY AND DEMAND - OR GREEDY GAS-PUSHERS?

Gas prices occasionally spike in a way that prices for most other things do not. That’s because, as economics professors agree, the supply and demand of gas react to changes in prices less than other items react to changes in price. Usually, if the supply of an item goes down, the price of the item will go up, and so the demand will go down too—that is, some people who would have purchased the item at the original price will say, “No, thanks” at the new price. Because of this increase in price, demand usually shrinks with supply and the two balance out again.

But in the case of gas, the demand to fill tanks won’t budge much when the price goes up. People will still want gas. So the price has to go way, way up to get supply and demand to balance. That skyrocketing price leads to profits. Generally speaking, everyone agrees that some of the increase in gas prices is caused by increased costs of supplying gas and some is caused by increased gas company profits (oil that is bought at pre-shock prices is suddenly being sold at post-shock prices).

Some argue that when everyone is running to the gas pumps after a supply shock, folks in the oil industry take advantage of the frenzy to fill ‘er up by adding a nickel here and a dime there. But others say that oil companies are just charging fair market value for a rare commodity when there is a real risk of shortage. Is the oil industry gouging consumers or is gas simply more expensive?

A House bill, HR 1252, regarding “price gouging” would apply to wholesalers and refiners as well as retailers. Many states already have anti-gouging laws that apply to gas station retailers. (more…)