(2006-10-01) Vedder University Economic Development

Richard Vedder claims that increased use of taxes for state College Education subsidizing doesn't provide any Economic Development benefits. Do new appropriations lure only a few new kids to college, and those new entrants are largely academically unqualified? (I suspect the answer is yes). Are large proportions of new appropriations used for non-academic purposes, including funding an overly large university bureaucracy, or for what economists call "economic rent", providing bigger pay raises for employees? (Again, the answer is yes). Does using budget surpluses to reduce tax burdens have more positive economic impact than increasing state spending on universities? These questions are seldom asked in the rush to "invest" new funds in the universities.