By Ron Meyer

Published in the Santa Barbara News-Press

Students walking down Del Playa often brag that Isla Vista accounts for 1 percent of America’s alcohol consumption. The U.S. consumes 482,678,000 gallons of alcohol per year, and in order for this urban legend to be true, every student in I.V. would have to drink the equivalent of more than 150 beers per day. That’s impossible, even for UCSB students.

No one knows the exact alcohol consumption for Isla Vista, but it is evident that the bars and liquor stores in this town are not struggling. Students spend thousands of dollars on alcohol.

It makes me wonder if some of the UC Regents and California legislators have been thinking, “Can’t these kids invest a little more in their education and spend a little less money getting wasted?”

California has been able to keep tuition rates low for years by using a heavy dose of taxpayer subsides. In reaction to their own unruly spending and subsequent budget crisis, Sacramento cut UC funding 20 percent, and left the UC Board of Regents scrambling to find a way to keep the schools afloat.

The Regents have decided to raise tuition rates 15 percent for the remainder of the year and 32 percent next year, bringing 2010-11 rates to $10,302. Students obviously don’t like this idea and have since been organizing protests, garnering news coverage across the city and state.

As a college student who fronts the bill for my schooling, I sympathize with the few students at UCSB who are actually paying for college out of their own pockets. This decision is tough on them.

I don’t sympathize with the majority of students — and probably the majority of protesters — who complain about higher tuition, and then go out the next weekend and spend $50 on booze.

Higher education is a privilege, not a right. One student interviewed on a local news station even went so far as to say she believed the government should be paying for more or all of her education, not less.

I’m not sure my generation grasps that in this context the “government” really means the people who fund the government. Education may be a noble and wise investment for the state, but students must realize that this money comes from normal Californian taxpayers. We don’t have a right to other people’s money.

On second thought, I’m not sure it’s fair to expect students to understand this concept when Sacramento itself doesn’t get it.

Last Wednesday, the California Legislative Analyst’s Office released a report showing the state’s general fund deficit could reach $20.7 billion. The LAO is expecting a $6.3 billion deficit this fiscal year and a $14.4 billion from 2010 to 2011.

Maybe before we demand that students stop binge drinking, we should tell the government to stop binge spending.

The irony of this situation is that college-aged citizens will be forced to deal with the consequences of both of these bingeing actions: our livers will pay the price for the alcohol and our wallets will be enslaved with future taxes.

Frankly, we students cannot afford to develop an entitlement mentality about education or anything else. We should not expect the government to take care of us when they can barely take care of themselves.

The federal government and the state government have not and probably will not stop spending my generation into debt. This year, students have felt the pain of these irresponsible policies through these tuition hikes; the government spent too much money and had to cut education funding.

Students need to learn how to be self-reliant, and while I’m not saying the government should or will stop funding education, I am suggesting that students should not be mad or surprised when the government fails us.

The first step in becoming self-reliant is managing your personal budget. Yes, that probably means buying less alcohol. UC students should expect more budget cuts in the years ahead unless they are willing to hold their politicians accountable.

We students need to spend less time drinking and more time getting informed and politically active — less money on beer and more money on books.

Instead of blindly asking for more funding, students need to advocate for fiscal responsibility. We shouldn’t expect taxpayer handouts, but we should hold the government accountable when it frivolously spends money. These steps will ensure a strong California government and UC system that will be able to offer affordable tuition rates for years to come.

By Ron Meyer

Published in the Santa Barbara News-Press

California’s chief budget analyst, Mac Taylor, shocked Sacramento legislators last Wednesday when he announced some daunting numbers: California will run a $6.3 billion deficit this year and a $14.6 billion deficit next year. Key players at the state capital are already considering raising taxes.

If California raises taxes, they will continue to chase away the state’s main revenue sources: businesses and the rich.

California’s total per capita taxes are the fourth worst in the country; state and local taxes are the sixth worst; individual tax rates are the fourth worst; sales tax rates are the worst; top individual rates are the fourth worst; and the business rates are the third worst. Who would want to live or own a business here?

Well, California is the most beautiful state in the union. When Oprah Winfrey quit her show last week, she said, “[w]hy would anybody stay [in Chicago]? It’s freezing here and I own a mansion in Montecito.”

There’s no doubt it is gorgeous here, but not even Oprah chooses to pay the taxes. Hollywood tabloids have been reporting that she has wanted to live full-time in Montecito for years, but had been advised to stay in Chicago because of California’s exorbitant tax rates.

Oprah is not alone. Many companies, both large and small, do everything they can to avoid paying California taxes. For some this means hiring savvy lawyers, but for most it means relocating. Some companies can’t afford either and just go out of business.

What many in Sacramento don’t realize is that if they raise taxes, the government will actually get less revenue. Many people support raising taxes on businesses and the rich because they can afford to pay more. Well, the fact is they usually don’t end up paying more at all. They evade the taxes, become less productive, or leave.

Raising taxes not only chases away rich people and businesses, but increased rates could further destabilize our already fragile economy. Small business and middle-class Americans are already struggling enough just to keep above water, and the last thing these folks need is one more expense.

A couple weeks ago I had the opportunity to travel an hour west of Santa Barbara to see Ronald Reagan’s Rancho del Cielo. This is where President Reagan signed the Economic Recovery Tax Act of 1981. Looking into this act and its effects on tax revenue got me thinking: We can boost California’s revenue and the state’s economy if we cut taxes.

People will immediately identify this recommendation with supply-side economics, but don’t get me wrong. Not all taxes are supply-side. Sales taxes and some income taxes are historically revenue-neutral or slightly revenue-negative, meaning that if you decrease the rates, the revenue either stays the same or goes down.

Cuts in business and top individual tax rates are revenue-positive. Whether it was Ronald Reagan’s or JFK’s national tax cuts, or Mayor Rudy Giuliani’s tax cuts for New York City, in almost every case where high business and top individual rates have been cut, the revenue from these taxes has gone up.

To understand why this happens, we should examine the logic behind both tax cuts. First off — as we learned from Oprah — businesses and rich people are less likely to move or avoid taxes when rates are low.

When corporate taxes are lowered, businesses have more money to invest in future ventures — like hiring new employees or buying new machinery — creating more taxable wealth.

Personal tax cuts are often criticized because they usually don’t generate a lot of consumer spending. When we cut taxes for rich people, they usually invest the money in banks, stocks or real estate. These investments go on to make these folks richer (equalling more tax revenue), and they also provide the needed liquidity an economy needs.

When people invest or save money in banks and stocks, it provides small businesses and entrepreneurs access to more capital. More capital means more employees, more machinery, and more land. All three help the economy and bring in additional taxes.

If Sacramento legislators want more money, they need to be counter-intuitive and lower tax rates. Lower tax rates — especially top individual and business rates — would be the stimulus California needs to turn around these droopy unemployment numbers.

It really shouldn’t be difficult politically; most people and business owners certainly won’t complain. Plus, it will keep Oprah in Montecito.

Ron Meyer Jr. is a student at Principia College in St. Louis. He is interning at the News-Press this winter.

Price Controls in the Public Option

There is bi-partisanship on the public option – against it – and it will not pass in the Senate.

Democratic Senators Lieberman, Nelson (NE), the other Nelson (FL), Bayh, Landrieu, Lincoln, and Pryor are not in support of the public option. There are still more Democrats, like the ones from the Dakotas, who are sitting on the fence.

The Democrats need 60 votes for cloture to vote on the bill; the Democrats hold 60 seats, but they’re still nowhere close. After the Republican win in the elections last week, Majority Leader Harry Reid would even struggle to pass this legislation using the rare and controversial method of reconciliation.

The missing link in this debate – the role of price controls – reveals why this bill is failing in the Senate and with the American people. It shows why the public option will lead to a single-payer system, and why a single-payer system would be bad for America.

Rahm Emanuel, the White House Chief of Staff, and Barney Frank, chairman of the House Financial Services Committee, have already admitted that the public option was designed to lead to a single-payer system. However, some liberals are still trying to hoodwink the American people by telling them they can keep their current insurance plans and their doctor.

The fact is – as Democrats will happily admit – this plan is designed to hurt insurance companies and will drive them out of business.

If the government demands that insurance companies cover anyone who applies without charging a higher rate, their costs will go up. Covering individuals with preexisting conditions is logically more expensive than covering a regular insured person. Insurance companies will charge everyone more to make up for these costs, raising everyone else’s rates.

Private insurance rates will go up even further because of the other price controls that the public option will induce into the market. As it is already well-known, Medicare and Medicaid pay doctors at a rate set by the federal government. This rate is set well below what private customers would pay, and in order to break even, doctors charge their private customers more to make up for the lost revenue.

The public option would multiply this practice significantly. Once the government offers a free or heavily subsidized public option, many people would rather take the free insurance over their private plan. Therefore, doctors would be forced to take the public rate from many more customers and would have no choice but to raise their private rates.

Another twist may arise when, in order to keep costs low for the public option, the federal government demands that doctors take even less for their services. In turn, they will raise the private rates even more.

The public option really isn’t an option at all. I suppose in the end you may be able to keep your private insurance – if you’re willing to pay at least two or three times more than you do now. The more likely scenario is that these government-initiated higher costs of private insurance will force us all onto the government plan and drive private insurance out of business.

Once we’re all on the government program, the big problem once again is price controls. If everyone is covered by the federal government, bureaucrats and politicians, just like in our current Medicare/Medicaid system now, would set all the prices for doctors’ services and medicine.

Most politicians believe that doctors and drug companies make too much money. Profit is a four-letter word to these people. Once the politicians control the prices, they will undoubtedly try to purge this “evil.”

This is one reason that government has never been effective at guessing market prices. The government does not know how to allocate resources the way prices do in a free market system. Doctors have high salaries for a reason. Medical school and other training takes time and lots of money. However, many people remain willing to go to medical school because of the financial security the profession offers.

Who in their right mind is going to go to medical school and fork over $100K in tuition (plus what they paid for their undergraduate degree) to make a government salary? We already have a shortage of doctors today, and when the government begins to pay doctors even less, the shortage will worsen and quality will fall. At this point, rationing will be inevitable.

The same is true for pharmaceutical companies. Above and beyond the profit required of them by their shareholders, the risky investment required to do research for new drugs and groundbreaking procedures is not cheap. When the government removes the profit motive for these services, we will see a dramatic fall in medical technology.

This problem will not only hurt Americans: it will affect everyone. No longer will socialized Europe be able to lean on our medical technology. If we, by socializing our system, stop developing medicine, to whom will the world turn?

Free prices create competition, lowering prices and raising quality. Government mandates and price controls create a monopoly, raising costs and lowering quality. Americans are and should be rejecting a government takeover of health-care.