The article argues that current market borrowing costs are rising independently of the Federal Reserve's policy stance, challenging the assumption that the Fed controls all rates. Evidence shows significant increases in key rates—such as 2-year Treasuries and mortgages—even while the effective federal funds rate remains steady. This divergence occurs because market rates reflect complex factors like inflation expectations, credit risk, and geopolitical volatility, which are outside the central bank's direct control. Policymakers should therefore recognize that sustainable rate moderation requires credible disinflation and disciplined government budgets, rather than relying solely on Fed intervention.
New Cato Study Debunks Decades of Conventional Wisdom on State Funding and Rising Tuition
English Summary
The Cato Institute study refutes the long-held assumption that rising college tuition is a necessary response to state disinvestment in higher education. Analysis of 1980–2025 data shows that, contrary to belief, states have actually increased funding per student over the past decades. Crucially, the report finds a very weak correlation between changes in state funding and subsequent increases in tuition revenue, debunking the notion that tuition rises to offset perceived cuts. Policymakers should note that attempts by states to significantly boost funding merely to lower tuition are economically inefficient, as the return on investment is negligible.
中文摘要
凱托學會（Cato Institute）的研究反駁了長期以來普遍的假設，即大學學費的上升是州政府削減高等教育投資所必須採取的應對措施。根據 1980 年至 2025 年的數據分析顯示，與普遍認知相反，各州在過去幾十年中每位學生獲得的資金實際上有所增加。更重要的是，該報告發現州政府資金變動與學費收入增長之間存在極為微弱的相關性，駁斥了「學費上漲以彌補感知到的削減」這一觀念。政策制定者應注意，如果各州試圖大幅增加資金投入僅為降低學費，從經濟角度來看是低效的，因為其投資回報率可忽略不計。
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