In a world driven by numbers and statistics, it is essential to comprehend the financial implications of major public assistance programs. In this article, we will delve into the vast sums spent on Medicaid, the cost of education, cost of health care, and the expenses incurred through high school on average for each student in the United States.
Through simple calculations, we will gain insights into the significant financial investments involved in these critical sectors. Overall, I am 100% behind investing in children, creating urban sustainability, and improving the productivity of the nation, but the obvious economic flaws outlined below are both eye-opening and shocking.
Medicaid Expenditures
Medicaid is a crucial healthcare program in the United States that provides medical assistance to low-income individuals and families. To understand the scale of investment in this program, we need to calculate the annual cost per participant. According to available data, the total annual USA Medicaid spending was reported to be about $734 billion dollars per year. Dividing this amount by the number of program participants, which is approximately 74 million, we find that each participant is receiving about to $9,918 dollars per year in aid.
High School Student Expenditures
In the realm of K-12 education, the cost of providing quality schooling to students also demands careful consideration. Based on data from 2023, the per-student spending in New York City is projected to reach nearly $38,000.
With this information, we can calculate the approximate expenditure on a single student for their entire high school journey. Over 12 years of high school, each student costs the working taxpayers around $456,000. This figure serves as a reminder of the significant financial resources required to offer comprehensive and effective high school education.
Housing
Each child or family would be able to seek free or subsidized housing in each of the 50 states based on income or immigration status. This cost of public housing per family could be about $15,000 per year per family.
Food
Each family or child has access to SNAP food benefits [i] and free food at their public school.
College Education Costs
As college tuition continues to rise, it is essential to grasp the financial burden borne by students and their families. Let's consider a hypothetical scenario where the number of college students is approximately 19.7 million, and the average tuition per student is set at $20,000 dollars.
By multiplying these two figures, we arrive at a staggering $394 billion dollars. This impressive sum underscores the colossal amount invested in college education annually and highlights the need for accessible and affordable educational opportunities. With COVID hopefully behind us, it is possible that we have proven that e-learning is a cost effective path to a degree. However, the Obama administration was against the survival of taxpaying universities providing these services. [ii]
Nearly 20 million, 19.7 million, students spend about $400 Billion per year on tuition that is $20,000 per year. The College Board's annual "Trends in College Pricing" report indicated that for the 2020-2021 academic year, the average annual cost of tuition and fees for private nonprofit four-year colleges, the average tuition and fees were around $37,650.
The average cost of tuition and fees to attend a ranked public college in state is about 74% less than the average sticker price at a private college. [iii] Total student loan debt now stands at $1.6 trillion with variable interest rates affecting millions. With an annual growth rate of 2% over the past decade, the financial burden of pursuing higher education has become a major concern for students and their families.
As we move forward, it is crucial for policymakers, educators, and citizens to remain conscious of these numbers and work towards creating sustainable and equitable solutions to meet the needs of our society. By prioritizing critical services and making informed decisions based on reliable data, we can ensure a brighter and more prosperous future for all.
Cost Conclusion
Understanding the financial dimensions of vital public programs and educational pursuits allows us to appreciate the scope of investment in crucial sectors. The staggering cost of health care and college education underscores the significance of affordable budgets and planning.
1. To put this in perspective, each child age Kindergarten to Senior in high school receives approximately $141,049 dollars in health benefits in 2020 dollars over 17 years of life.
2. As for College costs, a private, nonprofit university students pay $55,840 per year or $223,360 over 4 years. [iv] 16% of students receive state scholarships and 13% of students receive private scholarships. Approximately 1.58 million scholarships are available to undergraduate and graduate students each year. Only one in eight college students is awarded a scholarship. [v]
3. Over 12 years of high school, each student costs the local government education system around $456,000 dollars per student.
4. (SNAP), formerly known as food stamps. The average monthly benefit for a household is around $125 to $150 per person which is about $2,000 per year per child.
5. Housing - average annual housing cost of $15,000 per household (which is a rough estimate and can vary widely depending on the location and type of housing). [vi] [vii] In the federal budget for fiscal year 2021, approximately $47 billion was allocated for rental assistance and public housing programs. In FY 2023, the Department of Housing and Urban Development (HUD) had $259.74 Billion distributed among its 8 sub-components. [viii]
6. The Heritage Foundation says, “The average poor family with children already receives $65,200 in cash, food, housing, medical care, and educational support from the taxpayer each year.” [ix]
The Total Fee Per Child in Today’s Dollars
To add it all up, a new child added to your community would cost. 1) $141 thousand in health, 2) $456 thousand in education k-12, 3) 255,000 dollars in housing for a family at $15 thousand per year, $34 thousand in SNAP and school food benefits which totals out to a whopping $886,000 dollars.
If you divide $886,000 by 18, you get roughly $47,555. After 18 years of investing $49,222 per year with an 8% return, the future value will be approximately $2,036,036 or 2 Million Dollars per child.
Sustainability and Unsustainable Taxes Versus Costs
The typical American will contribute $532,910 in federal taxes over their lifetime, amounting to approximately 33.23% of their total estimated lifetime earnings ($1,571,244) allocated towards taxes. Nevertheless, the expenses for each child's services from birth to age 18 will surpass that amount. Among all states, New Jersey residents will have the highest lifetime tax payment, estimated at $1,168,919, while those in Wyoming will have the lowest at $338,079. [x]
While the average homeowner will pay about $144,000 dollars in property taxes, the total taxes collected is generally still short of the amount spent on each family per child. [xi] Overall, the costly education, housing, food, and health care schemes seem to be reducing the sustainability of government in the short-term and going forward. [xii]
Generally speaking, in our democracy, most people who are on fixed public assistance with free housing, education, and health care do not feel the dramatic impact of inflation that has crushed the middle class over the last few years. [xiii] In sum, the U.S. credit was just downgraded by Fitch as international experts may now comprehend unsustainable policies. [xiv]
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Commissioner George Mentz JD MBA CILS CWM® is an international lawyer, speaker, educator, tax-economist, and CEO of the GAFM Global Academy of Finance & Management ®. The GAFM is a ESQ accredited graduate body that trains and certifies professionals in 150+ nations under CHEA ACBSP and ISO 21001 standards. Mentz is also an award winning author and graduate law professor of wealth management for a top U.S. law school.
[i] A Quick Guide to SNAP Eligibility and Benefits | Center on Budget and Policy Priorities (cbpp.org)
[ii] Obama pushes for-profit TaxPaying colleges to the brink - POLITICO
[iii] See the Average College Tuition in 2021-2022 (usnews.com)
[iv] Average Cost of College [2023]: Yearly Tuition + Expenses (educationdata.org)
[v] U.S. Scholarship Statistics: The Latest Data, Facts And Costs (searchlogistics.com)
[vi] Housing Choice Voucher Program Section 8 | HUD.gov / U.S. Department of Housing and Urban Development (HUD)
[vii] The cost of affordable housing: Does it pencil out? (urban.org)
[viii] USAspending.gov
[ix] Largest Welfare Increase in U.S. History Will Boost Government Support to $76,400 per Poor Family | The Heritage Foundation
[x] Life of Tax: How Much Tax is Paid Over a Lifetime | Self.
[xi] Average and Median Property Taxes in Every US State (businessinsider.com)
[xii] Inflation and money woes are forcing Americans to delay medical care : Shots - Health News : NPR
[xiii] There's been a change in who inflation hits the hardest (axios.com)
[xiv] US Credit Downgrade Caught White House Staff Flat-Footed | Newsmax.com