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Why do Tuition fees and Car prices keep rising?

             Tuition fees, like cars, are paid for through loans. The loans, if high in number, cause the tuition fees to rise since a major portion of the resources/capital is used to purchase a product/service. As the portion of capital devoted to consumption increases, prices for some consumer products, those usually purchased with loans, go up. 

 

             In any economy, consumer products are supposed to be purchased with the incomes earned by people. In the absence of an increase in the total money supply (money printing), the total net income of the entire population shall be sufficient to purchase the entire production of the country. However, if the money supply is increased, most of the new money is likely to be loaned out to people as consumer loans since profit making opportunities do not arise overnight, and so more capital will have been allocated to consumption than to production. This leads to higher demand and higher prices in all products purchased with those consumer loans. This includes houses, cars, tuition fees etc. Eventually, the tuition fee or the car becomes unaffordable for those who do not take a consumer loan. The true price for a car is a function of the ability of consumers to afford it. So in normal circumstances, the total price for all the cars and tuition and everything else in the country should not be more than the total incomes of all the people. 

This is also one of the reasons why the poor become poorer since the prices for many products rise more in proportion to their income. This trend reverses during a deflationary collapse when the consumer credit is restricted and all the credit dependent products go out of demand. This is the time when the decline in tuition fees, car prices and house prices outpaces the general decline in non durable products, which mostly form the Consumer price index (NYSEARCA:CPI). So any effort to continue or expand consumer loans in the country can only make products more unaffordable for the general population.

So how do we prevent eternally rising tuition prices? By preventing eternal money inflation.