Zeev - you've got a lot of faith!
"What will happens by hook or by crook is that the educational level of the new generation of workers will increase slowly, to match the requirement of a more educated work force."
There are three parts of the economy where inflation has gone far beyond real rate of inflation, wages, savings, etc.: (1) healthcare, (2) insurance, (3) education.
K-12 education is getting worse not better. more and more kids arrive at college in need of remedial reading, writing and 'rithmetic. And less kids can afford college as costs spiral entirely out of control in higher education.
Without major structural and cultural reform, I don't see K-12 getting better. And with the credit bubble extended too far already, it's unlikely there is a way to make college and high-level technical education available to the fewer and fewer families that can afford runaway college costs.
There's a double whammy coming by virtue of the shrinking middle class -- more and more families whose household income comes nowhere near covering the cost of college, at the same time as their credit situations max out and college costs run away from them.
All the while university presidents build bigger and more elaborate edifices to their egos. The excesses come home to roost eventually.
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