There’s this fairly well known idea in organizations that expenses will tend to rise to fill the available budget. It’s not nefarious, just the natural result of a competitive market - both the market inside the organization, where people want to spend any money that is allocated to them (because why not?), and the market outside the organization, where spending (on fancy dorms, maternity wards, or rock climbing inside the office) is an arms race to attract “the best” students, patients, or tech workers (just to name a few examples).
Again there’s nothing inherently wrong with this. In tech, especially in the Bay Area, it means a lot of us get to live pretty nice lives as our employers have to invest a lot more of their budgets in attracting and retaining a skilled work force.
The problem is when this sort of thing is fueled by subsidies and/or opaque mechanisms. Google can afford to lavish it’s workforce from its own profits, but the average startup these days is burning heaps of investor money on “perks” to compete for talent that aren’t truly necessary.
But that’s private money, and if/when those companies fail, society at large isn’t threatened.
When this same phenomenon happens in public institutions like Universities and Hospitals, where the money is coming from individuals who need these services to thrive, the damage is much greater. In the long run, public subsidy for student loans doesn’t make college available to the masses, so much as it balloons the cost and saddles students with debts. In the long run, the US’ Byzantine “insurance” system for health payments doesn’t spread the cost around so much as it inflates and distorts the costs and changes insurance from a “nice to have” to an increasingly expensive barrier to entry.
The global pandemic didn’t create the problems these institutions have, it’s just exposing them and accelerating the inevitable failure of the unsustainable. It’s going to leave a lot of damage in its wake.
Pessimistically, I expect these institutions to go beg for money from the printer and try to sustain the unsustainable. But my optimistic side sees this as an opportunity for all of us to question the systems around us, and try to fix some of the underlying root causes that made these systems so fragile in the first place.