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April 26, 2010

BUDGET BS: COULD EDUCATION BE THE NEXT ENTITLEMENT?




I believe there are few sectors in this country more important than education.  The quality of our children’s education determines their academic performance, their collegiate opportunities, their career opportunities, and ultimately their income.  A child’s life can easily be defined by the exposure they have to the education system.
Is it the federal government’s responsibility to educate our children?
How much federal money should be spent on public education?
We could defer to the constitutional argument as to why the federal government should not be involved in education, but we would get the Rep. Hare response from the left (for those who don’t know Rep. Phil Hare recently said he did not care about the constitution).  So, let's argue about the spending side of education.
BACKGROUND OF EDUCATION SPENDING



Education spending first exploded with Bush Administration and its failed policy of No Child Left Behind.  This initiative has been criticized by both sides of the aisle since the law was enacted.  I believe everyone can agree that the No Child Left Behind Act is a prime example of how massive amounts of government spending cannot achieve improvement.
Or can it?
GRADES AND DOLLARS



I believe that while test scores have somewhat improved over the past several years, they are not a direct (or maybe indirect) result of increased funding.  The ACT chart seems more mirrored to the condition of the economy than anything else.  This would make sense considering a 17 year old is under more pressure and stress to work when the economy is bad than they are in a good economy.
So does President Obama agree with our analysis?



Apparently, he does not.  Most of the increase in education spending over the next five years involves public schools.  Ironically, it just so happens that the funding is going towards the pro-labor portion of the budget.  Not only do I believe that dollars and performance are not linked, the chart above appears to make that argument for me.
It appears as if in 2009, higher education expenses were virtually nothing.  How can that be?  How can higher education survive without federal government funding?  What’s happening?  I’m not sure, but because the music did not stop on our country’s colleges and universities without federal funding last year, one could conclude that our public schools could operate with less. 
A NOTE AGAINST NATIONALIZATION
There are 77 million secondary children in the United States.  That means that the 2010 budget covers $1,000 per child.  Since it costs about $10,000 per child per year, we can reasonably deduce that federal spending in 2010 will cover 10% of the costs.  This means that in order to nationalize the education system, we would need to spend an additional $700 billion per year.  And taxpayers should not expect their local property taxes to go down as state and local governments would find alternative sources for that revenue (infrastructure, perhaps?)
In addition to this, if you (as a parent) have a problem with the way your child is educated, you may no longer be able to go to a School Board.  Under nationalized education, concerned parents would have to take these issues up with their Congressman or go all the way to DC to voice their concerns directly with the executive branch.
The bottom line is that while the dollar increase is large, the effect is little.  Going from 5% to 10% cost coverage per child does little to influence a child’s education.  The only true effect this has is increasing the likelihood the child will have to pay more taxes for these expenses in the future.
Education spending costs the average taxpayer $365 this year and $1,450 over the next five years with the Obama increase being about $170 this year and $840 over the next five years.  To date, the budget BS series has shown the average taxpayer has $362 more in tax liabilities this year and $1,558 over the next five years as a direct result of President Obama’s budgetary plans.

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