Archives: 02/2013

By Grapthar’s Hammer… What a Savings

Researchers Patrick Wolf and Michael McShane write in the National Review Online today that the DC Opportunity Scholarships Program saves money. They estimate that the ultimate net savings from the private school choice program’s initial 5 year trial period will amount to $113 million ($183 million in savings set against a cost of $70 million). That’s good news, but I, like Alan Rickman’s character in Galaxy Quest, am somewhat ambivalent about this savings figure.

The trouble is that the real savings are substantially greater, because the above estimate doesn’t seem to take into account not having to pay for these students to attend DC public schools (which would have been necessary, without the private school scholarship program). And as readers of this blog may remember, DC spends a whole lotta money on its public schools. Just shy of $30,000 per student, per year in fact. Assuming that the average program enrollment during the trial period was 1,500 students, it saved taxpayers an additional… $225 million. Added to the Wolf/McShane figure, the total savings is $338 million—for just a tiny program.

By Grapthar’s Hammer, that IS a savings!

Having Common (Core) Enemy Doesn’t Make a Friend

I have long thought, as progressive blogger Anthony Cody discussed a couple of days ago, that libertarian types might form some sort of alliance with progressive educators against national curriculum standards. By and large progressives dislike the rigid standards and testing regimes that have been turning education into a clone assembly line, while libertarians want freedom, which is, of course, utterly incompatible with top-down standardization. But just because we have a common enemy will not necessarily make us policy friends.

As I’ve written before, it is pretty clear that many progressives don’t want educational freedom, they want local monopolies controlled by progressive educators who, often, eschew standards and testing not because all kids and families are different and standardization kills innovation, but because standardization curbs teacher power. Writes Cody:

While there are areas of agreement, there are some areas where progressives clearly part company with some conservatives. Progressives generally do not want public funds going to schools that promote religion. It seems reasonable to have a set of education standards that guides schools as to the focus of instruction at each grade and in each discipline. These standards should be developed by educators, in consultation with academic experts, and should reflect current scientific understanding. Democratic processes matter, so we support public schools overseen by elected school boards, and collective bargaining for teachers.

This doesn’t describe true community control of education, much less freedom. This is a system in which employees – especially teachers – have a huge political upper-hand. Teachers and their associations have greater motivation to be involved in education politics because their livelihoods are at stake, and are better able to organize than both parents, who have full-time jobs, and other citizens, who don’t even have the motivation of having a child in the schools. This is why teacher associations often dominate local school boards.

Note also that there would be standards in Cody’s ideal, but developed by “educators, in consultation with academic experts,” and designed “to reflect current scientific understanding.” So not only would citizens – who are supposed to ultimately control public schooling – apparently have no say in standards-setting, the standards would be based in “current scientific understanding,” as if there were scientific certainty about major educational issues. But there isn’t: From how best to teach reading, to what grade to cover Algebra, disagreements abound and the science is in dispute.

Finally, Cody offers the feel-good assumption that public schools are institutions that bring diverse people together and unite them. But as I often discuss – and we debated at Cato just last week – this doesn’t comport with the reality of public schooling, which was long based in homogeneous communities, systematically excluded out-groups, and today foments constant conflict. And frankly, the demand that those who want religion in their children’s education pay twice for schooling – once for government schools and again for the education they desire – is a gross violation of the basic American principal of equal treatment under the law.

All that said, it would be better to have local monopolies than state or federal. At least you could move to another monopolist if your present one were particularly horrible. But that would be cold comfort, because all government monopolies are heavily inclined toward curbing freedom, and toward serving the people who are supposed to serve the citizens.

I’ll be as happy as anyone if progressives start seriously challenging federally driven, national curriculum standards. But just because we share a common enemy won’t necessarily make us friends.

If Spending Is Capped So It Grows at the Rate of Inflation, the Budget Is Balanced in 2018

New 10-year budget projections have been released by the Congressional Budget Office, so it’s time once again for me to show how easy it is to balance the budget with modest spending restraint (though never forget that our goal should be smaller government, not fiscal balance).

The new numbers show the path is even easier. The budget can be balanced in 5 years if spending grows at the rate of inflation (the green line) and in just 10 years if spending is limited so that it grows 3.4 percent annually (the light blue line).

Budget Balance CBO 2013

Today’s path to balance is even easier because of better 10-year growth numbers, and also because of projections that the recent tax increase will generate more revenue (the dark blue line shows total projected revenue over the decade).

Because of Laffer Curve reasons, I’m skeptical about whether all that additional revenue will materialize, so both the chart and the underlying numbers are a bit speculative.

But what they do show is that the nation’s fiscal problems easily can be addressed with some modest spending restraint. Sort of a practical application of Mitchell’s Golden Rule.

Here’s my video explaining the importance of spending restraint. The numbers are now outdated, but the concept is still completely relevant.

As noted at the beginning of the post, I’m much more concerned about reducing the burden of government spending. Balancing the budget is a secondary concern.

That’s why we should impose genuine budget cuts and not just restrain the growth of spending. That would also make it easier to adopt good tax policy.

Maybe, in a parallel universe where politicians are motivated by liberty, we can even get entitlement reform and a flat tax.

The President’s Drone Memo

Yesterday, a memo describing the president’s legal justifications for drone attacks against U.S. citizens was obtained and published by NBC’s Michael Isikoff. The memo is a disturbing assertion of discretionary executive power that should concern and frighten all Americans. Unfortunately, the secretive use of drone attacks is one of the few areas of bi-partisan consensus in this highly divisive town, and the public still seems to resoundingly support current counter-terrorism policies.

Not being a foreign policy expert, I will not get into the broader questions of counter-terrorism policies. I agree, as I think most Americans would, that there are times in which the government can justifiably use lethal force against even its own citizens. As always, however, the devil is in the details, and here the details are encapsulated in the broad, discretionary language of the memo. Abstractly agreeing that there are times where a killing is justified does not answer who will determine when to use such force, what standards they are expected to uphold, and what possibilities of review exist for mistakes.

These standards—the “who,” the “how,” and the “possibility of review”—are at the core of the Western legal tradition. Putting process—that is, how something is determined—on equal level with substance—what is determined—is one of the Western legal tradition’s most important contributions. The goal of a legal system is not just to reach the correct result, but to reach that result via a just, open, and reviewable process. Fundamentally, these principles are concessions to our inevitable predilection for errors in thinking, judgment, and fact-gathering. The lynching of an obviously guilty child molester is problematic not just because of the disturbing result, but for how that result was determined.

Those are the principles that we should hold dear when analyzing the memo. Perhaps every drone attack has been the correct call (something we know isn’t true), and high-level officials certainly care about civilian casualties. Nevertheless, if we believe in the principles of the Western legal tradition, we shouldn’t okay with this power if it were in the hands of Mother Theresa.

U.S. Postal Service to End Saturday Mail Delivery

The U.S. Postal Service announced today that it intends to end Saturday mail delivery beginning on August 1st. According to the USPS, the move would save the government’s beleaguered mail monopoly $2 billion a year. The USPS has lost over $40 billion since 2006 and it has maxed out its $15 billion line of credit with the U.S. Treasury. With mail volume in permanent decline, the USPS has no choice but to try and cut costs.

Congressional meddling has made it difficult for the USPS to downsize its operations to reflect economic and financial reality. Indeed, the USPS has been asking Congress to allow it to drop Saturday delivery service for the past couple of years, but those pleas have been rebuffed. With the USPS literally on the verge of not being able to pay its bills in full, it will be interesting to see if Congress finally relents.

Even if Congress does allow the USPS to drop Saturday mail delivery, the postal service faces a bleak future. The technological revolution in digital communication has undermined the USPS’s mail monopoly. Compounding matters are excessive labor costs and the aforementioned unwillingness of Congress to grant the USPS sufficient operating flexibility. Without dramatic reforms, taxpayers face the possibility of ultimately being forced to clean up yet another federal mess.

Instead of kicking the can down the road (one thing that Congress is actually good at) policymakers should be considering privatizing mail delivery. In a competitive free market, customers might choose six-day delivery, or five-day delivery, or one-day delivery, etc, etc. Entrepreneurs would have an incentive to tailor services to satisfy customers and to seek new cost-effective delivery methods. Prices would be higher or lower depending on what customers want as is the case with any other service provided by the market.

Washington, DC: Congestion King

The Texas Transportation Institute has released its annual urban mobility report, and Washington, DC once again takes the crown of wasting the most time and fuel per commuter. Though the urban mobility report makes some questionable claims about the congestion relief provided by urban transit, not even DC’s expensive Metro rail system has kept traffic from costing the average DC-area auto commuter $1,400 a year in wasted time and fuel.

Of course, one reason DC is number one in congestion is that, with the growth of government during the recent recession, it has enjoyed far more job growth than most other major urban areas. Yet, if rail transit really were such a good way to relieve congestion, it should have been able to absorb that growth.

Instead, the rail system operated by the Washington Metropolitan Area Transit Authority (WMATA) is actually losing capacity as maintenance shortfalls force the agency to run smaller trains and those trains become less reliable. Last summer, when passengers on the Green line were stranded and had to walk along the rail line in the summer heat, WMATA promised that the agency would improve its safety procedures and keep people better informed.

Yet just last week, several rush-hour trains on the Green line were again stranded for hours without power. Temperatures on underground trains quickly rose to 90 degrees or more, leading some passengers to get sick and others to force the doors open so they could escape. One passenger reported that the only message they heard from WMATA was, “At this time, the station manager KNOWS NOTHING, I repeat, the station manager KNOWS NOTHING.” How reassuring.

New America’s New Entitlement

The Bill and Melinda Gates Foundation has delivered a lot of money for ideas to make higher education more affordable. One of the many papers it funded came out of the New America Foundation last week, and the report contains lots of proposals for Gates to work with. Unfortunately, its backbone – making the Pell Grant an entitlement program – is a complete nonstarter. Not only does Washington need a new entitlement like the Super Bowl needed a sudden spike in hair dryer use, the Pell Grant is utterly unjust, taking from Peter and giving to Paul so that Paul can make a million extra bucks.

The first point should be self-evident. Entitlements such as Medicare and Social Security are already gigantic fiscal asteroids hurtling directly at us. Indeed, at their present rate of growth, by 2050 entitlements will likely eat up every single cent the federal government brings in, leaving not a dime for defense and other discretionary spending.

A Pell entitlement would certainly be small compared to, say, Medicare. If I’m reading NAF’s report right, the total Pell cost in 2022, after all their recommended reforms, would be about $53.3 billion. (NAF says its plan would cost $94.4 billion over the next ten years “compared to current policy.” For simplicity, dividing $94.4 by ten and adding the resulting $9.4 billion to the CBO-projected 2022 Pell cost of $43.9 billion yields $53.3 billion.) In contrast to that $53.3 billion, Medicare is expected to cost about $1 trillion in 2022. But while the cost would be relatively tiny, the root pathology would be the same: a program with funding put on autopilot.

And don’t think Pell won’t sneak up to include increasingly higher-income people. No one likes seeing others get free taxpayer money, and no politician will let the “middle-class” – whoever that is – get “squeezed.” Indeed, NAF tries to soften the blow for those who would lose tax deductions and credits under their plan (very good proposals, by the way) by noting that “some of the aid that these benefits provide to families with middle incomes will be replaced with the significant increases to the maximum Pell Grant that are proposed in this paper.”

All that said, the root objection to Pell applies, whether it is an entitlement or not: There is no just reason for taking money from Paul and giving it to Peter so that Peter can get much wealthier. But that is precisely what Pell is intended to do: Take money from taxpayers and give it to other people so that they can get degrees and earn “$1 million more over their lifetimes.” If any entity other than government were to do that, we’d call it “stealing.”

The Pell Grant program absolutely should not be an entitlement – we have way too many of those as it is. Even more important, though, Pell shouldn’t exist at all. It is, essentially, legalized theft.

Cross-posted at seethruedu.com