We won’t save money by cutting education

November 9, 2011

By David Callahan
The views expressed are his own.

Nearly every day, if not every hour, some politician proclaims that taming America’s budget deficit requires “hard choices.” Strangely, though, few talk about perhaps the toughest dilemma facing the supercommittee, and the rest of Congress: How to reconcile the needs of old and young Americans.

Both groups have urgent and growing claims on the public purse. Four million seniors live below the official poverty line and millions more hover just above that line – contrary to the popular image of well-heeled retirees. And because the Baby Boom generation hasn’t saved nearly enough for retirement, such hardship is likely to get worse. Deficit hawks talk about cutting Social Security benefits and limiting Medicaid payments for nursing homes, but the truth is that seniors will need a more generous safety net in coming decades than what the U.S. now has.

Meanwhile, a new report on the “State of Young America” by Demos (where I work), argues that America is way under-investing in the next generation. Too many young people who graduate from our under-funded public schools aren’t ready for college and can’t earn a living in today’s low-wage economy. Those who do go to college often can’t afford to finish their degrees, and debt among college graduates has soared to record levels. Young adults trying to start a family also struggle with sky high costs for childcare, housing, and healthcare. At the same time, median earnings for young adult men with college degrees have barely budged since 1980.

The old and the young both need more help from government, even as public dollars grow scarcer. Squaring this circle, though, is not as impossible as it seems since the fates of the young and old are closely entwined. In particular, affording a strong future safety net for seniors will require that the generations coming up have the education and job skills to be highly productive workers.

In 1965, there were four workers paying into Social Security for every retiree drawing benefits. Today the ratio is 3 to 1. And a few decades from now, there will be just two workers supporting every retiree. If tomorrow’s workers aren’t darn good at creating wealth, entitlements for seniors will really be in trouble. A key way to ensure such productivity is by investing now in education.

This may be an elementary point, but it’s not so obvious as to actually shape public policy. The conservative drive to downsize government makes little distinction between types of public spending. Investments to build the human capital of the next generation are on the chopping block along with spending on the physical capital that is also needed for wealth creation. While conservatives at the national level decry Pell Grants as “welfare” and dream of abolishing the U.S. Department of Education altogether, anti-tax extremism at the state level is starving public universities and driving tuition beyond the reach of many young people.

Higher taxes would solve part of the dilemma facing Washington. For example, simply letting the Bush tax cuts lapse at the end of 2012 would bring in nearly $4 trillion over the next decade – cutting the deficit by far more than plans now debated within the supercommittee that would reduce spending on both the young and the old.

Even with higher taxes, though, some triage among generational priorities would be inevitable, and elected leaders need a framework for managing these choices. Stressing the interdependence between the young and the old is appealing because it doesn’t posit a zero-sum competition for resources. The more we prepare young people to be productive and create wealth, the more we will shield seniors from hardship down the line.

While the interest groups and politicians looking out for older Americans are understandably hostile to entitlement cuts, they need to formulate a more subtle and far-sighted position. The right set of priorities here would bolster protections for the most vulnerable seniors – fortifying us for the coming tsunami of indigent aged boomers – while also investing more in the economic success of younger Americans. To the extent that higher taxes and program reforms can’t cover the tab for such spending, affluent seniors should be asked to give up some of the benefits they don’t need.

America remains a very rich country. We should be able to both nurture the young and protect the old. And while the supercommitte isn’t the place to fashion an enlightened new approach to generational equity, it can at least move this conversation in the right direction. Not only should education cuts be off the table as a way to reduce deficits, but the supercommittee should be looking to increase how much America spends developing human capital.

Without such investments, any solution to our fiscal challenges will only be temporary.

PHOTO: Members of the Occupy Boston movement are joined by students from local colleges and universities are they demonstrate against the cost of education in downtown Boston, Massachusetts November 2, 2011. REUTERS/Brian Snyder


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Tuition costs, student debt, and college administrator salaries have skyrocketed for decades.

All of this is a direct consequence of government securitization of student loans (sound familiar?). The difference is that boomers can walk away from bad housing choices while youth are financially impaired for life.

Why do so many Starbucks’ baristas have $120,000 law degrees? This observation was true pre-2008. In 2011, the mere suggestion that this pattern should continue is disgraceful.

Posted by Summerland81 | Report as abusive

The avg teacher here in Portland,OR makes $80,000 year and that doesn’t include legacy costs! For 9 months work, every holiday off, work until 3pm and a 50% graduation rate! Sorry, I know there lenty of fine, passionate teachers, but we’d be better off with PT seniors/moms, etc working for half of this-at least in grades 1 through 8!

Also, boomers should not be walking away without being responsible for at least half the loss-that is a crime!

Posted by DrJJJJ | Report as abusive

According to TeacherSalary.com, the median Portland high school teacher–the highest classification–makes $51,600. This is a bit higher than the US median, but presumably every Portland teacher has at least a BA/BS; many have MA/MS.

PPS graduates 2/3 of its students ‘on-time’ from Benson and Metro. Only when you factor in charter and alternative schools does the rate drop to 54% (2010 figures). In some states, charter and alternative schools pay lower teacher wages and require less teacher education: As Mr. Callahan suggests, you get what you pay for–and you get what you educate for.

It is a tired old falsehood that teachers only work until 3pm. Most teachers spend many hours after 3pm in preparation, grading, parent consultation, training and in-services, and self-governance. Most teachers pay for at least some student supplies out of pocket without reimbursement.

DrJJJJ’s comment certainly does reinforce Mr. Callahan’s primary point: most US schools are underfunded to meet the needs of their communities, teachers are overburdened with non-teaching responsibilities, and students are graduating–when they graduate–unprepared for a no-jobs marketplace. When we add the crippling student loan debt to our post-secondary graduates–and those who don’t–we see that we have wasted the new generation, economically and intellectually…and that is a national loss.

While schools can certainly mine the senior and parental communities for talent and labor, this comment makes the common crucial error in education. Teachers know how to teach. It’s a difficult craft. It’s a specialty. And when the people of Portland (or in my hometown of Milwaukee) decline to fund schools richly, we not only condemn our youth to underperformance and despair, we salt the fields of our elders who live out their lives in stupider, meaner, and poorer communities.

Posted by 1stAmendmntPaul | Report as abusive

Education at the federal, state and local levels is one of, if not THE great failures of the last fifty years. Our society continues to shoot itself in the foot, allocating ever more money to do the same things year after year hoping in vain for different results. The solution is NOT to “fund schools richly”. We already do that.

Our largely unionized educational establishment has steadily and persistently dumbed down the “national educational curriculum”. Their greatest priority is to preserve the jobs of those who can not or will not teach effectively. Deep down in their “heart of hearts”, they believe it beneath them to imbue students with skills needed in “the real world”. It is mindlessly spitting out more and more students hopelessly less competent in the overall to get or hold a job compared to graduates of 1960 when America entered the “space race”.

There is no effort to separate in the process those 80% of the students that are sufficiently motivated that they will absorb 80% of the necessary information given 20% of teacher resources. The remaining 20% is largely comprised of three parts. Such allocation of resources is a wiser investment of educational funding and instruction than any alternate. Such allocation of resources is a wiser investment of educational funding and instruction than any alternate. I would suggest the allocation of resources as a wiser investment of educational funding and instruction than any alternate yet on paper.

There are those motivated underachievers, “behind for whatever reason” that could be “brought up to speed” in smaller classes with more individual instruction for an appropriate period before rejoining the “rest”. There are the mentally and physically disadvantages, whose “alternate path” may never end. There is, finally, a “hard core” of “underclass children” that are unmotivated, unhappy and disruptive in the academic environment for which there must be made an alternate path that does NOT lead to prison.

Education should not be the filling of a pail but the lighting of a fire! What we need is more intelligent goals so that today’s society is better served now and in the future, where we are, with what we have, for an ever-improving more functional society in the future.

Posted by OneOfTheSheep | Report as abusive

@OneOfTheSheep – Reading your first paragraph makes clear that education funds have been wasted thereby validating your thesis, in part. And your 80:20 argument suggests an implicit nescience of the No Child Left Behind Act.

Posted by SanPa | Report as abusive


I am NOT an apologist for No Child Left Behind. My 80/20 comes from personal business experience. 80% of a well organized proposal is achieved by the time the first 20% of a well prioritized budget is expended. Costs then curve progressively upward approaching infinity between 99% and 100%.

It is why 70 is a “C”, 80 is a “B” and 90 an “A” in most grading systems. These scores equal percentile mastery of the subject matter recently taught.

Think of this in the real world as a sewage treatment plant that produces an effuent sufficiently pure to put back into a river without upsetting the ecosystem thereof for, say, $200,000. If the government then decides to demand that the effluent be sufficiently pure for human consumption (as in reprocessing urine in a space ship), the cost will likely be another $800,000+.

Cities are on a short leash from taxpayers to get the biggest “bang” for each buck. The federal government and it’s professional bureaucrats are totally insulated by “the system” from the utter fiscal waste that their unfunded mandates inflict on states and communities.

My “point” was that the educational establishment at all levels has an ever-increasing entitlement attitude because it has convinced us it holds the future of our future generations in it’s hands. The reality being that it has repeatedly dropped the “baby” again and again in full sight of all. Enough, already!

It’s time to kick these bozos off the team and start with a clean sheet of paper. Give the GOOD teachers a place to do what they do and get out of the way. You don’t make a competent teacher out of a drone through mutiple layers of micromanagement. Successful teaching is less perspiration than inspiration.

Successful teaching is salesmanship…convincing students that something worthwhile to them is being made available; but it for them to reach out, understand, and make it their own to employ in their own benefit in the future. Teach students how to make their lunch, as opposed to handing them lunch premade. They need “skin in the game”!

The failure of our current “system” is NOT one of funding, but one of failed vision and failed implementation.

Posted by OneOfTheSheep | Report as abusive

In order to reduce the deficit there must be some take from all areas of federal government activity. If entitlements are to go untouched any and all other activities funded by the government will cease to exist. The debt deal bill already eliminates Pell Grant interest subsidies on loans for graduate students and professional students, beginning on July 1, 2012. That means that interest will accumulate on those loans (currently charging 6.8%) while the student is still in school. Currently, the government pays the interest portion on as much as $8,500 annually in subsidized loans while the student is still enrolled and for six months afterward.

Currently, graduate students can borrow as much as $20,500 a year in federal Stafford loans. The costs for grad students will increase by more than $18 billion over the next decade, according to the Congressional Budget Office (http://eng.am/oD1w3f). Therefore, that borrowing level will be raised to make up for the extra amount students will have to spend to make up for the subsidies.

Posted by Carly_EngAmer | Report as abusive

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