Priorities: Education and Social Security

In the United States we have made unusual decisions in what we have funded. We do not fund preschool for all, yet we fund planes which don't fly and the Joint Chiefs of Staff don't want. We do not fund free annual check ups, but we do fund us spending money on chapels on military bases, which should be left to the religious organizations to bear the cost. What can and cannot be considered pork is always going to be up for debate (is protecting a local environment for a few hundred thousand dollars pork? Is making easier access to public scientific information bad for America?) even though some like the two I list here are likely to benefit society, determining whether that is true can become complicated.

However, when it comes to one of the biggest issues in America's budget perhaps no bigger one is who the government gives handouts. The Federal Government redistributed $850 billion ($2700 per person), $705 billion went to the elderly ($2238 per capita), and $144 billion went to disabled people ($457 per capita). This is also one of the most re-distributive programs in America since people get a larger percentage of the amount they put in at lower income levels.

While it is re-distributive the bigger issue is everyone pays in more than the amount of money they get out of social security. Compared to investing in assets this is clearly a worse plan than if people were to invest their money in a diversified index fund. According to Politifact, the average couple will pay in $722,000 in taxes to Social Security and get back $966,000 in benefits, for a return of about 33%. On the other hand, someone who deposited $4000 a year, increasing at 1% a year (even at an income of $40,000, this is reasonable if not on the low side if you have an employer matching Roth 401k program) starting today for the next 40 years and got the average rate of return on capital (which is 8% based on the last 40 years of the S&P 500) would retire with $1.2 million saved on a $201,500 deposit for a 600% return on investment. Here is my work. Even assuming in Compared to an index fund which performs at market rate Social Security does not come close to comparing. If people invested wisely Social Security Old Age Insurance would be completely pointless, even for people near the poverty line.

The bigger issue with this is what we do not fund which is education. Education is the lifeblood of the American economy. If people are not educated it doesn't matter how many computers we have because people won't know how to use them. Education is so important that when it is put into the Solow-Swan growth model it almost completely explains economic differences between countries. If countries are to grow they need both access to capital and education, meaning high quality education is one of the most important issues to economics. Despite this, the gap in educational opportunity in the United States is extremely wide. Schools start with their funding from their local communities which are extremely unequal in terms of resources to start with and the amount which state governments equalize the inequality varies significantly state to state. Students end up at the mercy of their state governments in how much help the state provides to fix the inequality. The Federal government does little to help equalize this inequality in funding available to children (to no fault of the children) despite the amount it would cost would not be a lot. There are currently 50.1 million students in the United States in K-12. If the Federal government were to give an average of $3000 per student to help equalize the inequality between students (which could be used to get extra training for teachers, new computers, whatever they need) this would only cost us $150 billion, which would be only 25% of what we spend on military and 3.8% of the budget. Even $6000 per student would be only half of what we currently spend on military and 7.6% of the budget, assuming that spending comes from other programs. The per capita cost would also be only $476 or $922 per person, which of course would be paid more by the rich than the poor. We can afford this, in fact, we can't afford not to prepare our next generation for the technology of the future. The economic impact of an educated population is far larger than the cost of that education. If I spend $36000 on a student over 12 years and end up boosting her salary from $30000 a year to $60,000 per year it is easy to see what an impact this would have on the economy as a whole.

So, should we get rid of Social Security to pay for better education for young Americans? I'm not sure this is really a choice we have to make. One option we could do is eliminate the cap on Social Security income, fix the system so people at get at least the same amount of money than they put in on average, and use the added revenue to invest in America's education in the form of Treasury Bonds, which is what we already do with Social Security's $2 trillion surplus (and counting). This would guarantee Social Security will essentially never run out of money and provide education to those who desperately need it. Combined with the rest of my tax code this will mean that many people will have credits in Social Security but not end up paying taxes under such a system. This will help protect people, because if your parents don't end up with enough when they retire it will be the children and grandchildren who pay without a program Social Security, and it helps directly redistribute money to the people who need it. Ultimately, the choice between Social Security and education is a false dilemma as long as we are willing to tweak the Social Security program. This is possible, and this is what we must do.

Every Student Succeeds

Yesterday President Obama signed into law the Every Student Succeeds Act which amends significant portions of the No Child Left Behind Act. There are a few major things this bill does, such as:

1. Requires equitable funding between schools in the same district. This is a massive improvement. (Sec. 1501)
2. It increases the amount of money for children from at-risk homes (Sec. 1002D)
3. The high stakes with the testing have been removed.
4. It expands access to preschool.

There are a few major things it does not do:

1. Standardized Testing, which does not work, is still going to waste classroom time

The biggest issue is the Federal government sends money to schools through state governments, which as we know from TANF is a horrible idea because it is inefficient (with 56 bureaucracies doing exactly the same thing) and with 2/3 of states with Republican governments gives a lot of leeway to corruption and discrimination against minorities by wasting funds, which is what happens with TANF. States are now able to set more state standards and control standardized tests, which is a huge victory for Creationists. What we need to do ultimately is get state governments out of education and fund schools from the Federal level, and make school districts so they only serve one high school each along with their feeder schools (unless if a feeder school elects to have its own district, like at my middle school which makes a lot of sense in a lot of rural areas) so that we can't see the incompetence and disproportionate allocation of resources these obscenities create. We need to eliminate property taxes which are horribly regressive obscenities and fund public education fully from a progressive income tax like the one I proposed. The Federal government would provide the same amount per pupil in every district (keeping in mind scales of efficiency for larger schools of course) which will help end a lot of racism and inequality in America's schools. I fully believe that as long as state governments and school districts are involved in allocating funds to schools we will continue to see the awful inequity of education we see in this country and the only fair way to do it is a per pupil allocation which guarantees equality of opportunity which experience tells us cannot coexist with school districts serving entire cities.

It's a long bill, with a lot of good things and a lot of bad things, and it doesn't go far enough in funding poor schools.

Text of bill

NPR

Education policy post 1

(Creative title, I know)

We need to reform how we teach high school. As I was going for a walk today I was thinking about how to learn effectively and how I have found mathematics to be the most important subject in my education in terms of the tools it has given me. All of the most important tools I have learned in political economy are ultimately mathematical. From these tools comes the rest of the work I do and it allows me to understand fields I have never studied intensely because I understand the underlying logic of what they are arguing.

A big issue for me through school was making sure I got enough math to continue to the next step in my education so I can get to where I need to go. This was extremely frustrating for me, and left me without the mathematical tools I needed to continue my science education.

But what about English? As I was thinking about this today on my daily walk the books we were reading in English had large philosophical backdrops to them which were barely covered in school. The process of effectively writing is used in every class, and should be integrated as such. When it comes to literature however, they are based deeply in philosophy. I think while teaching such subjects we should introduce students to the major schools of thought so they can start to put the pieces together and understand what other books these authors were reading so that students can make the connection between the different books and time periods. The other subject literature comes from is history. If one is reading a books based in a time and place, there are probably political overtones to it, and in order to pick those up one needs to understand what was happening in that time and place. Reading books from Latin America is all well and good (we read a few in my IB English class) but doesn't do any good if you are not at the same time learning about the history of that region. I didn't take the history class at the same time, but feel like if I had taken it I would have understood the books a lot more, like the year before when history and English went through the same events at the same time.

To fully understand the books I think it would be useful to read them in chronological order and talk about the schools of thought as they evolve in conjunction with history class since literature is so based on history which helps readers see the trends underlying the books we are reading, since in high school this is all new information to most students.

So, literature is based off of history and philosophy and in order to fully understand the literature one must understand the history. Now, to understand history at a deeper level one must understand the political and economic forces underlying those classes. To fully understand this one would then need to understand some basic political science and economics. The political science would cover basic political theory (which starts with the same philosophers as one would use to understand the underlying themes in literature), American government (which we already do to a point), international relations (so one can understand war and why they occur), along with comparative politics (so one can actually understand what was happening on Britain's side of the American Revolution or how Germany fell into the Third Reich) are the four fundamental bases to political science and would greatly supplement the studying of history and increase understanding of what is happening.

Economics as well is necessary, and would not take a lot of time to cover the basic underlying principles such as supply and demand, elasticity, monopoly, oligopoly, perfect competition, and GDP among others. This of course would be done throughout the year and would help students understand the evolution of economic history and history as a whole because economics is such a fundamental part of society and how we live day to day.

And the really beautiful thing about this is in order to fully understand what economics is and do the problems in a way so that you can apply them to history you need to understand mathematics. This is one of the primary reasons why if a middle schooler asked me for advice about their education I would say to make certain they learn their mathematics at as high a level as possible because practically everything else they will ever study will ultimately be ultimately based on mathematics.

This is why I think of mathematics is the fundamental building block to most of our education. In order to understand literature you need to understand history and philosophy. In order to understand history you need to understand economics. A great deal of philosophy has to do with economics. In order to understand economics you need to understand mathematics. The patterns in music and art can be represented using mathematics which show the patterns which we perceive as beauty. The only fundamental part of a well rounded education that does not revolve around mathematics is learning foreign languages.

Mathematics truly is the language of the universe.

We need to fix global warming now

We are currently witnessing the hottest year on record in the history of man. 1 This is so apparent since we are witnessing heat waves in South Asia right now as I write this and the Pacific Northwest is receiving heat wave warnings, like I received earlier today. I have never received a heat wave warning before in my life here in the Great State of Washington on the West side. We received no snow last winter, which was extremely unusual and I am personally scared of a drought in the near future. We get most of our water from groundwater here which has never been a problem before, but this would become a problem in the future if we continue to see lower levels of snow.

There is no time to waste, and the longer we wait the worse it is going to become. All of the predictions say so. According to skepticalscience.com we can still fix global warming, and research has demonstrated this is possible.

I also do not see the connection between how this would shut down innovation to go to a more sustainable economy. The economy has not always been structured the way it is today and there is no reason to assume it will remain so in the future. With the development of electric cars by Tesla motors and other car companies it is clear to me that we can develop sustainable technologies, and with recycling significantly reduce our impact on global warming. The real danger to our economy is if we do not address climate change. The reduction in labor and deaths of millions will definitely cause a reduction in GDP and GDP per capita growth at that point is irrelevant because people are dying right now in the massive heat waves in South Asia.

Whether it is reversible is right now a big question which is not clearly answered. It is clear that to reverse global warming will take more than just shutting off our consumption of carbon (which is essential if we are to survive) 2 but what this study left out is if we pursued policies to actively reverse global warming and deacidify the oceans.

A little good news is that we have seen reductions in carbon emissions since 2000. This has been due mostly to moving from coal to natural gas for electricity production. 3 and 4 we see switching onto natural gas as well as a reduction in demand for oil as the major contributing factors to reduce ourcarbon emissions. Every state but Iowa has seen a decrease in per capita carbon emissions. We have seen a 8.3% decline in total carbon emissions nationwide, which translates to a 16.9% total carbon emissions per capita decline from 2000 to 2011. (the latest year for which I find data) This is a very important trend, and we need to make it continue into the future.

When designing policies, we need to work alongside market forces in order to maximize our potential gain. Working against supply and demand create unintended consequences which reduce the effectiveness of policies.

There are big actions we can do right now  as a society to stop global warming. Individual actions are helpful, and if you can afford a Tesla and have something to charge it with, that is a wonderful thing to do, but small actions alone will not be enough to reverse global warming. The question of whether we can is currently hotly debated in the scientific community, but there are a few major things we can do as a planet to stop global warming.

1. Tax Carbon. This is the best way to fight global warming right now. It will increase the cost on utility companies which get their power from non-renewables (which is the single largest contributor to global warming in the United States) 5 and make it more expensive to use gasoline to get between places, giving electric cars an advantage. Carbon taxes are more effective than cap and trade policies at reducing emissions because they tax the entire amount of carbon emitted, not just part of it.
2. Increase grants for research which connects to energy use. One of the most important fields today which needs investment is battery power. With our devices today almost everything has become smaller and more efficient, but batteries are relatively primitive. Increasing their efficiency will reduce the demand for electricity which will help reduce carbon emissions in areas which get their power from fossil fuels. We need to continue research into solar panels as well.
3. Increase subsidies for renewable energy and efficiency. We already have a substantial amount of money going towards renewable energy and efficiency 6 but we can still invest more money.
4. Increase the amount of money going towards science education. In order to face the challenges of global warming and have the engineers and scientists to analyze these issues, be it from my perspective as a young political economist or as an engineer, we need to have more people with the education and the tool sets to fully combat the problems we have today. Without that human capital we won't get the ingenuity we need to save our world. We need to work with teachers in developing effective teaching methods for all sciences (mathematics, natural sciences, and social sciences) so that as many students as possible can grow to love and understand these fields so they can go on to have excellent careers healing our world. The rest of my points will not happen without a large number of people who have the tool sets to fix these problems.

The overall plan is to increase the cost of using carbon intensive ways of transportation and electricity generation and at the same time reduce the cost of renewables to a point where they are the economically viable option. We have seen significant decreases in the cost of solar over the last few years, and with the right policies and innovation both public and private we can push the price down even further. Then we will see a massive increase in renewable energy as soon as they are less expensive than carbon emitting technologies. This is the ticket to building a sustainable world, and do it faster than alternative ways.

College For All Act Summary

I'm reading the full text of Bernie Sanders' bill and in reality it is not as it is being portrayed by the media.
1. It works like TANF, in that it will be administered by the states but only if state governments choose to according to Section 1(d). States are not required to participate, neither is there any mechanism in this section to help students in the states which would refuse the program given any benefit.

2. PLUS loans are going to see an increase in their interest rate of about 1%. Section 2(C) This is completely contradictory to Section 483A.

3. The only real improvement in this bill over our current system is in section 301 where the amount of money available for Work Study will increase.

4. There will then be some small transaction taxes in the final section of the bill.

Here's the full text:
http://www.sanders.senate.gov/download/collegeforall/?inline=file

So, a more accurate reading of the bill would actually be an increase in interest rates for student loans nationwide along with free tuition for students who reside in states with liberal governments. That is NOT what is being portrayed in the media about this bill. This bill is not like Social Security where everyone qualifies, it is like TANF.

Fortunately for students this bill will never pass the House. TANF is a failed program which only exacerbates the inequalities between the states, and we don't need to replicate its failure in our education system as well.

A real solution to education would be in reality very simple, and that is to expand the Pell Grant system to cover college tuition for all students who are admitted to accredited universities in the country. That is all that really has to happen in reality. We don't need higher interest rates or another system to be disfunctional like TANF. We need someone who will propose a bill which will increase the grant money available to reduce student tuition to 0. We almost have the system with the Pell Grant system, but no one in Congress seems willing to propose such a bill.

Education, Unions, Politics, and Eating your Own

I recently came across a collection of Harper's Weekly from 1872 in the house that I live in. In it on the front page of the August 3rd issue it talks about President Grant and Education regarding the ongoing election of that year where President Grant was running against Horace S. Greeley. The issue was that President Grant (while he wasn't a perfect president) had expanded education access in the South to all people. The South had been until President Grant's term the most culturally backwards place in the Western world (to compare apples to apples) with the lowest literacy rate and the slavery being the worst in the entire world. The article talks about how Horace Greeley would reverse the policies, but looking at more detail it turns out that this was not true how Horace Greeley would change such policies and he had been campaigning for years for progressive policies. This is a classic case of media twisting the words of a politician in a way that is dishonest and misleading.

Besides the deliberate misrepresentation of Greeley the article does have some really good points. Democrats had historically been the party of racists, and the period of 1865-1909 was the period when they moved from their racist roots that extended back to 1825 when Andres Jackson became President, so it is natural to not expect a party with such deep roots in fascism to change overnight. There were also a lot of Democrats in the South who had maintained their earlier convictions all the way up until Richard Nixon courted them in 1968 in his Southern Strategy which made them realize that the Republican Party post-1968 had the policies that they have agreed with since before the founding of our nation. The opposition to that great progressive American ideal of equality of opportunity has always been a deeply held Southern tradition.

This movement in the North to expand public education by using the resources of the Federal government has been one of the great accomplishments of American Democracy. The Southern Economy is much more diverse today than it was in 1965 and the gap between Whites and African Americans is smaller today than it used to be. It is still too large, but the campaigns of Lincoln, Grant, Roosevelt, Kennedy, and LBJ have made immense progress. This is a major threat against the traditions of the South of subjugation and their goal of slavery because it proves that the federal government can be immensely successful when used appropriately at making sure everyone has the opportunities they need and when these programs are done the leaders of freedom gain more power which means that those who would turn the South back 200 years to a nation of slavery if they could is more difficult.

In response to this by 2001 the Old Southerners needed a new strategy so they proposed the No Child Left Behind Act. This misallocation and destruction of the American education system was never designed to improve education and everything in it has been disproven by professional studies of what works and what doesn't. It gives money to massive testing companies who have a stake in politics which is the short-term benefit in higher campaign funding for them but the larger long-term benefit is it helps turn teachers off of looking for a more egalitarian system where people can get a high-quality education through the state because the state's system has been severely damaged. This is working to undo almost 150 years of American policy to ensure that every American child has the ability to get as far as possible and how it shouldn't matter how much your community has you can still get a high-quality education with the latest technology, and it doesn't mater how much your family or local community has. This was what President Grant begun and has continued, which ended up with high schools and public education extending all the way through college. The highlight of the time was when in the 1950s and 1960s college was extremely affordable and it didn't matter how much your family had you could still go get yourself an education. The result was a growing middle class and a booming economy.

The issue for these people who oppose public education is that in their misguided view on the economy they think there must be someone who has to be subjugated in order for themselves to get rich. Only recently are we finally seeing them listen to the reason of economists and the voice of reality that you can be wealthy and treat your employees extremely well. With this misguided viewpoint they (the business owners and the politicians they pay) have tried to destroy our public education system. The beginning of this resurgence against education was under Ronald Reagan when we saw massive increases in tuition for college which effectively priced a large number of working poor out of the system. The latest action in this success for the Republicans at elimintating opposition to their destruction is opposition to common core without any real proposal to make certain students aren't learning creationism in science classrooms and other fairy tales. This is a direct response of the No Child Left Behind Act, which I believe was calculated, and has succeeded remarkably well at giving local school districts the ability to destroy their education systems which has resulted in a remarkable amount of doublespeak and killing of opportunities. With teacher's unions moving away from the common core which is the way to end this destruction of our education system it is a victory to people who would move our country away from science. This removal of the best advocates for our schools from the public debate and their attacking politicians who want to ensure no student leaves high school without ever touching a real science book harms everything that makes this country great. This is the classic eating of your own which I have observed the left to be so fond of doing. Teachers should be collaborating with the government to construct a common core that has the pieces that are essential and gives teachers time to work with their students without being rushed. They should advocate for policies based on research as opposed to running away from the issue and demonizing those who are proposing to end the destruction that has been done to our education system particularly by Reagan and Bush either directly or indirectly.

The next step for the Confederates is the privatization of schools which if the public schools degrade far enough should get teachers moving to private schools which will price even more students out of getting even a basic education. The ideal of education as a human right, while not codified in law, has become an important part of American politics and is being constantly targeted by these Southerners which will destroy our economy.

This will lead to a less educated work force which will push our country back in time to a place more similar to what President Grant was fighting in his advocacy of public education which did make an impact in the South (since the vast majority of African Americans can now read) and decrease our competitive advantage which is the engine of American economic growth. The decrease in civic knowledge as well will hurt our democracy.

For the racists of the South (such as Bush and Perry) they cannot speak out today in racist terms so instead they use more nuanced terms this is a great threat to the deeply held Southern Traditions of slavery and segregation. This is why they talk about privatization and other Trojan Horses, but in the end they have always been looking for the same thing for over 200 years. Nothing about these people's goals have ever changed in the history of this country.

Fortunately, not all is lost. There are still some people who are trying to ensure that students do not leave high school without a science education with President Obama and Arne Duncan pushing to make it be required that students learn science in the schools among other important topics which are frequently omitted by the truly crazy inheritors of the Stars and Bars. Hopefully in the future we will see a further resurgence of Progressivism in American with Elizabeth Warren speaking her mind and being able to make sure that the American people hear the truth and hopefully not try to whittle it all away with Compromise. President Grant's second term was marked with great compromises which destroyed many of his accomplishments and gave more power to the Confederate Democrats who wanted a return to slavery. Fortunately the first term made immense progress that not even compromise could undo, it only slowed the march to freedom for all people in this country.

Note: I unfortunately cannot get an online copy of the article that prompted this besides going past a pay wall.

Working with high schools

On Saturday at my school we had an event to help women get involved in politics. At the end the people who attended pretended to run for different positions and I pretended to run as legislative liaison, to represent my school at the state capital and push for funding for education to make my state even more amazing. Since I was pretending to run, I needed to have ideas! Some people attending thought running as a minority candidate would be enough, but actually no, Michelle Bachmann and Herman Cain both ran for President, and Geraldine Ferraro ran for Vice President in 1984 so just being a woman, an African American, or an African American woman isn't enough to win an election. Obama won the 2008 election not because he is African American but because when it come to policy positions he was 1. Made fewer mistakes than Hillary Clinton in the primary (with her claims about when she went to Kosovo and was being "shot at" which turned out to be not true) and John McCain who selected Sarah Palin as Vice President, 2. his book Audacity of Hope clearly laid out what he wanted to do as President, and 3. he had absolutely no scandals or mistakes in the primary. The same lesson is apparent in the 2012 election in both the Republican primary election and general election. Ideas and the ability to articulate them are clearly the major currency of politics.

Enough of philosophy, here are the two ideas I thought of while running as legislative liaison:

Idea number one: hire college students at local schools to be tutors. It solves two problems, schools need tutors to help students, who may need help routinely or only occasionally, and college students need work. This will help students get the help they need when they are struggling and by having a younger role model to help struggling students understand concepts will hopefully make it so that more students can go to college and get skilled occupations.

Idea number two: There should be more communication between colleges and high schools to make certain that students who are advanced can take the classes they are ready for at the college, and provide opportunities for students who are advanced beyond their peers to take classes at local colleges more than we already do. This should be done on a nationwide basis because it makes sure that students can get as far as they can in knowledge, and there is nothing wrong with being smart. People should be able to be as smart as they can be because it furthers human knowledge and grows our economy, by opening up doors for everyone.

The third idea was simply increasing funding for higher education, which is an old but effective idea.

An open letter to the President about the Economy

Dear Mr. President,

When you gave your state of the union address last month you talked about taking initiative in making executive orders to increase pay of Federal contractors and other actions to improve our economy. It's been two weeks now and I haven't seen that the orders have been passed. I want to tell you how your proposals effect me in two ways.

I am currently a Junior in college studying economics and political science and am fortunate that my family has been able to make sure I can go to school without going into serious debt, but many Americans are not so lucky. Other students' parents have been fired, and they don't have the access to scholarships, grants, and loans public or private to continue going to school. The total number of scholarships and grants available to students is never enough, and this means that people frequently have to postpone their education or don't go to school at all. When millions of Americans who are capable of getting a high-quality job paying $80,000 a year or more but instead work retail at $30,000 a year or less for a decade it makes a huge dent in their ability to save for retirement, shrinks our GDP, shrinks demand for goods and services, and makes it so America under performs year after year. This is unacceptable. More can and should be done to increase the skill of America's labor force by increasing access to college. If the government set aside only another $20 billion to give grants to students who are attending school full-time, which is not even 1% of the total Federal budget, it could help more than a million students get through college in four years and even go to college at all, and give economic benefits to the students and their surrounding communities and country for literally the rest of their lives. Paying for people to get the skills they need today to do high-quality work makes it so they can be financially independent and will never need to go to the government for assistance for food or housing, increasing GDP and decreasing government expenditures in the long-run as a percent of GDP because the private sector will grow.

I am not only a student but have a small private investigation agency, mostly on-line research. I have spent a lot on marketing on-line, and every few months someone will ask me to do a job. I tell them the price (which is of course market rate) and people will frequently not respond. I think a large part of this has to do with how prices over the past 30 years have risen, but wages have not, partly due to the large decline in union membership. While I do think that people who work hard should be paid justly we should also make certain that people who get work are working a job that pays them enough so they don't have to borrow for small things or be dependent on government aid such as food stamps when they work 40 hours a week. It is not just an economic crisis but also a moral crisis. How could anyone work for 2000 hours a year and not even be generating enough to afford food and housing? A big step towards increasing the circulation of money and helping small businesses find customers to increase opportunity will be to pursue economic policies that make it so people can be paid enough to live. For me personally, the American Dream is being able to be self-sufficient, to live in a country where with hard work and dedication anyone can be middle class and everyone can be the best they can be. In order for me to be able to do that with millions of other entrepreneurs we need to have our neighbors be paid enough so they can purchase our services and we can have strong local economies everywhere in this country. Paul Krugman estimates in his book End This Depression Now that full recovery for the recession will finish in around 2019 to 2021. Americans can't wait that long, and the decrease in incomes and investments will effect people for the rest of their lives. For young Americans like myself it is very scary that when I graduate from college with my Bachelor's next year or my Doctorate in 4 years we will probably still be in recession, all else being equal, when I see my friends who graduate with college degrees working in retail. Its a disgusting waste of skill and talent. I hope that you can pass the executive orders to increase federal compensation so that no one working for the federal government will need to be on food stamps, which will help our economy. We need you now Mr. President.

Please do the right thing and invest in America as much as you can today. Its not just an economic but also a moral issue. The Republicans don't have the votes to stop you from issuing the executive orders you can, and if you work really hard this year showing that you will fight for the American economy the American people will back you up on election day.

Downsizing America

There is a trend in the United States of downsizing everything. Many people feel like we have gotten too big and that it has become unsustainable. We see large libraries which we feel we must close, we see the massive education budget and look at them like an accountant, without analyzing the long-term benefits that take more than two years of accounting to recognize. We saw ourselves pouring money into mass transit in the 1950s which we cut, shrinking the government's budgets on mass transit only to find massive literally never-ending traffic jams.

This is a very disturbing trend in the American conscious. We want schools to be self-sustaining in the short run, looking at library resources as an expense that don't immediately pay off. We postpone keeping educational resources up to date and instruments in top condition, while if we kept our public resources in top shape will yield huge dividends in the future. $100 to keep a piano in tune today is a small price to pay for every piano student in the school having a great piano to play on which improves their skills so they can be better musicians. We force people to go into debt if their parents didn't save for them and reduce funding for classes in academic disciplines, making required classes hard to get into by making supply be artificially lower than demand, never raising the number when there are always more students wanting the class than the amount of seats offered.

This is a very disturbing trend in the United States to move schools from the halls of learning to a place focused on profits. Small rural schools lack up to date technology keeping their students technologically illiterate across the nation. Funds that go into libraries are cut, and the government saves a little money every year from that, but it removes vital resources from people who need them to get a well rounded education whether they are children, college students or lifelong learners. References are removed which makes our quality of education and culture suffer. Not everything is available on-line, most maps have never been scanned in for the public, and when we close the map rooms of our universities (a trend I am seeing at different universities) the knowledge is lost forever to the public and will never be put on-line.

I see this as part of what will probably become a much larger trend. How much longer will it be until we will say that people don't need to get a well-rounded education in college and everyone goes to trade school? How long until we start to send everyone to trade school? The argument I expect to hear is “you want to be a scientist, why do you need to know history?”, forgetting that they have lives beyond their careers. School will only be focused on getting a job and we will only take classes that make it so we can get the job we choose to get. Sure, you can learn many things online, but there is nothing like having a professor right there who can check your work, make certain you understand the content, and you can ask questions for immediate correct feedback. Khan Academy, Youtube, Udemy etc. are amazing invaluable resources, I use them every week and they have taught me many things, but they don't test me like school and I can't just write to CGPGrey and ask questions like I can for my professor. The teachers of these websites don't have the time to answer questions from each of their million students. The student just can't get the same amount of guidance. I fear that if we remove the wide base we get in college and continue cutting practically all funding from our schools we will be a weaker nation.

We need to stop cutting funding from our schools and keep supporting liberal arts schools with the resources they require because it is our national security. We need to keep having resources like old maps that are not available on-line, old books that you can only get for a $100 per year subscription, and other resources in our university libraries and public libraries because if we don't we will certainly be a weaker nation economically and culturally. I don't know how much more our country can take. You don't fill a water bottle by pouring out half the water.

Deadweight loss is real, but depends on the situation

One frequent complaint you will hear about taxes (predominately from conservatives/laissez-faire/austerians/Austrian School/whatever-they-call-it-now) is that taxes are bad because they create deadweight loss. They view taxes as if that money is just leaving the economy, so taxes are evil but they stop arguing this when they start talking about the military-industrial complex and bank bailouts.

I would argue it depends on what the money is being used for and how that benefits or harms the economy in whether it is predominately deadweight.

If you are taking $18 billion and spending that on weapons to send to Egypt and Israel (we arm both sides) to the point where they don't need more weapons, it creates some manufacturing jobs here in the United States, but many of these weapons aren't used. It also means factories here at home are getting government grants to produce weapons. Planet Money Why couldn't we repurpose our military industrial production facilities to produce solar panels, the parts to Geothermal plants to tap into the North American-Pacific plate boundary in the vicinity of the towns of San Francisco, Los Angeles, and San Diego, California which will help move us towards a sustainable energy future (which is also about the same cost as conventional coal and less expensive than the coal plants that are currently being built.) which will ensure that our economy is stronger. This does create some jobs, but all of the money that goes to the materials that produce the unneeded weapons is deadweight loss because that doesn't support jobs or anything beneficial for Americans, and the benefits are probably small compared to the cost. The difference is by definition undeniably deadweight loss.

On the other hand, other types of government spending can be beneficial. If we make it so that tourists can see more parts of America it could boost the economies of currently unserved inner cities like Nashville, Las Vegas, and Columbus. Expanding AMTRAK is the way to do this, because there is consistent proof that for every dollar spent on AMTRAK we get more than a dollar in economic benefits for the economy. AMTRAK is not an expenditure, it is an investment. We have the railroads and the money to do amazing things, we just don't have the will. Expect more articles on this here on my blog, it is one of the best ways to grow the economy. Well Researched Source 1 and 2

One other type of expenditure these deadweight people love to target is education. We spend a lot on education through the economy, and it drives conservatives crazy. With every expenditure it is critical to see the opportunity cost of not doing something. If we teach a child how to do math, write, read, speak a foreign language, do science, understand the world around them and why it got that way (history) it is very expensive, but it is more expensive if we don't do it. There is very consistent research that people with more education make more money over their lives meaning they are more valuable to the economy and more likely to make world-changing inventions. Some people love to talk about how college-dropout billionaires didn't need that college, but they all had some education, and usually dropped out to form the companies that made them rich. Out of 400 billionaires, 34 of them dropped out from college, or 0.85%. Bill Gates is an anecdote. Most of them are like Warren Buffett and have advanced degrees. Wikipedia When it comes to the economy as a whole, people who graduate from college are less likely to be unemployed and are more likely to make an upper-middle income (with a few exceptions, like teachers). BLS If we didn't have the types of programs that allowed these people become great businessmen we would all be the worse for it.

So, the next time someone complains about taxes and claims with their Bachelors that there is deadweight, ask yourself about the opportunity cost of doing it and you will have a better picture. Perhaps the $6.4 trillion dollars spent on education is actually worth every single penny.

Another way to cut the deficit

This is one of the best graphs I have ever seen, and I used to have it on my wall in my room as motivation to get the best education possible.

This graph has a few political implications, and if we assume our goal is to decrease the deficit it tells us to invest in education so that the median wage and tax revenue can increase. If our goal is to decrease unemployment it tells us the same message, invest in education so more people can be working. If our goal is to have the most advanced economy in the world and be the most ingenuitive,  than making it possible for people to specialize and understand their fields at a deep level where they can contribute is the best possible plan.

Basically the right course of action is the exact opposite of what Republicans, and now Democrats, are proposing to do. Regardless of the deficit.

First you attack the seniors, then you attack the students, and nobody screams

I just read a summary from CPB on the President's budget for education, and he is going to set student interest rates to the market rate. This is bad for several reasons:

1. Sallie Mae is government corporation, and whatever money they make is extra. They don't need higher interest, and making lower interest is a good idea.
2. Tuition has risen so much at state schools over the past few years that college is becoming increasingly unaffordable. The least the government can do is decrease the interest rate which will save middle class families millions of dollars, but putting the rate at such a risk is a terrible idea.
3. The only motivation I can see to tying Sallie Mae interest rates to the market rate is that it will now be easier for large banks to steal a significantly larger share of the student loan market, by offering "discounts" which people will flock to. If everyone uses private banks than it will make it easy for Republicans (or as seems more and more likely, Democrats) to attack and dismantle Sallie Mae.
4. Eliminating Sallie Mae (which currently gives decent interest rates) and forcing people to go to banks which might then raise their rates for students will give a lot of free money to the big banks that practically own our government.

The Democrats ran last year on a platform to defend the middle class, it was practically the theme of their national convention. "Trust us, we are the defenders of social security, the givers of Medicare and affordable education" yet the past week has seen the Democrats leading the attacks on both education and Social Security.

If there ever was an appropriate time for a third party that represents the interests of average Americans to appear, the time is now.

BEDA 2013 post number 10!

On how Subsidizing education fully is the least expensive option (with some simple economical analysis), another chat with a friend

I was chatting with a friend in response to a facebook listing today which i lost my temper and went all spock on them. We are both college students, he is a freshman and I am a sophomore on opposite ends of the country.

If people are choosing degrees that don't convert to jobs than that is there fault. For those of us (including myself) that desire jobs that are high in technology in the sciences, or the future programmers, lawyers, and other jobs that give massive payback to society and are looking forward to having to pay back the equal amount in taxes instead of buying things that would stimulate the economy (good economy = money flowing, bad economy = no money flowing) it is a burden and keeps us from giving back to society that we want to. Look overseas and we can see many different solutions to the problem of education debt and compare this number to GDP growth and you will see a positive corrolation (China, Japan, Taiwan, Sweden, among others vs. the USA) of increased government college spending and GDP growth rate. This will take about 15 minutes of your time, are you willing to do that for your country to make a more educated vote?
bam! right to the nose!

Sounds good, but you can make a much simpler economic argument:
1. Education increases income.
2. Income is spent and spurs economic growth.
Conclusion: Education spurs economic growth.

yeah. simple. Some people are so d**n stupid!

Yes. Yes they are.

and lazy
the lazy is the really important part

And horribly ignorant of basic economics.*

yeah.. which you will not learn unless you have the guts to learn them yourself... now that is the real shame
someone else argued on how government spending increases college tuition!
bullshit
because state schools are massively less expensive than private schools
that is out of state cost

Also, private schools are a competitive market. Even among different "grades," like Ivies, mid-range liberal arts colleges, etc., there's enough competition that anyone charging too much won't get any students. The market price tells you what a college degree is worth to the student.

exactly

Now, the economic arguments break down when you say government should pay *entirely* for *everyone's* college.

and the education at state schools is still really, really good in my experience

That's fair.

would those be the economic arguments against a system with full funding
?
(just to clarify)

No, the arguments in favor of subsidizing higher education. Consider this: there is a higher demand for legal services than there is a supply of lawyers. Therefore, lawyers are ridiculously expensive. If more lawyers are trained, society as a whole benefits because people save a ton of money on legal services.

yup
supply v demand, lesson #2

However, the principle of diminishing returns dictates that the benefit of having 1.5 million lawyers instead of 1.4 million is much greater than the benefit of having 40 million instead of 39.9 million.
In fact, the benefit of each additional lawyer will at that point be less than the cost of educating them. Therefore, paying for it is silly.
However, this is just a rephrasing of the argument from "education is a basic right" to "society benefits when the government subsidizes education in certain industries."

so we would run into a situation where only a certain number of people could sign up to study to be lawyers in any given year which fixes the problem you are talking about of oversupply, by cutting supply

So yay util?
xD

pretty much. It really works
I use it for all my arguments

Oh, you don't need to limit supply. If the wages get too low, people will simply stop going to law school and supply will self-regulate.
Of course, that's not a perfect example because the Bar Association actually does limit supply, and with the very specific purpose of keeping pay high.

exactly, which means it would solve itself and would balance out in, oh, lets say a couple decades
so lawyers is a terrible example

In the status quo, but it illustrates the main point since it is undersupplied.

Tearing us apart from the inside

Anarchists, might sometimes sound amusing at what they say, but the system of government is the scariest of all the systems. Of 195 countries in the world 1 has what could be considered an anarchistic form, and that would be Somalia. Every other nation has the government involved in many things, infrastructure, education, public utilities, public goods, and other things that directly help the People. They currently have been eliminating funding for programs that go directly to the people, education is getting the axed with the saying of "budget" all the while people's incomes are being sucked up by health care more than anywhere else in the world (World Health Organization) and places where actual waste happen are not being targeted. We spend more money on military than any other nation except Israel (which is understandably spending a lot being in a region in complete turmoil and instability) while we are in the safest part of the world. This goes back to my previous previous post "Of, By, and For the Rich" where the rich can buy these "fiscally conservative" tea party members to get billions of tax payer dollars sent to the politically powerful.

But what actually disturbs me about this is that they do not focus a lot of energy into making government more efficient. Every American should look at the US Immigration system which is I hope the most convolved part of the law. Also, why does the tax code have to be 16000 pages long? That seems bloated and if it were simplified by removing the lobbyists' sections the government would not have a deficit and everyone's taxes could go down, stimulating the economy, and decreasing the amount of bookkeeping necessary to keep the government running. If they really were proponents of small government they would have this on their platform. They don't which tells me that this isn't what they are concerned about. They then must be the lobbyists' best friend.

One idea I have is that Social Security should not be mandatory. Many people do not want the paychecks. If they do not want the help they should not be forced to have it. It should be a voluntary basis though because some seniors live on social security paychecks and they keep them from being a burden on their families. Those seniors' families benefit greatly by the paychecks for their years of work and the seniors live better lives.

Also, on welfare, there is a lot of waste in the system. Many people get their welfare checks and spend it on things that should not be covered, such as big luxuries, cigarettes, drugs, and other things that should not be covered. Welfare should be designed to give people enough money to live when they are down on their luck so that they can recuperate from an injury, or some other condition. Welfare should be designed so they can buy things that they need and other things that give them the information they need to stay on top of the news. Things like food, newspapers, internet, cable, books, toiletries, pet supplies, fuel, basic insurance, and inexpensive electronics so that they can stay on top of current events and developments, but do not buy luxuries that they wouldn't afford otherwise. It should be seen as an intermediate step and they should spend their welfare dollars on a debit card. They should be allowed only $100 of cash from the debit card and an upper limit of the current cost of living so that they cannot overspend or purchase things that are not necessary. This would eliminate the waste that happens saving billions of dollars that are wasted.

Education should not be cut. Education is the one part of government services where I do not see any real waste because, excluding teacher's salaries, every penny goes directly to maintenance and education. It should be the last to be cut because it is where students should learn the skills necessary to succeed in the modern world. Education should be looked at as the greatest investment of them all because through it our economy becomes stable through our future leaders and professionals, no matter what their career, get the jobs they need to keep our country running. It should train students to be active members in society and know how society works, which it has not been designed to do with the emphasis on testing and the removal of High School Civics several decades ago. The reforms have made the curriculum less preparing for what we are going to need as adults with many concepts, like economics, psychology, and political science being removed to dumb down the curriculum. An attitude change is needed here. Children are brought up by our culture to think that school is a chore and not supposed to be fun. It should be more focused on preparing children for being world citizens than passing tests and going to college. The culture of high school sends students to college who then go on to do careers that do not require college education for their entire lives, which forces up the demand curve for college, making those of us whose careers require advanced degrees have to spend more than we should. Many of the "college-bound students" should go to trade schools. Most programmers for instance should go to trade schools because they are prepared for their careers. Once high school prepares people for the responsibilities of citizenship and adulthood, career training would be all that is required for productivity and full societal participation. This would save society billions of dollars for society and save years of time and tens of thousands of dollars each for many young adults in unnecessary college tuition.
     Also, school districts across the country should get the amount of money that they need to have state of the art equipment, up to date textbooks, up to date school buildings, and an environment that tells students that America cares about their futures. Rural school districts have to scrounge for money to replace out of date equipment all the time while rich school districts get their computers replaced all the time. Every school district should have the same high standard of education that is appropriate for the richest nation in the world. China is still a long ways behind us in GDP.

What they are doing is eliminating the very programs that allow the people who are not rich to not go bankrupt, the same programs that raised the United States from an agrarian nation to a first-world industrialized superpower are being put first for cutting. These things are so ingrained in society that many do not realize the impact these have on our society today. This makes the number of lobbyists fighting for them small, while the corporate interests in the military-industrial complex are very interested at more arms sales, because they get richer.

This would look like corruption but it also shows a purposeful lack of care for what happens in the future and a hatred for government. Some civilizations fall from invaders and some fall from revolution. Others fall from internal vandalism to society's structure. They are destroying American's acts of citizenship through a massive propaganda machine spreading fear through lies, i.e. the so-called death panels. By destroying all of the things that our country is built on they are effectively destroying our country by bringing our society from the level we share with Western Europe to the only country on the face of the planet that does not provide any services for its citizens, Somalia. This is treason and must be stopped.