President Obama can't shake his stimulus addiction. In his Thursday joint-session speech, he's expected to announce $300 billion in additional spending, adding to the $4 trillion he's already borrowed from future generations since taking office.
As with Mr. Obama's $825 billion spending spree in 2009, the ostensible goal of the latest giveaway is to jump-start job creation. At least he has the priority straight. The economy failed to create any jobs at all last month, the unemployment rate has been stuck above 9 percent for most of this year, and the rate of long-term joblessness has been growing steadily while labor-force participation has declined. It's his "solution" that will make the situation worse. Temporary tax cuts and permanent spending on "shovel-ready" infrastructure didn't work in 2009, and they won't work now. This time around, instead of pretending to build roads and bridges, the administration's gimmick is to direct a big chunk of the spending to states and local governments to improve school infrastructure and hire more staff in schools.
This has more to do with payoffs to union allies than economic growth or helping little Johnny read. Expenditure on public education, kindergarten through 12th grade, has increased steadily over the past 40 years. Employment in public schools increased 10 times as fast as enrollment between 1970 and 2010. The extra cash and swelling ranks of dues-paying educational union members have failed to make kids smarter. As the cost of sending a child through the public school system has nearly tripled, performance in reading and math has remained stagnant. Achievement scores in science actually have declined.
According to a 2000 Department of Education study, the most recent available, almost one-quarter of public schools had at least one building in "less than adequate" condition. This is a misleading statement. As a 2005 Goldwater Institute study discusses in rigorous detail, the reason for the widespread maintenance issues in public schools has less to do with the level of funding and more to do with the incentives created within the public school system.
Arizona's private schools successfully maintain their buildings and infrastructure on far smaller budgets than public schools in the same areas. That's because parents will refuse to send their children to a private school with buildings so poorly maintained as to pose a risk. That forces administrators to undertake repairs and maintenance in a timely fashion. Not surprisingly, only about 16 percent of Arizona's private schools surveyed had a building in less-than-adequate condition, even with less operating cash than their government-subsidized competitors.
Public school administrators face no such incentive to undertake maintenance promptly. There is unlikely to be large-scale withdrawal of students even if facilities deteriorate. Salaries are not tied to enrollment. In fact, administrators have an incentive to use their maintenance budgets to cover other expenses, secure in the knowledge that taxpayers will cover any gap.
Lavishing even more money on this fundamentally broken system, whether borrowed or taxed, is not going to rescue us from Mr. Obama's Great Malaise. True stimulus requires permanent simplifications in the tax code and a regulatory overhaul designed to reduce uncertainty and encourage investment. Keynesian tax-and-spend programs borrowed from Jimmy Carter will only increase our already unsustainable debt levels. This country needs real change.
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