For John, BLUF: A suggestion of a war on the young by at least one state legislature. Nothing to see here; just move along.
Government spending stories just get better and better. Here is columnist Walter Russell Mead in a piece titled "Illinois’s Blue Robin Hoods Stealing from the Young to Give to the Old". The quote lifted by Law Professor Glenn Reynolds is:
After pension reform went down in flames last week, Illinois moved to Plan B: war on the young. Governor Pat Quinn’s administration claims that the upcoming budget will include major cutbacks on state services to make room for a $1 billion increase in pension spending. Most notably, education spending will decrease by $400 million, which would make 2013 the third straight year in which education spending has dropped. . . . Sticking it to either group, the young or the old, isn’t appealing, but the boomers are politically organized and better positioned to fight for their interests, particularly because powerful unions are on their side. The young, by contrast, are among the least politically active groups in the country, making them much easier for politicians to ignore. Illinois has obviously chosen the path of least resistance.I am prepared to believe that the population in Illinois is shrinking, at least in terms of children, but still, $400 million is a chunk of change. If we assume a teacher's salary, burdened, is around $100,000, that is some 4,000 people (I am assuming the number of administrators remains constant.) Given 25 children to a classroom, that might be 100,000 less children being educated.
This web site says that from 2010 to 2012 the overall population of Illinois went up almost 40,000, but for a sample of ages (8 through 12) most cohorts dropped about 1,500 in number. Assuming that is a good average, then maybe 21,000 less students. I am not sure it adds up. But, I am sure they know what they are doing.
With the number of older people growing proportionately to those of a working age, and with more working age people dropping out of the work force, we face a problem. At what point will the ratio shift to the point that working folk will no longer be able to sustain those who are not working? And, if we are spending less on educating our youth, will they be able to get the jobs needed to help sustain the rest?
So what would be the "socially popular" solution? Systematically reduce the population that was in various and sundry ways "promised" a retirement benefit? While I am not unsympathetic to tomorrow's adults, I am less enthused about the breast beating over reductions in the amount of money spent on education today. We spend more money than every before and get less and less for the expense. Our relative standing in the world in the areas of math and science continues to erode almost arithmetically. I know...if we just spend more money, it will all get better.
ReplyDeleteThe issues of paying for retirement and paying for education are apples and oranges in operational terms. Perhaps at the highest levels of budget planning, there is a one to one competition, but then, part of the budget process is getting the biggest bang for the buck. Before we flush more money down the education drain, we need to stand back and take a serious look at not HOW things are taught, but rather WHO is teaching and WHAT is being taught. We spend millions on fancy computer software because...well...we live in the computer age...but we produce functionally illiterate graduates at all levels of education. When was the last time a high school student....not to mention a college student....ever heard of diagramming a sentence? We worry more about self esteem than we worry about self sufficiency.
Quit going after old folks by laying on the big guilt trip and start going after higher quality of the things we spend money on.....education.
I expect those pension payments are to reduce the unfunded liability of public retirement. In Massachusetts that is also a problem, but some steps taken in the past (increasing employee contribution rates) have somewhat stabilized the pension system. For Lowell the payment to the pension system is still a large chunk of the operational budget, but it has somewhat stabilized in recent years and has a target date of about 20 years to close the gap to zero.
ReplyDeleteThe question is - has Illinois taken a similar step on increasing the contribution rate of public workers?
A highly educated working demographic isn't enough, if the society doesn't have enough of them.
ReplyDeleteSingapore aims for total fertility rate of 1.4 or 1.5 from 1.28:
"DEPUTY Prime Minister Teo Chee Hean said today that with the enhanced $2 billion Marriage and Parenthood package, the Government hopes to move the total fertility rate up to 1.4 or 1.5"
""And we hope that in the longer term, of course that we can get up to 2.1. But looking at the environment and what other countries and cities are facing, that really is a work-in-progress which will require a long time," he said."
Their retirement system is considered a model...
ReplyDeleteSince the early 80s, Singapore takes a 1/3 of your income solely for the purpose of retirement.
" Singapore makes no promises but instead requires all citizens to save up to 36 percent of their income for their own retirement and health care. The government invests the savings in stocks and bonds; the money is not used for current expenditures."
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Where is Al Gore and is lock box for Social Security?
Blame Bush.