There is much that a free people can and should do through government to encourage the unity of the nation, establish justice, provide for the common defense, promote the general welfare, and secure the blessings of liberty. There is also much that a free people must do for these purposes as individuals, families, neighborhoods, and other private institutions. Abraham Lincoln had it right when he said in 1864 that “The legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all, or cannot so well do, for themselves, in their separate and individual capacities.” A central contribution that government should make to promote the general welfare is to invest in public education.
Ronald Reagan had it wrong when he said in his inaugural address in 1981 that “government is not the solution to our problem; government is the problem.” If he had meant to say that there are more important things in life than politics, and that politics cannot solve our most important problems, that would have been correct. Love, compassion, and civility enter our lives independently of the government. But that was not what Reagan meant. For more than a generation—under the spell of his antigovernment rhetoric—we have pursued policies that have neglected the positive and necessary things that government can and should do.
Two recent studies by C. Kirabo Jackson, Rucker Johnson, and Claudia Persico—available
here
and
here
—measure the long term impact of court-mandated school-finance reforms (SFRs). Their work demolishes the old right-wing mythology that spending on public schools doesn’t matter:
“In most states, prior to the 1970s, the majority of resources spent on K–12 schooling was raised at the local level, through local property taxes. Because the local property tax base is typically higher in areas with higher home values, and there are persistently high levels of residential segregation by socioeconomic status, heavy reliance on local financing enabled affluent districts to spend more per student. In response to lawsuits that identified large within-state differences in per-pupil spending across wealthy and poor districts, state supreme courts overturned school-finance systems in 28 states between 1971 and 2010, and many state legislatures implemented reforms that led to major changes in school funding. SFRs that began in the early 1970s and accelerated in the 1980s caused some of the most dramatic changes in the structure of K–12 education spending in U.S. history.”
“Our findings provide compelling evidence that money does matter, and that additional school resources can meaningfully improve long-run outcomes for students. Specifically, we find that increased spending induced by SFRs positively affects educational attainment and economic outcomes for low-income children. While we find only small effects for children from nonpoor families, for low-income children, a 10 percent increase in per-pupil spending each year for all 12 years of public school is associated with roughly 0.5 additional years of completed education, 9.6 percent higher wages, and a 6.1-percentage-point reduction in the annual incidence of adult poverty.”
Clearly, increased spending on K-12 public education is in order and should form a vital part of a Freedom Budget for the 21st century—a budget for the poor, the working class, and the middle class. In an earlier newsletter, I advanced the idea of placing a 1% tax on short-term debt (debt with a maturity of less than a year) so as to diminish overleveraging of the kind that corporate giants indulged in before the Great Recession. I noted Luigi Zingales’ calculation that this tax could be expected to raise $21.5 billion dollars annually from the nine largest institutions alone. I favor busting up the “too big too fail,” but would retain this tax to help discourage excessive leveraging even after they are broken up. The monies raised, I suggested, could be used to begin to develop a national Montessori-style pre-K for all. This should also be part of the new Freedom Budget we need to build a consensus behind in our country.
