2+2=5, Or the Federal Budget

The latest Pew Poll shows that, surprise, most Americans don’t have a clue how the federal budget works. That’s okay, though, because I’m also pretty sure our elected officials don’t understand the budget either.

In our defense, budgets are complex things once you turn 18 and get all grown up. For my kids, handling money is relatively easy. Money comes in and money goes out. In large part, these are fixed things. My son gets a budget allotment from us and he works at Outback a set number of hours each week. He can estimate his income within a few dollars. His expenses depend on his personal choices. There are no long term deficits (housing), mid-term deficits (cars), and short term contracts (phones) to worry about. Recurring costs are minimal, mostly because we don’t charge our kids rent or utility costs (although we did once start charging my older son a dollar every time his shower lasted longer than 12 minutes).

Our household budget gets a bit more complex. We have fixed costs (house, car, phone, insurance) and anticipated costs (utilities, food, gas, cable). These are usually about the same each month. Fortunately, we also have a fixed income. We know within a few pennies how much money we will make every month. Obviously, that means when we buy the house, car, etc, we know how much we have to spend. We also, though, have variable costs: medical, family emergency, total inability to cook night, increased alcohol consumption (based on too many inability to cook nights), and vacations (to try to stem the previous costs). Still, all in all, we know each month how much money will come through the door and about how much will go out. We also know, though, that the income can go up and down (based on taxes, job-related issues) and the costs can go up or down (pay off the car, insurance rates). The complexity is that we do, in some way, have to plan for those contingencies, knowing we have to make some purchases based on potential future expenses.

Naturally, that means I should understand the federal budget. Except that I don’t. A federal budget has variables that seem almost infinite: it is my budget on steroids. The amount of money coming in can depend on natural disaster, terrorist attacks, consumer confidences, unemployment rates, world markets. The cost has just as many variables. Economics, I tell my son, is like creative writing with numbers. The experts are all just guessing (educated guesses for sure) but they can only anticipate. And they study this everyday.

That leaves the rest of us guessing (often not educated). Let’s start with the obvious reasons we are so confused:

1. I can’t count to a trillion (or a billion, and I have my doubts about the number of zeros in a million). The number one reason most Americans are stupid about the budget is that the numbers we discuss are incomprehensibly large. The well meaning among us can talk all day long about decreasing spending and creating efficiencies,  arguing that cutting aid to Africa and reducing the federal work force will save millions of dollars. The problem, of courses, is that aid to Africa and the size of the federal work force isn’t driving the deficit. And, hard as it is to believe, saving a million dollars (or even 10 million) is a bit like arguing that saving $10 a month will let you buy that condo in Maui. Because we don’t quite get the numbers, we keep imagining we can reduce the deficit by cutting the low hanging fruit. We can’t. There isn’t enough fruit there and we consistently under appreciate the importance of that money. Cutting aid to Africa will save us money, until the disease and disharmony requires a larger response. Cutting federal workers will save the government money, but the service they provide doesn’t end. Outsourcing simply transfers the cost. (Think of it this way–if your city outsources garbage collection, that simply means you won’t pay your city to collect the garbage. You will still pay for garbage collection, but you will pay a for-profit company. They might be more efficient by paying workers less money with fewer benefits. That short term savings becomes a long term cost in medical care, retirement, etc.)

2. Americans aren’t really ready to make the difficult choices to cut programs that will reduce the deficit. We have the greatest military in the world and we damn well should based on the money we spend. The reality is that the military-industrial complex has done exactly what President Eisenhower warned–it grows and consumes. I love freedom, and I know that freedom isn’t free, but I also know that our military expenditures have taken on a life of their own. Simply put–we must reduce our military footprint, reduce our reliance on increasingly expensive technology, and stop being the world’s police. If we aren’t willing to do so, then we have to accept an increasingly expensive military. In other words, we need to decide that we can have a less expensive version of freedom. And by all means, let’s stop subsidizing wealth for Lockheed Martin’s executives.

3. Our social programs must change. Social security is important and vital to the well-being of an aging work force. We must continue to support the social safety net for those workers whose lifetime profession didn’t include 401(k) programs, pensions, and other job related retirement accounts. American cannot be a country that abandons laborers whose jobs depend on physical abilities that fade over time, pushing them to either lower paying jobs or retirement. Doing so requires that we stop trying to treat all retirements equally. The social security age should be raised for certain professions and certain income levels. They guy down the street who runs a backhoe and digs ditches probably has a more difficult time doing his job at 62 than the college professor living in my house. More importantly, he doesn’t have an employer matching his retirement fund dollar for dollar. Index for income. We all benefit from putting money into Social Security because no one really wants a bunch of old, poverty-stricken homeless people running around. Or moving in with us.

4. Medical costs are out of control. Read Steven Brill’s Bitter Pill: Why Medical Bills are Killing Us. Let’s stop fighting about who pays and worry about why we are paying so much.

5. More revenue is not evil. Federal taxes are at their lowest levels in years but federal tax law is more confusing than a physics dissertation to an art major. We can increase revenue and stabilize revenue pretty easily if we could, and I know this is a radical concept, consider the greater good and not simply our own self-interest. Let’s start with two basic concepts: everyone pays something and we eliminate loopholes. We do this via either a national sales tax. Want to pay less in taxes, buy less stuff. The idea that the rich would reduce spending misunderstand the rich. Bill Gates doesn’t live in a mansion because he has to. He lives there because it speaks to his wealth. A consumption tax would, in fact, allow us to budget based on 10 year spending averages. If we don’t like the consumption tax, then create a progressive flat tax: 0-20,000 pays 10%; 20,000-30,000 pays 15%, 30,000-40,000 pays 16% . . . You get the idea with a top rate at 25% for those making over $5 million. No caps. No loopholes. And no whining. If you are making $10,000, put some skin in the game. If you are making $10 million, you will not stop producing or stop pushing yourself to make money to avoid taxes. You live in the greatest country on the planet and you make $10 million because you live here. If you don’t like it, leave. Go try to be rich in Venezuela.

It’s either that or let’s make that 1 trillion dollar coin. Heck, let’s make two.


Digging in the Couch Cushions To Pay the Light Bill

inefficiency happensOne of the consistent complaints about higher education is our apparent inefficiency. Admittedly, there are some areas where we can cut costs, but there aren’t as many available efficiencies as our critics assume. If your university is like mine, we’ve endured about all the cuts we can handle: 17% last year, 10% the year before. Pretty soon you are past the fat and sawing the bone.

productivityseminarAny savings left on our campus involve buying cheaper toilet paper (or telling students to bring their own), asking staff to clean their own offices (bring your trash bags to work day!), or cutting whole programs out of the curriculum (Music programs are overrated!). We spend our time trying not to give up an arm and a leg while our legislature is pushing us to cut our nose off to spite our face.

Critics of universities like to attack diversity offices and multi-cultural affairs programs as if somehow cutting those programs would transform the university budget. Certainly, we see universities across the country building little mini-water parks on campus, increasing inter-mural programs, and installing climbing walls. Dorms, except at the elite private universities strangely enough, are increasingly posh. Gone are the days of closet sized cubicles and shared bathrooms. These one-time capital expenses are coupled with mid-level administrators whose salary and benefits are the fastest growing costs at a university. Perhaps, they say, you could live without such luxuries.

We could easily return to the days of dingy dorms and we could eliminate athletics, inter-murals, and other student services activities. No more weight rooms, climbing walls, or swimming pools. However, while it might surprise many of our critics out there, the largest portion of students who fail to finish school are those who are academically eligible. We lose more B and C students in any given year than any other cohort. It might also surprise some of our critics to find out that 18 year olds who feel disconnected, un-involved, and isolated tend to perform poorly in the classroom.

We might further note that as minority populations increase on college campuses and as diversity improves, there are tensions and difficulties. Put simply—these programs that seem so easy to attack often pay for themselves in recruitment and persistence toward degree. Students can go anywhere to earn a degree; universities are in open competition as they develop a campus culture. Our students aren’t,  as a colleague once told me, simply brains on legs. They are undeveloped frontal lobes with hormonal imbalances that make the federal debt look like a model of consistency. And they have to go to class, live with strangers, wonder why that girl across the room smiled at them, and figure out why that guy in the dorm ignored them last night. Part of the university life is, simply put, helping teach students how to live and providing support and resources along the way.

Faculty research is another easy target but the assumed savings aren’t really that great. Requiring that our colleagues at University of Texas or Texas A&M teach full loads won’t really save that much money. If it did, then tuition at some place like Angelo State (where we are all teaching a full load) would be dramatically cheaper. Eliminating research, however, misses the point. UT is UT because the faculty do ground breaking research. If that didn’t matter, Angelo State would have 50,000 students and UT would be struggling to grow.

Do we need another article on Shakespeare? No, but Rick Perry didn’t need to set up the Texas Enterprise Fund and we also don’t need to provide tax breaks to oil companies. Last time I checked they were doing pretty well for themselves. I also don’t need a rum and coke every night, but I’m sure everyone in my house is glad I get one anyway.

hamletThe Texas Enterprise Fund isn’t just about providing start up funds: it serves notice that Texas is a business friendly state. In much the same way, all research isn’t about practical, pragmatic application outside the classroom or university. A research project discussing Cormac McCarthy won’t save any lives. But, and here’s why we keep reading and studying literature, it might help someone understand her shared humanity and the research project itself demonstrates to our students the value of engaging in research, in seeking expertise, and in moving beyond simple (and sometimes simplistic) experiential knowledge. Actively engaging in research shows our students that we recognize “There are more things in heaven and earth, Horatio, / Than are dreamt of in your philosophy.” Being an informed citizen requires that we move outside our own knowledge base, seek out credible sources, and use our critical thinking skills to make decisions. College faculty practice what we preach.

What seems clear from the attacks on higher education is that we are mired in the tired arguments of the past. I care if my students gain skills and get a job after they graduate, but I am just as interested in the intangible, indirect benefits of the many things we do. As a faculty member, I am offering information, giving my students tools, showing a pathway that will allow my students to take that epistemological journey. I’m teaching them, as the biblical parable recommends, how to fish. As a university, we are offering our students a transitional space to grow intellectually and socially. It’s not the only way to do those things, but that doesn’t mean we shouldn’t do them.

Teaching and research are often inefficient human activities whose dividends are long-term positives. What might seem a waste today is a possible gain tomorrow, but we can’t offer people that path if we are spending all our time searching the couch cushions for enough change to pay the light bill.

Things I Read

And Things I Learned

Washington Monthly

Do I contradict myself? / Very well then I contradict myself, / (I am large, I contain multitudes.)

Joanne Jacobs

Thinking and Linking by Joanne Jacobs

Inside Higher Ed

Do I contradict myself? / Very well then I contradict myself, / (I am large, I contain multitudes.)

NYT > Politics

Do I contradict myself? / Very well then I contradict myself, / (I am large, I contain multitudes.)

Balloon Juice

Do I contradict myself? / Very well then I contradict myself, / (I am large, I contain multitudes.)

Dilbert Daily Strip

Do I contradict myself? / Very well then I contradict myself, / (I am large, I contain multitudes.)

The Full Feed from HuffingtonPost.com

Do I contradict myself? / Very well then I contradict myself, / (I am large, I contain multitudes.)