Friends of mine often marvel at how I can oppose the Obama Administration's efforts to ease the burden of student loans, lower unemployment and prevent the layoff of teachers by providing $60 Billion to cash strapped school districts. How can I oppose initiatives that will provide immediate relief to economically burdened individuals, organizations and communities? To better understand the "method of my madness," I turn to the economist, Henry Hazlitt, who offered insight into economics in the following phrase:
"The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."
In other words, when we examine the indirect costs and unintended consequences of these programs, their value comes into question. When we step back and carefully examine the status of school districts, we find that their dire fiscal state is the end result of of poor policies, such as unsustainable pension systems and bloated, inefficient administrations. Contrary to most progressive narratives, the issue has not been a lack of funds; the most egregious example being Washington DC, whose dismal school system spends $16,000 yet produces some of the lowest test scores in the country.
Left to their own devises, most organizations, be they of the public or private sector, will only embark on serious reform when they face a fiscal crisis. So, while the Obama Administration's bailout may help spare these districts short term pain, it has allowed them to avoid undertaking needed reforms to create fiscally sustainable policies. Efforts to create a leaner, more effective school systems will be put off and most perversely, the Obama Administration will be hailed by the economically illiterate as having saved or even created new jobs.