Inefficient Public Schools

We all know that the Public School System is a well practiced money waster. Cape Diem, however, has run some numbers on just how much money they waste and produced a series of posts on the subject.

Here he points out that spending per student in constant dollars has grown by 10x since 1929. But this post shows where that money is being spent. Quoting Cato's Saving Money and Improving Education, he notes:

Student enrollment in public schools grew by 13% between 1979 and 2000. During the same period the total number of school employees grew by 61%, and the number of teachers grew by 35%. Nationally, public schools now have about 1 employee for every 8.1 students, and teachers make up only 40% of total school employees

As a side note, my favorite part of the post is the comparisons he makes at the end.

1. The Chicago Board of Education, which has 3,300 employees, is larger than the entire Japanese Ministry of Education.
2. The New York City public schools system has 250 times as many administrators as the New York Catholic school system (6,000 administrators in public school system versus 24 in Catholic school system), even though New York public schools have only four times as many students as the Catholic schools.

In this final post, he shows that because Public Schools have so many more administrators than teachers, they cost much more per pupil than their private counterparts. In contrast to the common perception that private schools are elite organizations awash with old money to trow at their privileged students, they operate with budgets of, on average, 1/3 to 1/2 the size per student.

Average private school tuition ($6,600) was about 1/3 less than the spending per pupil in public schools ($9,620) in 2003-2004 (the most recent year available), and average Catholic school tuition ($4,254) was less than half of public school spending per student.

Not only was the average private school tuition between 1/3 and 1/2 less than the cost per public school student, the private schools had on average 18% more teachers per 1000 students (72.25 in private schools vs. 61 in public schools) in 2003-2004.

Yet our money continues to be funneled into the Public Schools, reinforcing their failure with increased spending. If parents were free to spend that money on the school of their choice they could procure a better education for their children while saving the taxpayer a whole lot of money.

If Our Prisons Were a Corporation, It Would Be Bigger Than Detroit and Wal Mart

From a Reason Post:

We have a corrections sector that employs more Americans than the combined work forces of General Motors, Ford, and Wal-Mart, the three largest corporate employers in the country, and we are spending some $200 billion annually on law enforcement and corrections at all levels of government, a fourfold increase (in constant dollars) over the past quarter century

I am stunned. I just never thought about the shear numbers of people we have to pay to keep dangerous stock traders and dope smokers off the streets.

And You Thought The Post Office Overcharged

From Bloomberg:

A small South Carolina parts supplier collected about $20.5 million over six years from the Pentagon for fraudulent shipping costs, including $998,798 for sending two 19-cent washers to an Army base in Texas, U.S. officials said.

The company also billed and was paid $455,009 to ship three machine screws costing $1.31 each to Marines in Habbaniyah, Iraq, and $293,451 to ship an 89-cent split washer to Patrick Air Force Base in Cape Canaveral, Florida, Pentagon records show.
...
The scheme unraveled in September after a purchasing agent noticed a bill for shipping two more 19-cent washers: $969,000. That order was rejected and a review turned up the $998,798 payment earlier that month for shipping two 19-cent washers to Fort Bliss, Texas, Stroot said.

HT Cato

DC Education Spending

Great post from Classically Liberal about DC public school spending. I highly recommend reading the whole thing. Besides the typical stories about spending millions to employ useless people for political reasons and unions demanding free money in exchange for political support at the cost of actually teaching children anything, for me the most interesting thing was the cost of private schools in the District.

St. Gabriel School has a tuition of $4,500. The more prestigious German School in the suburbs charges $10,000 per year. The most expensive, elite private school in the city, St. Albans charges $26,500 per year.

The most expensive school in DC is $26,500 per annum. The budget for the public schools comes to $20,000 dollars per student. DC could eliminate the public school system, send every student to a "prestigious" school in the suburbs, and still save $10,000 per student per annum.

Of course every year politicians campaign for more money for schools. As CL observes,

Markets reward solutions with profits. Politics is used to address “problems”. The more problems you have the more programs and subsidies that you qualify for. The nature of political financing is perverse. It rewards dysfunctionality far more than efficiency.

Yet some people hold up our public education system as a model to be extended to health care. After all, it worked so well for our "most precious resource."

Back To Work

Our reader(s) may have noticed a lack of diversity in post authors over the last few weeks. I have been unavoidably preoccupied in recent weeks with the process of preparing for, joining, and adjusting to, the married state. I apologize for my lack of dedication, and will now attempt to throw myself back into my duties with all due diligence.




Thank you.

How Much Is 49 Billion, Anyway?

Last week, I mentioned that the Federal Government took in $49 billion in taxes in one day, or roughly the GDP of Costa Rica. The Club for Growth has done some more research, and lets us know that:

The ENTIRE Federal budget didn't surpass that one day income tax receipt total until 1952. Think about that. The individual income tax receipts in one day last week were greater than the entire budget of 1951.

The week's individual income tax receipts exceeded all Federal spending until 1963.

Brian Wesbury estimates total "federal receipts at about $390 billion in April. This would be the largest tax take for any month in American history, up 25% versus last April, and up 18% versus the previous record high in April 2001."

Federal spending didn't top $390 billion until 1977.

I sure hope everyone is happy with what we have bought ourselves with that much money. Oh, wait, you didn't get anything you wouldn't have gotten in 1950?

BREAKING NEWS: Government Wastes Stuff

Angry Bear ("Slightly left of center economic commentary") has a post up where in they express shock and amazement that the federal government wasted untold millions of dollars in aid after Katrina. It consists mostly of quotes from this Washington Post article by John Solomon and Spencer S. Hsu.

Allies offered $854 million in cash and in oil that was to be sold for cash. But only $40 million has been used so far for disaster victims or reconstruction, according to U.S. officials and contractors. Most of the aid went uncollected, including $400 million worth of oil. Some offers were withdrawn or redirected to private groups such as the Red Cross. The rest has been delayed by red tape and bureaucratic limits on how it can be spent.
...
In one exchange, State Department officials anguished over whether to tell Italy that its shipments of medicine, gauze and other medical supplies spoiled in the elements for weeks after Katrina's landfall
...
Overall, the United States declined 54 of 77 recorded aid offers from three of its staunchest allies: Canada, Britain and Israel, according to a 40-page State Department table of the offers that had been received as of January 2006.

It continues to amaze me when people continue to be amazed by the incompetence of government. Of course this is blamed squarely on Bush and his administration, and perhaps his officials are more incompetent than the average bureaucrat, but the failure of massive government projects is nothing new, and will continue no matter how much we will them to work, or how many good intentions we have.

The same people (although perhaps not Angry Bear, they seem to be sort of free market) who now bemoan this latest tale of waste and tragedy will soon begin calling for a new program to prevent school shootings, drug use, poverty, splinters in school children, giving offense to the cross-eyed, and reality television. When these programs fail, they will respond that, with just a few billion more dollars, it would have worked.

Tax Receipts

From the Club for Growth:

The federal government set a new one-day record yesterday for personal income tax collections. They received $49 billion. That's roughly the GDP of Costa Rica.

Wow, that means our government spends way too much (we are still in a deficit), our economy is booming (since the take is a percent of income), and we are overtaxed (which I take as a given).

Resources Wasted on Taxes

Americans wasted 6.65 billion hours on their taxes this year. That is about 760,000 years. I say wasted because those hours did not produce anything of value. At all. It was a dead weight on society. This is one (and only one) of the reasons I dream of having one of those "taxes on a post card" plans implemented.

Of course all government spending is a dead weight on the economy. Some expenditures may be necessary (I am a libertarian, not an anarchist), but that does not make them productive. A police force may protect private property (when not confiscating it) and allow free interactions in a more organized and efficient way than would be possible in a dystopian, post-apocalyptic society, but other than the similar services provided by the justice system and military and maybe a few others, government expenditures are always a transfer of resources from those who own them to those who don't, usually with the result that they are used less efficiently than they would have been, and always with the overhead costs of government bureaucracy. Unless we evaluate those costs against the benefits program, we will continue to waste ever more of our efforts, resources, and time feeding monster that is our government.
HT Club for Growth

Request for Proposal

One concept of government waste holds that the best way to prevent overspending is oversight and a clearly stated set of requirements. For instance, if the navy wants a new type of ship, it seeks out proposals for concepts, then proof of concepts, then prototypes. The idea is that by choosing very carefully what to spend the money on, they will save money and get the best product. This is not a bad idea and makes a lot of sense, so much so that it is used by every large organization in the world. For the Federal Government, however, the end result is that so much time and effort is spent on the selection process that for anything less than $100 billion worth of warship, it would have been cheaper to just take the first bid and save 15 years of paperwork.

This is well illustrated by the requirements for paper towels.

C-fold paper towels provided shall have a minimum unfolded width of 10.25 inches, with a permissible variance of plus .25 or minus .50 inches, and maximum length of 14 inches.

Each towel shall have a minimum area of 130 square inches. The folded width of each towel shall be 3 inches, with a permissible variance of plus .25 or minus .50 inches."

The rate of absorption of paper towel material provided shall not be greater than 20 seconds for the absorption of 0.1 milliliter of water on any representative sample of paper towel as submitted."

The color of the paper towel shall be white, with a minimum brightness rating of 70 when measured in accordance with the requirements of test method T-452 of the Technical Association of the Pulp and Paper Industries."

The minimum thickness of 12 single plies of the paper towel material provided shall be 0.070 inch when measured under an applied pressure of 0.5 psig.

I would think that the best course of action would be to just sign a contract with a cleaning company and be done with it. I shudder to think of the hours of government employee time wasted drafting, revising, approving, implementing, overseeing, and enforcing this.

HT Cato-at-Liberty

Bureaucracy for Bureaucracy's Sake

Unbelievable.

Last year, the Bush Administration decided to dispense with about half the paperwork involved in [forest plan] revisions by not requiring [the Forest Service] to write separate environmental impact statements for each plan.

Though the plans do nothing, the Sierra Club and other environmental groups took this decision to court. Last week, a federal judge in California ruled that, even though the plans themselves were not an “action,” the rules for how the plans were written are an action. So the judge tossed the rules on the ground that the Forest Service had not written an environmental impact statement for them.

Any sufficiently advanced bureaucracy is indistinguishable from molasseses, and just as deadly.

McCain-Feingold Review

Cato-at-Liberty has a nice article on McCain-Feingold and it's effects on the last election. It makes a number of interesting points about a law so sketchy that was signed by the president with the understanding that it would be found unconstitutional later.

Ornstein and Corrado suggest the law reduced the number of negative ads. But that’s pure speculation. Judging by the complaints of the “reform community,” campaigns remain as negative as ever. Of course, negative advertising is good for American democracy, and in any case, advocates always said campaign finance regulations concerned money and not the content of speech. If BCRA really sought to improve the content of speech, doesn’t that mean the law violated the First Amendment from the start?

The Pain of Parting with Cash

The Motley Fool has an interesting article on neuroeconomics research that examines the "pain" one feels when spending money and the difference between paying with different methods. Not terribly enlightening, but a quick, interesting read.

Spending ≠ Success

Just a quick response to Ken's post about DC literacy rates.

1. DC spends more per pupil than any state in the Union (as of 2005 roughly $11,300)
2. DC public schools perform worse than any state in the Union

While I would hesitate to claim this as evidence that more spending hurts children, I would point to it as evidence that more spending is not the panacea for all education woes.

EDIT: There was a comment that I needed to adjust for regional cost differences. If you click the link in point 1, they claim the numbers are already adjusted.

Tax Take

How much have the Bush Tax cuts cost the government? We had a balanced budget, then we got a tax cut, now we have debt. So how much are the cuts costing us? Don Boudreaux, GMU economist, gives us this little gem over at Cafe Hayek.

Uncle Sam today takes from Americans' pockets more than $2.5 trillion per year. In real dollar terms, this sum is 50 percent higher than what Bill Clinton's government took during its first year in office and 25 percent higher than what George W. Bush's government took during its first year.

We had a balanced budget at the end of the Clinton years. We now bring in 25% more money after inflation. We now have a huge debt. My guess? Spending went up.