Unconventional monetary policy—characterized by “zero interest rate policy” (ZIRP) and “quantitative easing” (QE), along with macro-prudential regulation—has increased the power of central banks in the United States, Japan, and Europe. When the Danish newspaper Jyllands-Posten published the cartoons of the prophet Muhammad in 2005, Denmark found itself at the center of a global battle about the freedom of speech.
The Cato Institute has released its 2015 Annual Report, which documents a dynamic year of growth and productivity. Well, it’s obviously “a”, and not likely to be “b”, as Charles Koch writes very clearly. The current National Assessment is an incredible exaggeration of the effects of climate change on the United States. The USGCRP is just about every organization that consumes an oodle of the multibillion dollar pie. One thing that’s apparent in the new Assessment is that federal funding is awarded preferentially to those who thrive in a data-free environment.
The “Transportation” chapter of this climate horror picture show asserts that pernicious climate change is “reducing the reliability and capacity of the U.S.
The fact of the matter is the vast balance of evidence is that the current National Assessment is an incredible exaggeration of the effects of climate change on the United States. States’ new budgets are providing less per-pupil funding for kindergarten through 12th grade than they did six years ago — often far less.
At least 35 states are providing less funding per student for the 2013-14 school year than they did before the recession hit.
Where funding has increased, it has generally not increased enough to make up for cuts in past years. Restoring school funding should be an urgent priority.  The steep state-level K-12 spending cuts of the last several years have serious consequences for the nation.
As of August 2013, local school districts had cut a total of 324,000 jobs since 2008.[4]  These job losses have reduced the purchasing power of workers’ families, in turn reducing overall economic consumption, and thus deepened the recession and slowed the pace of recovery. The cuts undermine education reform and hinder school districts’ ability to deliver high-quality education, with long-term negative consequences for the nation’s economic competitiveness. This substantial reliance on state aid means that cuts to state formula funding force local school districts either to scale back the educational services they provide, to raise more revenue to cover the gap, or both. In addition to the funding they distribute through general aid formulas, states may or may not use separate allocations to fund items such as pupil transportation, contributions to school employee pension plans, and teacher training.  Those allocations typically are smaller than general aid funding. For 48 states, the necessary data are available to compare this year’s allocations for the first category of funding, general formula funding with funding before the recession hit.[6]  The 48 states included in this analysis are home to 97 percent of the nation’s schoolchildren.
More than two-thirds of states — 34 of the 48 states analyzed — are providing less per-student funding for K-12 education in the current 2014 fiscal year than they did in fiscal year 2008. In more than one-fourth of states, or 14 of the 48, per-student funding is 10 percent or more below pre-recession levels. The two states with the deepest cuts — Alabama and Oklahoma — each have reduced per-student funding by more than 20 percent from pre-recession levels.
In 15 states, per-student funding is lower in the current fiscal year (2014), than it was in the last fiscal year (2013), after adjusting for inflation. States cut funding for K-12 education — and a range of other areas of spending including higher education, health care, and human services — as a result of the 2007-09 recession, which caused state revenue to fall sharply.


States’ large cuts in education spending have serious consequences for the economy, in both the short and long term. State education cuts are counteracting and sometimes undermining reform initiatives that many states are undertaking with the federal government’s encouragement, such as supporting professional development to improve teacher quality, improving interventions for young children to heighten school readiness, and turning around the lowest-achieving schools. State education budget cuts prolonged the recession and have slowed the pace of economic recovery by reducing overall economic activity. Local school districts have eliminated 324,000 jobs nationally since July 2008, federal data show.
In the long term, the savings from today’s cuts may cost states much more in diminished economic growth. Minnesota withholds (or delays) a portion of state aid payments to school districts until the subsequent fiscal year. New York’s numbers reflect school districts’ fiscal years (which end June 30), rather than the state’s fiscal year (which ends March 31). In Vermont, school property taxes are state taxes and are deposited into a state Education Fund, which covers the cost of pre-K-to-12 public education. As states prepare their budgets for the coming year, they face the challenge of reinvesting in public higher education systems after years of damaging cuts — the product of both the economic downturn and states’ reluctance to raise additional revenues. States are spending $2,353 or 28 percent less per student on higher education, nationwide, in the current 2013 fiscal year than they did in 2008, when the recession hit. In many states the cuts over the last five years have been remarkably deep.  Eleven states have cut funding by more than one-third per student, and two states — Arizona and New Hampshire — have cut their higher education spending per student in half. Increased tuition.  Public colleges and universities across the country have increased tuition to compensate for declining state funding. These sharp increases in tuition have accelerated longer-term trends of reducing college affordability and shifting costs from states to students.
But policymakers will need to make sound tax and budget decisions in the coming years if they are to renew state investment in higher education.  Significant investments in higher education in most states may require raising new revenue, as state revenues have yet to recover from the recession and a wide range of other crucial public services also require reinvestment after years of deep cuts. Conversely, states that enact deep tax cuts will make it much more difficult to rebuild their higher education systems and jeopardize their ability to compete for the jobs of the future.
The cuts have resulted from state and federal responses to the deep recession and continued weak recovery. Thanks to the boost in federal assistance, the College Board calculates that the annual value of  grant aid and higher education tax benefits for students at four year public colleges has increased by an average of $1,410 in real terms since the 2007-08 school year, enough to offset over three quarters of the $1,850 tuition increase paid by the average student nationwide.[19]   But since the sticker price increases have varied so much while federal grant and tax-credit amounts are basically the same across all states, students in states with large tuition increases (such as Arizona or New Hampshire) undoubtedly have borne a much higher share of the increased cost, while students in states with smaller tuition increases may have realized net reductions in cost. The University System of Louisiana furloughed 727 employees, laid off another 210 staff and faculty members, and cut 217 academic programs. The University of North Carolina-Chapel Hill eliminated 493 positions, cut 16,000 course seats, increased class sizes, cut its centrally supported computer labs from seven to three, and eliminated two distance education centers. This trend has meant that students have assumed much greater responsibility for paying for public higher education without those institutions receiving more money to fund quality improvements. Reinvesting in public higher education should be an urgent priority for policymakers who are concerned about the long-term economic success of their state and its residents.  Diminished educational resources and rising tuition at the nation’s public colleges and universities have serious consequences for students, their families, and the broader economy. The reduced college access and reduced graduation rates that research suggests are likely to result from budget cuts affect more than just the students, because college attainment has grown increasingly important to long-term economic outcomes for states and the nation. This research suggests that states should strive to expand college access and increase college graduation rates to help build a strong middle class and develop the skilled workforce needed to compete in today’s global economy.  It suggests further that the severe higher education funding cuts that states have made since the start of the recession will make it harder to achieve those goals.


States may also wish to consider more funding for higher education as an alternative to new tax cuts.  This may be particularly true in a number of states that have made deep cuts to higher education funding and where policymakers are proposing deep new tax cuts that would lock in — even add to — those higher education cuts. Florida governor Rick Scott, for example, is calling for $135 million in business tax cuts at a time when Florida’s higher education funding stands 41 below pre-recession levels, and tuition at its public four year colleges has increased by 67 percent over the last five years.  Other states that have made deep cuts to higher education funding and yet are now considering tax cuts include Idaho, Indiana, Kansas, Louisiana, Nebraska, New Mexico, North Carolina, Ohio, South Carolina, and Wisconsin.
Tax cuts are often sold as a recipe for economic growth.  But to the extent that tax cuts prevent investments in higher education that would increase access to college, improve graduation rates, and reduce student debt, their net effect could be a drag on the economy. Economic growth in and of itself will not be sufficient to propel higher education funding to previous levels any time soon.
In the new issue of Cato Journal, contributors revisit the thinking behind unconventional monetary policy and the “new monetary framework,” make the case for transparent monetary rules versus foggy discretion, and point to the distortions generated by ultra-low interest rates and preferential credit allocation. The paper’s culture editor, Flemming Rose, defended the decision to print the 12 drawings, and he quickly came to play a central part in the debate about the limitations to freedom of speech in the 21st century.
The thousands of individuals who contribute to Cato are passionate about freedom and committed to ensuring that future generations enjoy the blessings of liberty, unencumbered by an overreaching state that seeks to control their lives. It is to provide cover for a massive regulatory intrusion, and concomitant enormous costs in resources and individual liberty. Michaels is Director of the Center for the Study of Science at the Cato Institute and a senior fellow in research and economic development at George Mason University. Ellerson, American Association of School Administrators, Weathering the Storm: How the Economic Recession Continues to Impact School Districts, March 2012, p.
Carnevale, Nicole Smith, and Jeff Strohl, “Help Wanted: Projections of Jobs and Education Requirements through 2018,” June 2010. Exploring the Impact of Contingent Faculty on Undergraduate Education.” The Review of Higher Education, Volume 30, Number 2, Winter 2007, pp. Carnevale, Nicole Smith and Jeff Strohl, “Help Wanted: Projections of Jobs and Education Requirements Through 2018,” Georgetown University Center on Education and the Workforce, June 2010, p. In The Tyranny of Silence, Flemming Rose provides a personal account of an event that has shaped the debate about what it means to be a citizen in a democracy and how to coexist in a world that is increasingly multicultural, multireligious, and multiethnic. This is Cato’s optimistic vision for the future, and it would be unimaginable without the Institute’s longstanding partnership with its Sponsors. Instead, their draft “National Assessment” of climate change in the United States flogs more “extreme” climate in just about every one of the 30 chapters in this 1200-page doorstop. When you produce more stuff (increasing GDP), there’s more stuff to get hit by bad weather.
History tells us that when scientists willingly endorse sweeping governmental agendas fueled by dodgy science, bad things soon happen. Dowd, “The Impact of Undergraduate Debt on the Graduate School Enrollment of STEM Baccalaureates,” The Review of Higher Education, Volume 35, Number 2, Winter 2012, pp.



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