International School Comparisons

Few are more critical of the current U.S. public school system than myself.  However, that criticism needs to be tempered with a measure of reality.

The problem with articles such as this one is that they are comparing apples to oranges.  When comparing school districts in the U.S. to those of the "best schools" internationally, we must account for the differences in who actually is allowed to receive an education.

In many of those countries with the "best schools", low performing students are weeded out before they ever reach high school.  In the U.S., as long as someone has an active heartbeat, they are allowed to attend school.  The more egalitarian approach the U.S. has towards education guarantees our averages on standardized tests will fall below those nations who refuse to allow low performing students in their doors.

Let's not be disingenuous in our criticism.  I may be a critic, but I'd like to believe I'm an honest one.

Government Spending and Poverty

This article from the National Center for Policy Analysis (NCPA) makes a point that often is missed in discussions of social welfare policy discussions.  It points out that although we have spent trillions now on various programs to assist the poor, their effect on the poverty rate is negligible at best.  Not only has the poverty rate remained consistent (between 12% - 15%) since the institution of President Lyndon Johnson's "Great Society" programs in the mid-1960s, over the last 20 years it has mirrored the jobless rate.

Think about this for a moment.  In his book, Issues in Economics Today, Robert Guell notes that the poverty gap (the amount of money it would take to bring every household under the poverty line above it) is $79 billion.  However, we spend $646 billion on various federal, state, and local programs.  In addition, Americans generously gave another $298 billion to charitable organizations.  So the total spending to alleviate poverty in the U.S. is between $646 billion and $944 billion (not all charitable donations go to assist the poor).

And yet, the poverty rate remains essentially unchanged.  Why is this?  And why do we spend over $650 billion to address what is a $79 billion problem?  Guell offers the following explanations:

• We deny those who are poor the opportunity to choose what they need because we don't trust them to make good decisions.  Says Guell, "Voters have made it clear they do not trust the judgment of the people who receive government benefits concerning what goods they buy.
• People are more concerned with the welfare of needy children, than with the welfare of adults.  Guell notes that almost all programs require a child to be in the household in order to receive benefits.
• Some benefits are designed more to make those providing them feel good about themselves than to actually benefit the recipients.
• We provide assistance to some families who are above the poverty line
• We have an inadequate definition of poverty.  The Heritage Foundation has conducted extensive research on poverty in the U.S. and has found:
• 43% of "poor households" own their own homes
• 80% of the poor have air conditioning
• 75% own their own car; and 31% own two or more cars
• Nearly 1 million "poor" families own homes worth more than $150,000
• The hundreds of thousands of people in the U.S. who have little income but are worth hundreds of thousands of dollars (in some cases worth millions) are considered "poor"

Another important reason I believe that the poverty rate remains relatively the same is because we have fundamentally altered the relationship between benefactor and recipient.  Usually, when you receive assistance from a friend or family member, you feel the urge to improve your circumstances so you don't have to ask again.  It's one way we show our gratitude for their generosity.  It's the mentality of, "I'm going to take your generosity and improve myself so I don't have to burden you again."

However, when the benefactor is a faceless bureaucracy that you are not concerned about continuously receiving assistance from (because it has an endless supply of money) that incentive to improve one's circumstances is reduced.  There's no relationship between giver and receiver, and hence no sense of obligation to stop asking for assistance.

Another important aspect that arises from this changed relationship is the notion of "entitlement."  Very few of us would ever assert we are entitled to a share of a family member or friend's income or wealth.  However, when it's the government doing the giving, it's easier to lay claim to some entitlement of income.  Those who receive these benefits don't develop a sense of gratitude towards the taxpayers who fund government programs, but rather a sense of entitlement to the continued support develops.

So not only does the current system have efficiency problems as noted by Guell, it also has a conceptual problem created by changing the relationship between those that provide the assistance and those who receive it.  Both sets of issues must be addressed if we want to see a significant reduction in poverty.