I have grown to despise the above cliche since moving to North Carolina. It seems like every public official uses it ad nauseum to describe cutting spending on education, and especially higher education. They even use it when pushing for more spending, which doesn't seem appropriate.
Yet I haven't heard the same officials use the phrase in one case in which it is highly appropriate--the raiding of the Escheats fund principal to pay for massive increases in student financial aid. The fund, which consists largely of unclaimed estates, is in violation of state statutes, according to state fund manager Shawn Wischmeier, who spoke at a Joint Financial Aid Committee meeting today. He said that the traditional investment strategy has been to include a mix of highly liquid public equities, somewhat liquid real estate, and highly illiquid private equities. State statutes mandate that the private equities be no more than 20% of the mix, and that has not been a problem--until now. The fund's principal has fallen from a high of $687 million in 2007 to a little more than $400 million today. Because of this shrinkage, and because the more liquid assets are naturally the first to go, the private equities are now up to 22% of the mix. Wischmeier said he therefore must start selling off private equities, probably at a loss. He said the losses won't be too bad at first, as long as the raiding of the fund stops, but that there could be big losses in store if belts aren't tightened immediately.
Now that I think about it, I'm not sure if the seed corn analogy is best here, either. It might be better if I titled it "Fiscal Cannibalism: Eating our Own Legs."
If you read John Hood's recent National Affairs article, you learned about the "states in crisis."
Though "crisis" seems like a pretty good word for the structural budget problems most state governments face, Thomas Sowell tackles the topic of "budget crisis rhetoric" within his latest column posted at Human Events.
Politics being what it is, we are sure to hear all sorts of doomsday rhetoric at the thought of cutbacks in government spending. The poor will be starving in the streets, to hear the politicians and the media tell it.
But the amount of money it would take to keep the poor from starving in the streets is chump change compared to how much it would take to keep on feeding unions, subsidized businesses and other special interests who are robbing the taxpayers blind.
Letting armies of government employees retire in their fifties, to live for decades on pensions larger than they were making when they were working, costs a lot more than keeping the poor from starving in the streets.
Pouring the taxpayers' money down a thousand bottomless pits of public and private boondoggles costs a lot more than keeping the poor from starving in the streets.
Bankruptcy says: "We just don't have the money." End of discussion. Bailouts say: "Give the taxpayers a little rhetoric, and a little smoke and mirrors with the book-keeping, and we can keep the party rolling."
Estonia is one of the most promising young economies in Europe. If
they don't become too ensconced in the regulatory mazes and central
banking cycles the EU creates, they will continue to flourish. As one of
the freest economies in the world, according to both the Heritage and Fraser Indices on economic freedom, Estonia is a Baltic Tiger that stands to
enjoy years of prosperity despite the recent global recession.
That's the point of this USA Today article reporting on the findings of a recent book, Academically Adrift.
Some students enter college eager to study, but many others enter college with scant interest in academic work. They've been lured in by easy money and the prospect of four or more years of fun -- "Beer and Circus" as Professor Murray Sperber entitled a book 10 years ago. For great numbers of young Americans, college is not so much higher education as it is LONGER education.