Monday, April 20, 2009

Student suggests education reform

Here is a student's policy suggestion and my reaction to it.

Public schools should be improved in more than one way and that higher education should be made more affordable. Public schools should go green and start recycling, use efficiency light bulbs, and use paper plates instead of plastic or Styrofoam. It’s time to stop the dumbing down of America, which stoops to its people and suppresses its great potential. Schools need to be a place where we learn not just the curriculum but respect for knowledge and history. Increasingly, the main diet at school is social skills.

Making higher education affordable is in the works with Mr. Obama. Reducing college costs has continued to be a hot topic and is growing to be a public concern. Jesse Jackson recently wrote an article in the Chicago Sun-Times suggesting that Congress pass a law to offer a 1% interest rate on federal student loans, including Stafford Loans and PLUS Loans. President Obama has promised to create the American Opportunity Tax Credit, a tax credit to ensure that the first $4,000 of a college education is completely free for most students, which covers two-thirds of the cost of tuition at the average public college or university. This is an important step forward, but we need to urge him to enact stronger legislation to streamline our system. He needs to make it efficient, fair, and affordable for all Americans, not simply those with good credit scores or financial security.

This affects our society deeply and dearly. We have to invest in our collective future by urging President Obama to make higher education more accessible and affordable for the millions of Americans hurting right now.
My reaction follows:

You have three main education policy proposals: you want a national policy to raise standards in K-12 education; you want a policy that encourages schools to lead society in becoming environmentally sustainable; and you want a federal policy to lower the costs of college education borne by students and their families. You claim that schools have lowered their academic standards, and currently devote too high a percentage of instructional time on improvement of social skills rather than academic ones. I disagree, but that point isn't central to your main policy suggestions.

I also doubt whether college education can cost much less than $10,000 to $14,000 per student per year, given the realities of the labor and technology and resources involved, and the labor market for the people involved with providing college education. So schools that are charging less than that probably can't be expected to lower costs much. But yes, schools that charge much more than that each year in tuition are probably spending too much on salaries or projects that aren't related to the core university missions of education, scholarship, and service. Even with such given costs in higher education, it ought to be the case that more of the expense is spread over the whole population (through taxation and government spending), since having a large segment of the population college-educated gives significant benefits to everyone in society. The costs that are borne by students and their families could be reduced by letting families borrow to help pay their share of college expenses at terms that yield no profit to anyone (perhaps with interest rates indexed to inflation so people only pay back exactly what they borrow in inflation-adjusted dollars).

You must be aware of the No Child Left Behind legislation (PL 107-110, The No Child Left Behind Act of 2001]. This law was supposed to raise standards. It does this by insisting that states set standards and measure how well children are progressing toward reaching those state academic standards. If schools fail to bring children up to standards there are consequences. Yet, you still say that American public schools are dumbing down their content. Wouldn’t the remedy to this supposed lack of high standards be to raise those state standards on which students are tested? Is there some other policy you can imagine where the federal government (which has very little constitutional basis with which to influenced public education, since that is mainly a policy realm left to local and state governments) can raise standards in schools? I suppose the federal government could establish a national secondary education graduation test and say that it would only hire workers or recruit military personnel who had passed the secondary education graduation test. That might raise standards inexpensively, but we would probably end up with a civil service dominated by people from Kansas and the Dakotas, and hardly anyone from Alabama or Mississippi or Arkansas would be able to get any federal jobs. The military would probably have to close its recruitment offices in South Carolina.

I like the idea of making public schools sustainable. When you think of a policy to make schools green (environmentally sustainable), you ought to think of specifically what your suggestion will imply in terms of actual policies. Just as PL 107-110 only allows federal education funding for states that implement standards and testing, we could have a law that reserved federal education funding for states where a certain percentage of schools had solar or wind energy power plants installed, food gardens growing some food for the cafeterias on the school grounds, and non-disposable trays or plates for serving food. The same law could mandate that all new school buildings over a certain size must be constructed using geothermal heating/cooling systems. That sounds good to me. The other main way to encourage environmental sustainability in schools is to have generous grant programs to help schools install solar and wind power generation stations on their roofs or in their school yards. Or, you could have federal grants generously support service learning projects where students worked with local governments and utility companies to measure energy use and document inefficiencies, or otherwise study and report on unsustainable burdens on the environment that could be removed. State environmental protection agencies could cooperate with high schools to set up pollution monitoring devices maintained and used by public school students, who would study pollutants and environmental regulations as part of their chemistry and biology classes along with their government and civics courses.

Your policy suggestion to make college more affordable is also very sensible. There are many ways to do this. You have mentioned the suggestion that the government provide Stafford and PLUS loans at 1% interest rates that can be used to pay tuition or purchase textbooks. You could also have a policy to define “reasonably priced higher education” and stipulate that the federal government would only give research grants to faculty at universities that met the criteria of being reasonably priced. You could even use federal hiring guidelines to discriminate in favor of graduates of less expensive universities. The federal government could require states to fund a certain percentage of the cost of university education for state residents, say 65%, and only give funding for education and infrastructure development to states that met that higher education funding requirement. The federal government could establish generous merit scholarship grants to be given to the top 10% of graduating high school seniors (in public schools) and also to the top 10% of graduating high school seniors across the nation (those who perform in the top 10% in that national secondary education graduation test I suggested as a tool to raise educational standards). If the federal government gave the best students a grant equal to 80% of tuition at the university of their choice there would be considerable pressure for students to learn well in secondary school, and if the “best students” were defined in terms of both national populations as well as specific school building populations, the best students at the poorest and lowest-performing schools would have just as much incentive to do well as those at the schools where already almost every student was doing well.

The $4,000 grant to help pay for college (The American Opportunity Tax Credit Act of 2009) seems like it would cover a freshman year at a community college. That is good. This would not cover very much of the costs of attending a good private school, but students and parents can decide where they want to go, and it’s typically families from wealthier backgrounds who send children to the more expensive schools, so the $4,000 grant seems fair (in that it will go far for the students who attend the less prestigious public junior colleges).

Sunday, April 19, 2009

Bail out policy proposal

Policy Proposal submitted by a student.

Our government has spent money bailing out banks and other big industries. We have done this to save our economy. Our economy is still shaking, and many more companies are asking for bailouts. My suggestion is that instead of bailing out big industries we should bail out the taxpayers. People are losing their jobs. They do not have enough money to make ends meet. Therefore they are cutting back on their expenditures. If the government would take the amount of money they would spend on a bailout and distribute it evenly to all taxpayers, then that would boost the economy and the companies would no longer need bailouts. This is something that has never been done on a large scale before in this country. Our leaders have always depended on the trickle-down effect before. Obviously this is not working. If the American consumer had a large sum of money then they would have the means to buy cars, to put in savings accounts, to pay their bills, or to even buy a house. This increase in revenue would create a demand, which would give people their jobs back. It is time for the government to give back to the constituents that voted for them.

Student's analysis of their proposal.

I chose to write the above proposal because it is one of the federal-level policies that I care about. Right now the economy is very vulnerable. I realize that the government will never bailout the Average Joe. They say that financial independence is the responsibility of every individual. Then they go and reward bad behavior. They give money to the people that are some of the reason why our economy is in shambles, and they leave them in charge with few stipulations.

I actually got this idea from an email I received around the first bailout. A guy had actually figured out how much each U.S. tax payer would receive if the government would give us the bailout instead. I cannot remember the amount, but I do remember thinking that with that amount of money I could pay off my house, buy a new house, and buy a different vehicle and still have some left over. The email was just a joke, but it makes sense. The economy is not going to get better until the middle and working classes have money to buy products. Until they do people will continue to lose their jobs because there is no demand for the products they are producing.
My response to my student:

There is something to this. The government can “invest” $700 billion in the banking and financial sector, and expect to lose perhaps half of that investment in the long-run, but in the mean time the banking system will be propped up so that it doesn't collapse. Or, that same money could be used for something else. For example, the United States could establish a public bank that would give refinancing to everyone who owed money on a property, with 50-year 3% mortgages. All the commercial banks would get rid of their “legacy assets” as everyone refinanced using this public bank. This would in essence be “giving” money to Americans (people who are paying 5% or 7% interest would be paying half as much in interest, and keeping the rest for themselves). It might drive some banks out of business, but other banks that are bring driven toward bankruptcy because so many of their loans have gone bad will be saved as the people who are defaulting will transfer their debt to this national public bank.

If you divide $700 billion by 305 million (approximately the population of American citizens) you get a figure of $2,395 per each American. That is unlikely to be enough to help very many Americans buy new cars or houses. If you use a figure of $1.1 Trillion you still only yield $3,600 per American.

The $1.1 trillion is going to the following things, according to ProPublica:
$247 billion for banks.
$100 billion for purchase of bad loans (“toxic assets” or “legacy assets”).
$70 billion to prevent AIG from going bankrupt.
$60 billion to keep Fannie and Freddie Mac running.
$50 billion to help prevent foreclosures.
$25 billion to help auto companies avoid (or prepare for) bankruptcy.
$79 billion for other things.
$470 billion ready for whatever.
And by the way, there is a $500 billion line of credit for the FDIC, which may draw upon that to take over some of the largest banks that may be going insolvent.

Now, I wonder what would happen if the government gave nothing to keep up the banks, did nothing to buy toxic assets, let AIG go bankrupt, let Fannie and Freddie Mac cease operations, let the auto companies go through bankruptcy, and passed on the cost savings from all that to taxpayers. That would give each of us $2,000, and families with four persons would have $8,000. On the other hand, such a policy would mean that probably AIG, Bank of America, Citigroup, J.P. Morgan Chase, Wells Fargo, General Motors, Goldman Sachs, Morgan Stanley, U.S. Bancorp, Chrysler, Capital One Financial Corp, and American Express would all go bankrupt, along with about 100 other banks and financial companies and industrial companies. That would be okay if there were some big and healthy banks or private equity funds somewhere on the planet who could buy them up when they went bankrupt. However, the banks in other parts of the world are also in very poor financial condition. With so many of the most important banks going out of business, many companies would have to pay on the credit default swaps (billions of dollars promised as insurance that the big firms wouldn't collapse, so that entities owed money by the big firms would cover their losses if those big firms went bankrupt). This would create a domino effect that would cause the failure of almost all the large banks on the planet. Every major equities market on the planet would crash. It's entirely plausible that the only large financial institutions left standing would be ones that had been taken over by governments and central bankers.

Since almost all large companies depend on these banks to provide short-term credit to help make payroll and so forth, there would be very serious problems at most major companies outside of the financial sector. Layoffs and bankruptcies would multiply. The unemployment rate could go from 8.5% to 28.5% in a few months, and the stock market and equity markets all across the globe would drop by 80% or more. Consumer demand would drop like a meteor crashing through the atmosphere.

Tax revenues would drop and state governments would need to cut spending by 30% or more, but because there would be such high unemployment, the demand for government services (especially unemployment relief) would be very high indeed.

But, at least every American would have $2,000 or $3,000.

I agree with you that it is aggravating to see our money to go pay off the problems of the financial sector. I’d like to see the government take over all the big companies and fire all the managers and administrators, and replace the speculative financial sector with some sort of super-powerful national public bank. But then, I like the idea of planned economies and public control of key sectors in the economy (in economics I like some aspects of socialism), so for me this would be quite acceptable. But, practically, it’s not going to happen. The bailout is the policy we’ll get. And we've got to push for the best bailout we can get. One that will save world capitalism without throwing the world into an economic free fall that would make the 1930s look prosperous. One where American taxpayers aren't entirely ruined. One where the financial sector is tamed and the people who run that sector are knocked down to a humble size.

Extend welfare to the near-poor working class

Here is a student's paper with my reaction to it.

I would like to see a policy that in the welfare system has a program that helps the working class people. Whether they let them get help from the programs that are already out there or make one specific just for these people in the certain income area that they make. Working class people need help with day care or buying food each month. Even just allowing working class people to participate in day care help would make a huge difference.

I propose this policy because I think that we leave out the working class in welfare programs just like we leave out the middle class in money for school. It seems that our welfare system is there to bring people down instead of bringing them back up. People learn that they get more assistance not working then working so therefore they don't work because they are better off. We need to help these people when they need help and not encourage them to stop working so they can get help.

Is there any evidence you can offer to back up your claim that people “learn they can get more assistance not working than working” and that as a consequence of this lesson they “don’t work, because they are better off” not working? The Earned Income Tax credit increases benefits as people work, and then tapers off benefits as people rise out of poverty. Are you really arguing that people stay on welfare because they prefer to collect housing vouchers, Medicaid, SNAP (food stamps), SSI, or TANF? To qualify for SSI they need a disability, but I suppose some people with disabilities could work and choose not to because they would have a reduction in their SSI (or lose their SSI) if they demonstrated that they could in fact work. TANF has a limit on how long people can have benefits, and usually in order to receive benefits you must actively look for work. Medicaid is something that people lose when they earn more money, but people who earn enough money to lose Medicaid might earn enough to qualify for private insurance or they might get employer-provided health insurance, which might be better than Medicaid. Housing vouchers and public housing rents do remain a particular fraction of what a person earns, so once incomes reach a level where the fraction of one’s earnings is higher than the market-rate rent for where one is staying there is an incentive to either move out of public-assisted housing into market rate housing or else stop earning so much money. But many people in public housing are elderly or disabled, so I don’t think this is a big factor for a sizable proportion of those getting housing assistance. SNAP (food stamps) is the one program that is reduced as you earn more, but as you earn more, you can buy your own food without the stigma of using the food assistance card, so probably many people are happy to earn their way out of qualifying for SNAP.

In other words, I can’t understand why you are saying that the welfare programs we have now are “keeping people down.” Do you have any evidence from any studies of work effort over the past few years showing that people work fewer hours and earn less because they have the opportunity to collect the EITC, TANF, SNAP, Medicaid, SSI, Public Assistance Housing Vouchers, childcare subsidies, and so forth? I know this was a claim people made (with very little evidence indeed, although there was some evidence) back in the early 1990s, using data from the 1980s, when AFDC gave low-income unmarried parents a certain minimum income, but we've had significant welfare reform since then.

I guess that you are essentially asking that policies offer benefits to households with incomes up to higher thresholds. You’re suggesting that benefits ought to be reduced gradually up to the lower reaches of middle class incomes.

For example, let’s say a family with no income gets a certain amount of help with housing, food, medical insurance, daycare, utilities, and other sorts of income support. You’re asking that instead of having families qualify for 100% of the benefits when they meet a certain income test and then lose 100% of the benefits when their incomes exceeds that test threshold, that the benefits be reduced at some particular rate.

Here is a chart of what you might want:

Expand the Child and Dependent Care Tax Credit

Here is a little policy exercise one of my students gave me, along with some of my reaction to her assignment.

The Child and Dependent Care Tax Credit provides too little relief to families that struggle to afford child care expenses. Barack Obama and Joe Biden will reform the Child and Dependent Care Tax Credit by making it refundable and allowing low-income families to receive up to a 50 percent credit for their child care expenses.

The goal is to provide more relief for families who are struggling to afford child care expenses. I believe we should be helping families who are low income and families who have more than two children. Many families who are just above the poverty line struggle just as much as low income families. I believe we should broaden the amount of families supported. The children should not suffer due to their parent’s income. Every child should have the same opportunities to succeed in life. Proposing a lower percent credit on child care expenses for families who make more would be justifiable. Families who make below the poverty level should be allowed a 50 percent credit. Families who make just above poverty level should receive 25 percent credit for their child care expenses.

I wrote this suggestion thinking to help more than just the “low income” families. Many families struggle although they are not below the poverty level. Children are expensive any way you look at it. More families are struggling above the poverty line and need assistance. A small amount of aid would be extremely beneficial to assist families with child care expenses.

Well said. There are a few issues related to this policy suggestion I should consider here. First of all, how much should it cost to provide quality day care to children? Secondly, how much is a fair subsidy to make day care affordable, and how much should people of various incomes end up paying for day care after the subsidy is calculated?

Given the fact that we want highly skilled and responsible persons to work with young children and infants, and given the fact that we want a low ratio of children to caregivers in daycare or child care establishments, there must be some minimum amount that child care actually costs. For example, if we want to pay 80% of the median year-round full-time income (which would be 80% of $48,680, or about $38,950 in 2009) to a child care worker, and provide the child care worker with health insurance and a pension plan, which might add $6,000 a year to the salary, for a total cost of $44,950, we can see that we’ll have about $45,000 in labor costs for each skilled worker. Each worker might have an assistant earning the same benefits with a much lower salary (say, $28,950), costing perhaps $35,000 per assistant. Then, you would need materials, and a rent or mortgage on a place, and utilities for light and heat and so forth. You need to figure what all this would cost, and then divide by the number of children who might be served. Assuming every professional can have two assistants, and the three day care workers together can handle care for 30 children at a time… well, it looks like day care is going to cost about $4,500 per child per year, or $5,400 if you go with a ratio of 8 children to each adult caregiver instead of 10-to-1. That’s thousands of dollars less expensive than the average state is spending on elementary education, but it’s still a pretty high cost.

Is daycare something that ought to be free the way public education is from kindergarten (or first grade) through the end of secondary school? I think many people still assume one parent might be staying at home with children who are under 6 years-old, and the loss of earnings given over to domestic child-rearing in the first four or five years of parenthood is considered a reasonable cost to many people. And yet, there is also now a fairly common idea that if the parents aren’t living together it’s better for the single parent with custody of the children to work and earn an income rather than stay at home and receive a pension. And that idea carries over to all classes, so that even in married couple families many people think having both parents work is just as normal as having one parent stay at home to rear the children full time.

Let’s imagine a family that is significantly above the poverty level, say a family of four with one income-earner bringing in 150% of the four-person family poverty threshold (which would be $33,075 in 2009), and this family has two children who are aged 2 and 4, plus a school-aged child who attends elementary school. Without government support the family would be paying perhaps $10,800 for high quality daycare, or maybe just $9,000 for basic day care (with two children getting full-time day care). That would be tough. The family would have a gross monthly income of $2,756 with daycare costs of $900 (about $21 per day per child). Such a family really could benefit from some government support to reduce the cost burden of daycare.

I’d probably arrange day care assistance along some sort of sliding scale, so that the government would pay up to $4,400 per child (for a household with no income), And then for every dollar earned there would be a 9¢ reduction in the day care subsidy, so that a family earning $10,000 would receive up to $3,500 per child in day care subsides or allowances, a family earning $22,050 (100% of poverty) would get up to $2,415.50 per child for day care, a family earning $33,075 (our example, at 150% of poverty) would get $1,423.25 per child, and even a family earning $48,000 would still get $80 per child for the day care subsidy (hey, my family would qualify!). For our example family earning $2,756 per month this means a subsidy of $237 per month, which reduces the cost from $900 per month for day care down to $663 per month (for two children).

It seems to me when you think of benefits this way, starting with some maximum benefit level that would help a family with no income pay just about the full amount for basic childcare (or basic food, or basic housing, or basic medical insurance), and then calculate a rate of reduction as income increases (a reduction of 9¢ per $1 earned for daycare subsidies for each child), you end up with a policy that helps everyone according to their ability to pay.

I’m not impressed by a policy that gives a low income family a 50% credit for their child care expenses. A person earning $8.50 per hour and working 20 hours per week will be earning about $895 per month. If they put their children in the sort of basic daycare facility I’ve described, the cost would be $375 per month, and even if the government covers 50%, that’s still $187.50, leaving them with $707.50 if they have one child in 50% subsidized daycare. I’m also unhappy with benefits that go between 100% subsidies, 50% subsidies, and 25% subsidies. Such benefits drop dramatically when you cross a specific income threshold. Better to just have a standard decrease in benefits matched to your income, so that no one ends up getting hit with a huge increase in expenses if they earn a little more and cross some threshold.

America's Town Hall

Check out the U.S. Department of State's webpage for their International Information Programs

There are some interesting videos related to the Summit of the Americas (which is going on this week). Here is one on "how to get involved" with the goals of the summit.  There is also this one about "how we are connected" in the Americas.

Monday, April 13, 2009

American Recovery and Reinvestment Act Presentation

Andrea Nutaut has created a Powerpoint Presentation that describes the American recovery and Reinvestment Act using words from speeches that President Obama and Vice President Biden gave on March 3, 2009, when they spoke at the Department of Transportation. I've converted it into HTML and put the presentation up as a web page.

Saturday, April 11, 2009

Food security in Illinois

I thought this essay letter written for an assignment by one of my students was worth sharing here on the blog.  It's about the food stamps program, now called "SNAP".

Dear Senator [Name],

I am writing in regards to the Supplemental Nutrition Assistance Program (SNAP), formerly the federal Food Stamp Program. One of the primary goals of this program is to help put healthy foods on the tables of low income families. The change has given the program a new focus on extending benefits to as many families as possible by making the program more accessible to those in need. The average monthly household participation in Illinois alone was 595,832 for 2008! Only four states have a higher participation rate than Illinois: California, Florida, New York, and Texas. 

The number of Illinois households participating monthly in the Food Stamp Program has shown a significant increase of almost 30,000 households yearly since 2004. I believe this indicates to our community that the need for food assistance shows no signs of slowing down, especially in today’s unstable economic times. Job loss, homelessness, and hunger are on the rise.
These are all issues that can not be ignored that we must face together. Our current President, Mr. Barack Obama, has shown that he is committed to doing his share in helping SNAP during these rough times by recently putting into action a pilot program to help senior citizens, one of the hardest populations to reach that is served by SNAP, receive the benefits they qualify for. He also supports the recent additional nutrition provisions that were included in the American Recovery and Reinvestment Act to temporarily increase the benefits and services that individuals and families receive through SNAP. This will greatly increase the food purchasing power of low income families during this American hardship.
Still, the United States Department of Agriculture, who oversees SNAP, only has a discretionary budget authority of $24.6 billion for 2009 compared to that of the Department of Defense’s roughly $650 billion budget for 2009. Remember, only a small portion of that $24.6 billion will go to SNAP, and many needy families with young children will inevitably still go hungry this year.
Hunger is defined as “the uneasy or painful sensation caused by lack of food; the recurrent and involuntary lack of access to food.” In Illinois during the years of 2004-2006, 3.5% of households experienced hunger on a regular basis. Food insecurity can be defined as “the limited or uncertain availability of nutritionally adequate and safe foods or uncertain ability to acquire acceptable foods in socially acceptable ways.” Some food insecure households are lucky enough to obtain enough food to avoid going hungry, but not all of them are as fortunate. Between 2004 and 2006, 9.8% of Illinois households experienced food insecurity. 
This is why I, along with the rest of our community, need your help. You have the power to educate within the political arena. This is such an important issue and immediate necessity. Don’t let a chance like this pass you by. Please help push for more spending for SNAP and related programs this year and in years to come because, together, we can make the difference these families so desperately wish for.

Thank you for your time and attention to this matter.

University of Illinois at Springfield
Social Work Program

If you're interested in more information, here are some web sites the student used or else that I'm recommending where you can learn more about food security policies in Illinois.

Illinois Department of Human Services description of LINK.

Wednesday, April 8, 2009

Issues with SSI benefits and casemanagers

I thought this was a well-crafted short piece examining some of the issues and complexities of the SSI benefit policies.

When it comes to assigning people certain amounts of SSI for different disabilities and things, I think case managers making the overall decisions need to be more aware of the person’s situation. For some people receiving SSI is an excuse to not hold a job or contribute anything worthwhile to society. And then others are kept from receiving these benefits. For instance when alcoholism is listed as someone’s main medical problem – they are kept from receiving SSI benefits.

Here are two examples.

A young man in our community who is developmentally disabled, but he’s also an alcoholic. His doctor listed alcoholism as his main problem, keeping him from receiving SSI, something that he truly needs because he is not developed enough to hold a steady job. The thing keeping him from holding a job isn’t alcoholism.

There’s the other side of the coin as well – the diabetic alcoholic who receives SSI because their main medical problem was diabetes. So he gets a SSI check every month, but rather than using it to eat properly, he uses it to go buy alcohol, thus making his diabetic issues worse and worse.

It’s hard to say that one person deserves SSI over another. I can’t even imagine being the person in the position to set down those rules and those standards. It’d be nice if it were the sort of thing that could be looked at differently from person to person, etc and so on. Perhaps it’s time to do something like that. To start looking at individual circumstances when it comes to handing out SSI and moving forward based on those circumstances and how they fit into the whole. Sometimes a simple set of standards is just fine to get by on, but other times things need to be shifted and changed to put everything in right order.

Wednesday, April 1, 2009

Some people aren't cut out to be teachers

Here is an interesting article about Obama and education policy that describes a conversation between the president and a school teacher.