Tuesday, March 26, 2013
States Cutting Higher Education and the Future
Here is a nice chart showing the one aspect of the decapitalization of the US, and how we are short changing our future.
A case of present wise, future foolish: Do taxpayers think they are coming out ahead? Not so: The people they are depriving of education, first of all, are their own children. And second of all, their children are the people who will be supporting them in their retirement.
When a person is retired, they live off the labor of the current work force. They do not somehow save up their labor, and get what they produced all back when they stop working. The retired are supported by the people who are still working. It is the labor of the younger generations which supports the elderly.
Any sensible person would want that workforce to be as prepared and as capable as possible to support them in their retirement. But by reducing, cutting back on their education, the taxpayers are depriving this workforce, on which they will depend, of the resources, the preparation and capabilities, necessary to support them. They should instead want them to be prepared, to have the capital, the human capital, to produce enough goods and services to support them in a reasonably comfortable retirement.
And so also that the next generation themselves can be reasonably comfortable, as they work. If they are not reasonably comfortable, they will be resentful, at the least, and may choose to cut their elders off, at the worst, when they come into their power.
Helping to pay for the higher education of the upcoming generations is one of the most important ways a person saves for their retirement. Seeking instead to secure their labor with debt bondage is counterproductive, since it discourages the investment the young must make in the first place, and also makes them resentful of the imposition of social burdens.
Money in the bank is useless without a well functioning economy. And you cannot have a well functioning economy without an educated workforce.
And this is another case of inter-generational warfare, See: http://anamecon.blogspot.com/2012/10/inter-generational-borrowing.html
And it also points up its folly.
There is another interpretation: Trade. Everything in an economy is connected. Thus the equalization of factor prices applies to all factors. Those which are more insulated from the direct effects of trade, such as education, are affected more slowly, but affected still. The persistent trade deficit will result on downward pressure on all production, on all sectors of the economy, including education and the capitalization of the workforce.
The increased necessity for the importation of skilled labor, brought about by short-changing domestic investment in higher education, is another aspect, and a case where the feedback is reinforcing and aggravating the trade deficit.