Realistically, Christie has little choice in the matter.  With a budget deficit topping $1 billion dollars, and a projected 2011 deficit of nearly $11 billion dollars, Christie has called a state of emergency. Rather than begging for money at the federal trough, Christie is forcing his own government’s hand.  The proposed cuts will force state government to make the necessary tough choices that state agencies and school districts were able to offset during the housing bubble and years of artificially high property taxes.

“I take no joy in having to make these decisions. I know these judgments will affect fellow New Jerseyans and will hurt,” Christie said. “This is not a happy moment. However, what choices do we have left?”  This is the key question, and nobody – including Christie’s political opponents – has a better answer than Christie himself.

According to Democrats, Christie is robbing Peter to pay Paul.  State aid to schools will have to be replaced with local funds, leading either to higher property taxes to pad school district coffers, or to serious cuts in bloated local education budgets.  “This is an easy thing to pick someone else’s pocket — you’re taking the money from local taxpayers to fill your budget,” said Stephen Sweeney, the Democratic state senate president.

Barbara Keshishian, president of New Jersey Education Association, warns that Christie’s cuts to education could have “serious unintended consequences for the future of our public schools.”  Newspapers are calling the cuts “draconian”.

This fiscal belt-tightening, however, lays bare a number of problems with the current public education system – not just in New Jersey, but across the country.  Public school has traditionally been funded almost entirely at the local level, and school districts still receive the majority of their funding from local property taxes.  Over the years, however, school districts have increasingly leaned on state aid to shore up their budgets.

This, in turn, has led states to rely more and more heavily on federal funding and the strings attached to that funding.  Federal education spending sky-rocketed under the No Child Left Behind program, and peaked in 2009 with the federal bailout of the states. Now Democrats in Congress and the president are trying to entrench the federal government even further into the American education system, despite any indication that such involvement actually helps failing schools.

At the same time, parents across America have begun to opt-out of the public school system.  Turned off by increased federal involvement, union entrenchment, and unresponsive school administrators, parents have flocked to charter schools, magnets, and private institutions.  In 2010 and 2011, with no bailouts to fill empty state treasuries, and with shrinking student populations, school districts will finally be forced to make the cuts they should have made years ago.

Moreover, schools and local governments will need to start considering ways to make their schools more competitive.  This will require rethinking teacher merit pay, the power and overreach of teacher and administrator unions, and the outdated use of tenure to protect teachers from even the most basic accountability.

Christie is on the right track in New Jersey, meeting the crisis head on and tackling it before it overwhelms his state and brings government to a halt.  Now local governments across New Jersey and across America need to consider the implications.  With states like California and Arizona teetering on the brink of fiscal collapse, perhaps it’s time for those states to consider taking a similar approach to state spending, while shifting more of the responsibility of government back to local communities.

On the education front, school choice and competition is vital for America’s schools if they are to remain autonomous and effective.  Relying forever on state or federal aid, and allowing the federal government to further enmesh itself in local education is the wrong approach to fixing our nation’s schools.  Not only is it a dangerous fiscal proposition, but one which threatens our children with mediocrity in the name of egalitarianism.

In New Jersey, the question remains whether Christie’s cuts will go far enough, and whether local governments and politicians on both sides of the aisle will be able to work together to make the transition as painless for New Jerseyans as possible.  Christie may have popular support for his proposals now, but that could drop off just as quickly as the fiscal crisis deepens.  If that happens, and states can’t balance their own budgets, the federal government promises to become even more involved in educating our children.  Chris Christie understands this.  The question is, will the rest of America have the courage to do the same?

Despite the fact that Mrs. Obama took personal responsibility for her own children’s near-miss with childhood obesity, the First Lady believes that the vast majority of Americans could use the beneficent hand of the state to drag their own children back from the brink. To do this she proposes that the federal government do what it does best: spend lots of money. To do that, President Obama has proposed that the government form a task force to see which spending project will sound the most appealing to voters.

A few of the ideas floated include:

• Working with the American Academy of Pediatrics to encourage its 60,000 members to check the severely out-dated Body Mass Index (BMI) at each child’s visit, and give out “kid-friendly prescriptions” for healthy, active lifestyles. Kids will fill this prescription by convincing their parents that “outside” is dangerous and that what the family really needs to stay healthy is a Wii.

• $400 million in tax credits drawn from the current budget surplus will go to grocery stores to form state-sponsored monopolies in “food deserts” (areas of the country where there is no easy access to grocery stores). This is deemed much more efficient than scaling back zoning laws and allowing Wal-Mart to set up shop in said “food deserts” because Wal-Mart’s prices are simply much too low and of course because people who write these laws really don’t like shopping there.

• A new foundation will be created “made up of existing foundations and groups to monitor the campaign.” Think of it as a super-foundation (or a super-healthy-foundation). Perhaps we should form a second committee first, however, just in case the first committee isn’t quite up to the task.

• $10 billion over 10 years for the Child Nutrition Reauthorization Act, which would basically reward the most well-connected health food industry lobbyists around the country to provide healthy, free and reduced-priced school meals for kids. Because again, allowing private companies to run school cafeterias would be far, far too efficient.

• Another $25 million would go to schools in the cleverest legislators’ districts to help renovate school kitchens and replace deep fryers with free-range community gardens.

Now, you might be wondering how these steps will end childhood obesity in a mere twenty years as Mrs. Obama has ambitiously stated as her plan’s goal–a time frame which also conveniently sits outside her tenure as First Lady. You might also wonder how healthier school food will trim down our children if they continue to eat bags of potato chips at home while lounging for hours in front of the television. Perhaps the lady doth protest too much, given the shaky evidence that there is any such childhood obesity “epidemic” to begin with.

More importantly, you might be asking yourself how a highly centralized solution that consists mainly of throwing money at a problem could possibly succeed where parents, schools, and previous administrations have all failed.

What you don’t realize is that this is only one front in the larger war on obesity. Calling it a war is, after all, the only way to really do battle with all these pudgy, sedentary children.  Michelle Obama can play general, and we can all play soldier. Chips and cheeseburgers and trans fats can be the enemy combatants.

How can we do our part to help Michelle Obama and Uncle Sam?

Well I have a modest proposal for the First Lady that is entirely unique to the war on obesity. It involves placing “caps” on the amount of calories food manufacturers are allowed to put in their food products. It also sets up a system of “calorie credits” which can be bought and then traded by both food manufacturers or guilty midnight-snackers on the free market Federal Calorie Exchange. Let’s call it, for lack of a better phrase, “cap and trade.”

This would allow producers of healthy food to sell their calorie credits to candy peddlers and fast food chains. Eventually the high-calorie producers would find that their products were too cost-prohibitive to manufacture, and consumers would turn to cheaper and healthier food like the affordable stuff they sell at Whole Foods. Surely this would never lead to food in general growing much more expensive, and would have no averse effects on the working poor whatsoever. And if it did, we could always set up a public food option.

Sure, congress will wheel and deal and make certain that the food manufacturers in their districts won’t be hit with low caps, or that they’ll start out with enough calorie credits to basically render the program inert, but that’s not the point. Savvy businesses and their representatives will skirt the rules, find loopholes, and turn the program into a slush fund for special interests. But this misses the larger issue.

This is war, and we need to do something quick. For the children.

Nevertheless, I think moderates make the same mistake that the purists do in imagining that their own brand of conservatism is the right way forward.  I would argue that neither the moderate or conservative approach is right or wrong, but rather that there are sincere, genuine and reasonable people representing both camps.  These people are the ones that moderate and conservative members of the Republican party should support, despite some political differences.

Furthermore, these distinctions become fairly muddy as we look at the plethora of policy positions that actual Republicans hold.  Take former New Mexico governor Gary Johnson, for instance.  As governor he cut several hundred state jobs, tightened the state’s fiscal belt, and vetoed 750 bills – more than all other 49 state governors combined.  He was against both the TARP and the stimulus.  And unlike Sanford and others in the GOP who claimed to be against the stimulus before accepting very large chunks of federal cash, I think Johnson would have refused the federal dollars if he were still in office.  In this respect, Johnson might be considered very far to the right.  But at the same time, Johnson opposes the war on drugs, and believes that the billions we spend locking up non-violent marijuana smokers each year is an expensive waste of time.  Johnson has a legitimate shot at the 2012 Republican nomination for president if he chooses to run – but is he a moderate or a full-blooded conservative?  Or is he a libertarian in Republican clothing?  Does any of it really matter, so long as he is a principled, reasonable man with sound ideas about how to fix some of this country’s problems?

I fully embrace a reorientation within the Republican party, and personally I believe that reorientation should be toward the center – or at least away from dogmatic thinking and purity tests (and if Jonah Goldberg is correct, conservatism is after all an ‘unsettled dogma’ - but I believe the more important task is supporting good ideas and honest leaders willing to embrace those ideas.  In a political climate like the one we have now, this is no simple thing.  Perhaps a center-right conference to provide counter-balance to CPAC is one place to start.

If moderates are to flourish, they need an infrastructure to support them. The Democrats worked hard in the 1980s and ’90s to showcase their centrist governors. They invented superdelegates to balance the left-wing activists who had saddled them with unelectable presidential candidates. They altered their primary schedule to enhance the clout of must-win states in the West and border South.

Republicans can learn from these examples. But first they have to say it loud and say it proud: The time has come to restore the center to the center-right coalition. Maybe it’s even time to start a new convention so the centrists can meet face to face at least once a year, just as their conservative colleagues do. CenPAC, anyone?

This is a sensible idea, and I imagine there are a good few moderate Republicans who would join up.  My only qualm with the concept is more with the terms “moderate” or “centrist” themselves.  Simply because someone isn’t fully in line with all the proper talking points that the GOP expects, or that talk radio conservatives like Limbaugh or Beck demand out of thinkers or politicians on the right does not mean that one is a “centrist.”  If anything, that term seems either a convenient way to take the easy, comfortable middle road or, conversely, to sling around as a pejorative in order to marginalize political opponents.  One man’s centrism is another man’s radicalism, or something to that effect.  Either way, I don’t think the debate is really between “moderates” and “conservatives” so much as it is between reasonable people and people who are in it entirely to win.

In this sense, the reasonable people may be very conservative – Paul Ryan, for instance, is hardly a “centrist” but he is in every sense of the word a reasonable man whose politics are well grounded in first principles.  Bruce Bartlett has added to the conversation not by being a “moderate” but by coming up with new and relevant ideas.  Conversely, there are those on the right with very little grounding in conservative first principles who take so well to the rightwing populism of the day that no one would ever consider them to be “centrists”, even if philosophically they are anything but principled conservatives.  A certain former governor of Alaska leaps to mind.

The fault lines on the right these days are too many to count, and just as difficult to parse out.  I think Frum is on to something here, but I think the problems run much deeper than merely a battle between two points on the political left-right spectrum.  I’m leaning toward placing equal blame on establishment – and indeed “centrist” – figures in the movement, and on the recent uptick in aimless populism manifested not just in the Tea Parties but increasingly on the right since the Iraq War.  Until both these elements can own up to their shortcomings and work to bridge the gap, I don’t think there’s much hope that anything terribly interesting will emerge out of CPAC or Frum’s imagined CenPAC.  The right has lost its center, no doubt, but it won’t necessarily find it by simply being “moderate” any more than it will find its way through purity tests.

Originally posted at True/Slant.

If Obama’s efforts to create a viable regulatory framework in which individuals can buy private health insurance (a) pass Congress, and (b) turn out to work well and be popular, then you can imagine a version of Ryan’s plan being put into place. But in the absence of that kind of reform, I just don’t see how you can do this, which is presumably why the implementation is delayed all the way to 2021 which helps Ryan avoid needing to think about implementation details.” — Matt Yglesias, writing about Rep. Paul Ryan’s alternative budget

I think Yglesias actually makes a pretty strong point here.  While I’m overall fairly sympathetic to Ryan’s budget – he does, after all, balance it (at least according to the CBO report [pdf]), something virtually no other politician is willing to even propose – I think there is a fundamental flaw with implementing a healthcare voucher program without first fixing the broken, dysfunctional health insurance market.  The exchanges created in Obamacare would be one way to do this.

What Yglesias does not point out, however, is that Ryan’s budget proposal also puts an end to the tax exemption for employee benefits.  Simply coupling this tax reform with the ability to purchase insurance across state lines creates an entirely new health insurance market.  Suddenly people on the individual market are given the same tax preference as people who receive their insurance from an employer.  Health insurance drifts away from employers and becomes personal and portable.  People wouldn’t lose coverage when they left their jobs.  Meanwhile, insurers would lose their long-held local and state monopolies and be forced to compete nationally, driving down costs both through added competitive pressures and by the better bargaining powers that these large, national firms would have, with their much larger, national cost-sharing pools.

Of course, the hard questions in healthcare will center around two inextricably linked concepts – pre-existing conditions clauses, and individual mandates.  Almost all modern democracies have some form of universal coverage, and the only way that it has been achieved with any semblance of a free market has been by doing away with pre-existing conditions clauses and implementing some sort of individual mandate.  If the former is done without the latter, nobody would buy insurance until they were sick – defeating the purpose (and the viability) of insurance to begin with.

Other alternatives exist, of course.  My personal preference is a model along the lines of Singapore’s healthcare system, which mandates health savings accounts and then picks up the tab on any costs above a certain flat percentage of income.  This puts healthcare directly in the hands of the consumer (cutting out insurance companies altogether) and provides them with catastrophic coverage if something should go wrong.  Furthermore, by placing costs and transactions directly in the consumer’s hands, it keeps costs from skyrocketing.  The mandated savings would be flat, but the catastrophic coverage functions progressively, covering less and less as income rises.

Either way, before any privatization of Medicare and Medicaid can occur, the private insurance market must be transformed.  Paul Ryan has shown true grit in crafting a budget that is actually balanced, but the possibility of backlash to cuts in entitlements is very real if the systemic problems in our healthcare system aren’t taken care of first.  Both Yglesias and Ezra Klein see this budget as a sort of draconian rationing of benefits for seniors and poorer Americans. If the insurance market could actually be fixed, however, then the system of vouchers which Ryan proposes would be adequate and possibly even better alternatives to the status quo.

Flip the tables: Imagine there are 59 or so Republicans in the Senate and they’re pushing for the privatization of Social Security – something Democrats fundamentally disagree with and want dead in its tracks.  Should Democrats work with Republicans on this reform or should they threaten to filibuster?  Would private retirement accounts be a palatable enough alternative to the current entitlement for Democrats to compromise, or would it better suit them and their constituency to simply obstruct?

Travel back a few years and you’ll notice that the Bush tax cuts were passed via reconciliation, because Democrats, rightly or wrongly, were obstructing those cuts.  Now reconciliation may be the only way Democrats can push healthcare reform through the Senate.  Nor is there anything wrong with that.  Both sides do it, and both sides should do it, just like both sides should oppose legislation they fundamentally disagree with.  That’s why we elect representatives – not just to do things, but also to oppose things that we disagree with.  They represent us, and if we oppose healthcare reform, so should they.  If we oppose going to war, so should they.  If we oppose privatizing Social Security, so should they.

Nevertheless, Republicans are wrong to think that they’ve worked miracles by stalling or possibly killing the Senate healthcare reform bill, or that those efforts will translate into tangible gains in 2010 or 2012.  Much of this is self-congratulatory spin-doctoring.  In a down economy it is almost inevitable that people will begin grumbling about the incumbents.  Whether that translates into significant gains for the opposition is another matter, and so far there is little reason to believe that Republicans have made serious gains in the public trust.  Disappointment with Democrats and disappointment with Republicans are not mutually exclusive sentiments.

Politically, the Republican party and the conservative movement remain immature and overly hysterical.  They have taken opposition beyond its necessary boundaries, devolving into rhetorical shenanigans and misrepresentations of their opponents.  While this may rouse the base and stir up populist ire, it does very little to restore faith in independent voters that Republicans actually have a plan or the capacity to govern.  It does nothing to bring about a return to good conservative ideas, no matter how much hot-air it expends on rather more generic ‘conservative principles.’

In the end, both parties should avoid the perils of over-confidence and self-delusion. Republicans should quit preemptively patting themselves on the back, and Democrats should avoid relying too much on the blame game. If healthcare reform fails its failure will be laid at the feet of the Democrats and especially at the feet of the president, no matter how hard he tries to distance himself from that legislation.  Obama’s State of the Union speech has shown that when it comes to healthcare reform he’d rather just drop the ball and blame the Republicans than take a position of leadership and pass the damn bill.  I can’t imagine a universe in which this won’t come back to haunt him later on, whether or not Republicans make an easy target.

P.S. – I personally don’t like the fact that Republicans have taken such an oppositional role in the healthcare debate.  But that’s because I’m pro-reform.  On issues that I am against (such as cap and trade) I heartily welcome staunch opposition.  I imagine many on the left and right are this way, calling foul on ‘obstructionism’ when it is against a policy that we like and similarly supporting the noble opposition against policies with which we disagree.

Now the Catholic Church in Washington D.C. is being told that in order to receive government funds, they must abide by a new D.C. anti-discrimination law in all their charities and employment practices in those charities.  The Church in Washington – part of a much larger, global organization – feels that it cannot submit to those rules and therefore will be forced to refuse said funds and close the doors on a number of the charities they currently run.

Liberals are once again up in arms.  ”What about the homeless?” they cry.   “How dare they not change their fundamental religious beliefs when that means leaving more homeless and poor without charitable services!”

Something about this smacks of double standards.

And thus we come to a very fundamental aspect of government involvement in just about everything.  The government limits choice.  The trade-off can be worth it.  It may mean less affordable abortions but more people covered.  It may mean gay people are given the right to wed, but religious charities have fewer dollars to provide for the poor.

The point I’m making is that there is such thing as consensus, but it usually comes at a cost.  It can’t simply be that everyone gets what they want, nor is it merely a question of ethics.  Reasonable people disagree on issues like abortion.  And we have a system of government that separates church and state, for better or worse.  This leads to concessions and compromises and trade-offs and people are always unhappy at the end of the day.

If we want government health care, maybe we have to give up federally subsidized insurance plans that cover abortion.  If we want gay marriage in D.C. and we also want religious charities to keep doing their good work, maybe we have to make exceptions for those institutions on religious grounds.  Or we can refuse them funding and find ways to implement those charities via the state or some other private charity.

Either way, I see pro-choice advocates and the Catholic Church doing very similar things here.  They’re both up in arms about the government making rules about how they spend the government’s money.  But it’s the government’s money, or rather it’s our money.  And that’s the way it rolls in a representative democracy.  Deal with it.

Originally published on November 13, 2009 at True/Slant.

For starters, this places 7 million more Americans below the poverty line.  18.7% of these are elderly, and will receive Medicare.  The remaining 5.69 million are non elderly.  Under the Senate Finance Bill, anyone earning 133% above the poverty line or below qualifies for Medicaid.  Using the new numbers, this means that at the very least, 5.69 million more people will be eligible to receive Medicaid than Congressional Democrats and the CBO are accounting for.

The CBO estimates, “there would be roughly 14 million more enrollees in Medicaid and CHIP than is projected under current law.”  But the CBO estimate was based on the old census numbers.  If Congress adopts the new methods for rating poverty, that number will increase by at least 5.69 million people. From the report [pdf]:

On a preliminary basis, CBO and JCT estimate that the proposal’s specifications affecting health insurance coverage would result in a net increase in federal deficits of $518 billion over fiscal years 2010 through 2019. That estimate primarily reflects $345 billion in additional federal outlays for Medicaid and CHIP and $461 billion in federal subsidies that would be provided to purchase coverage through the new insurance exchanges and related spending.

We can assume that an increase of 5.69 million people to Medicaid, plus an increase in subsidies to countless others, will significantly raise the cost of the final bill far beyond current CBO estimates.  In increased Medicaid costs alone it could amount to nearly $50 billion dollars, and the increase in subsidy payments would be astronomical, with payments going out to thousands more households than currently projected.  High unemployment rates will only exacerbate this trend.

Under the current guidelines:

• Poverty level: $22,050 for a family of four.
• 300% of poverty level: $66,150 for a family of four.
• 400% of FPL: $88,200 for a family of four.

Under the new guidelines:

• Poverty level: $24,755 for a family of four.
• 300% of poverty level: $74,265 for a family of four.
• 400% of FPL: $99,020 for a family of four.

It would be the simplest thing in the world for Congress to change its poverty guidelines to reflect the National Academy of Sciences numbers in the future, effectively extending Medicaid to millions more people, and placing a much greater burden on faltering state budgets.  And Democrats wouldn’t do this until after health reform had passed, because adopting these figures now would have major effects on their cost estimates.  According to the Associated Press:

The Census Bureau said it expedited release of the alternative numbers for this month because of the interest expressed by lawmakers and the Obama administration in seeing a fuller range of numbers. Legislation pending in Congress would mandate a switch to the revised formula, although the White House could choose to act on its own.

This is fairly significant.  If Congress passes health reform legislation based on old methods of defining poverty, then changes those methods, in effect they will have completely misrepresented the actual costs of reform.  The $81 billion dollars purportedly saved under the Baucus bill will quickly disappear.

This is not to say that health care reform is made any less urgent by this data.  Quite the contrary.  It’s only to show that cost estimates may not reflect the facts on the ground.

For more, also see Dave Schuler on the various myths of reducing health care costs.

Update: I should add that I agree with this new definition of poverty.  It’s much more accurate, and takes many more actual real-life conditions into account – like rising health care costs.  I also continue to support health care reform, but I think our legislators should be honest about its actual cost.  And if they’re really savvy, they should think about adding in Ron Wyden’s Free Choice proposal, which could have a cost-bending effect on all of this, possibly making this a moot point.

Originally published October 22, 2009 at True/Slant.

Perhaps the most glaring example of state-sanctioned monopoly is the public utility. You likely have one of your own. Or rather, you have one water utility, one gas utility, and one electric utility. Once upon a time, you had only one phone-service provider as well. It was a monopoly known as AT&T, created and sustained by the government. These monopolies control the generation, distribution, and prices of our most basic necessities.  They are tightly regulated, and their prices are fixed.

Somehow all this government regulation is supposed to protect consumers. But a much better protection would be to give consumers choice. In a free market, consumers would be able to move from one energy provider to the next, much like people do now with cell phones or supermarkets.

Of course, many see this sort of deregulation as a threat. The infrastructure demands are simply too great, the argument goes, the stakes too high. Who would lay all those water pipes and gas lines? And, of course, what about Enron? Won’t those greedy corporations take advantage of people if left to their own devices?

In Texas they found an answer to these questions. Texans can choose their own electric provider, and providers compete heavily for customers. The state lays the power lines – the “natural” monopoly – and then private retailers compete for customers. Customers can go to the Texas Electric Choice website to compare competing electricity retailers, shop rates, and switch to a new provider if they’re unhappy with their current one. This creates competition, and reduces administrative costs. Consumers benefit from lower prices and better service. Likewise, barriers to entry in the energy sector are far lower, allowing anyone with some capital and a business plan to start up their own energy retailer or wholesaler.

Perhaps not surprisingly then, it is Texas, not California, which has the largest installed base of wind generation capacity in the country.  This isn’t just because of all the flat, windy Texas plains either.  It’s because Texans are able to sell their wind energy to competing buyers on the market rather than simply back to their local utility.

Currently most utilities will buy back solar or wind energy at a dictated rate. This may be better than nothing, but it’s hardly likely to inspire a future generation of green entrepreneurs. In a green energy market, people could sell back their energy to the highest bidder. They could even hop on the grid and sell to individual consumers instead of utility companies. What better way to promote innovation and green job growth than to make energy profitable and competitive?

Indeed, the entire green revolution rests on our ability to put power generation back in the hands of private entrepreneurs. Electric cars require power wherever they go, and unless private sellers can offer electric “pumps” for green vehicles, consumers of electric transportation will have a hard time finding locations to “gas up.” Markets need to be able respond to the new demand generated by green vehicles, and in our current system this is all but impossible. Utilities were never meant to handle the complexity of a national, green energy market, let alone the demands of national transportation.

Just as importantly, markets are better gauges of scarcity than central planners. When power supplies fall, prices rise in response. If prices stay high, then demand falls accordingly. This allows consumers to self-ration. If we let consumers understand the real cost of their power consumption, they’ll be much more likely to turn off their lights when they aren’t being used, and much more inclined to look into alternative forms of energy when traditional energy sources become too expensive – especially if their investment in green technology could make them a buck or two down the road. Conversely, when energy is cheap, there’s no reason people should pay more simply because the local utility monopoly says they should.

Obviously the government will have its role to pay in the green revolution, but we should limit that role to laying pipes and power lines, and ensuring that when laws are broken, the perpetrators are punished. The government needs to establish fair-play rules and create a grid, but beyond that they need to let markets work, and allow competition to flourish. A lasting green revolution needs to benefit not only the earth, but the people who live on it as well. Too often the economic costs of environmentalism are overlooked, and too often it is the poorest among us who bear the brunt of those costs. Real cost-saving competition can help change that.

In the end, energy markets can spur a green revolution with real, lasting economic benefits and without the corresponding tax burden or loss of jobs so many traditional environmentalist solutions would require. The same entrepreneurial spirit that led to the Texas oil boom will lead us to a greener future, and competitive free markets, not state-sanctioned monopolies, will be the driving force behind this change.

Jason Kuznicki, a research fellow at the Cato Institute, discussed the chart below detailing federal spending increases in education and the rather flat results over the past few decades.  There has been some backlash over the significance of the numbers.  What, after all, has led to these increases in federal spending?  Special education, perhaps?  And is the data itself simply not comprehensive enough to show whether or not increases in federal spending have had any measurable effect on educational performance?

But the larger story is that during those same years that the federal government has increased its funding for education, state and local governments have become increasingly dependent on the federal government to shore up budgets, step in during a crisis, and keep them solvent.  Look no further than the recent stimulus money and the bailout of the states.  Many states could barely sustain their commitments to education budgets without federal padding.  Is there any reason to think this will change next year?  Next recession?

It’s not so much that this is a serious problem right now, either. The federal government is responsible for only about 8.3 percent of all public education spending.  The problem lies in the future, as state and local governments continue down the path of dependency, relying more and more on the federal government to catch them when they fall, and of course doing whatever it takes to make sure they qualify for the handouts.

While the feds may have a carrot and stick in mind, what actually happens is that local school districts and state governments begin to slack on their fiscal and educational commitments, and instead begin to focus on the administrative task of getting more and more federal money.  They don’t look for ways to cut wasteful spending, or increase productivity (except in the generic way the feds want them to), because they have the scent of a bailout should things head south. This works in wonkland – the experts up top get to dictate the rules of the game, and the poor saps at Joe Sixpack Elementary do what they’re told and create a bunch of eight-year-old geniuses.  But in the real world it suffers from the constraints of reality – it becomes a game of standardized tests, unwieldy uniformity, and expensive red tape.

Once you lose your fiscal autonomy, you begin to lose your creative autonomy, too.  It doesn’t happen quickly or obviously, either.  This sort of surrender is to the thief in the night.  It’s a debtor’s surrender.