Bailout Education?

Maybe we should bailout Education?
January 1, 2009
Ralph Walker


Seven Hundred Billion Dollars!
$700,000,000,000.00

That is a huge amount of money. Our public officials have told us that they need to spend it all to repair our financial systems, help our automakers, perhaps save our very economy. I am not sure I believe them, but they are all saying it needs to be done. They are the smart guys in Washington, right? Well I sure hope so, but lets think about this all the same.

Since it is the start of a new year why don’t we take a step back and think about what kind of numbers we are all talking about. I mean I have heard that number batted around so much in the past month that I have lost track of what that really means. In public we have been talking about spending huge amounts of wealth to basically repair a broken system, but I don’t know what 700 Billion dollars looks like. Is it all the gold in Fort Knox? Is it worth a Space Shuttle? Maybe it is worth the Yankees? I just can’t fathom its real value.

I do know a little about schools so maybe we can compare it to education spending. Now I am not an economist. I was not even a math major, but I am a strong believer in a trickle up theory of economics. It goes kind of like this. If we spend money to create maximum opportunity we can create long term growth for our society as a whole. In my life at a small scale the greatest opportunity to be had has been education, so why instead of bailing out Wall Street and the Big Three Automakers why don’t we put all of this money into educating our society. Think about it, if we spent the money on teaching our children how not to make this mistake in the future we might all be better off.

OK now I realize that this is all a crazy scheme, but just for fun lets run the numbers.

$700,000,000,000.00 could pay for:

10 Million Teachers with a $70,000 average salary for 1 year(wouldn’t it be great to give all of our teachers a raise while we are at it?)

Ok, maybe 10 Millions teachers for 1 year doesn’t make sense so how about 2 Million teachers for 5 years! Currently we have 6.8 Million teachers in the United States who all get paid an average of $46,800 per year. We have heard that we have lost 2 Million jobs in this nation over the past calendar year. This effort would replace those jobs and transform our public schools. The money spent by the federal government could be used to help transform how teachers are paid (merit pay anyone?), what kind of training they get and might even influence the way our society values this imperative profession. By adding teachers to the workforce we can raise the standards of education, properly staff all of our schools nationwide and build an educational structure that supports students, families and faculty. Teachers deserve the help and they sure deserve a raise.


Upgrade every school in America with 3.7 Million New Classrooms
(assumes a 800 sf classroom at $235 per sf)

America has lost track of the state of its schools. Our school facilities are out of date and in high need of modernization. Currently there are 95,615 primary and secondary school building in the United States. I keep hearing discussions of infrastructure projects, so how about this one. Building and updating 3.7 Million Classrooms would drive not only jobs (architects, contractors, bankers, lawyers, school administrators and eventually new teachers) but would leave our country with a tangible asset for the money spent. This money could amount to literally updating or expanding every school building in the USA with up to 38 new classrooms! Building classrooms can infuse a town with pride and change the face of a school.

Pay for the Education of every student in America for 1 year
(an average year of school costs $8,287)

Now if the federal government took on the costs for every student’s education for one year it would create a number of amazing opportunities for local school districts and municipalities. It could allow a municipality to reduce the tax burden on their residents, or it could create room in a school budget to infuse new programs that they have been differing. Each town and city needs something different. By providing a windfall that eases the local educational burden this money can build real local opportunities as varied as the needs our country faces. $700B would more than cover it. In fact we could spend over $12,000 for every student giving schools an even better budget to work with.

These potential upgrades to education would pay dividends for decades to come. The better our schools are, the better our students will be as they complete their education. Census data shows that students who finish High School earn an average of $9,000 a year more that their counterparts who don’t, and those who finish college earn almost double what the high school graduates make. Education is one way to rebuild our wealth in America. The world needs well educated productive people to solve its problems. We can provide that.

Now I am not suggesting we federalize education, but why not think about some better ways to use our tax money to change the way the system is working. I do recognize that our economic system is in heart failure so instead of taking the whole $700B we could try to do something more modest. Maybe some of these proposals are a little more palatable:

Let’s spend some federal money to teach household economics to every student who graduates high school. Basic skills in personal budgeting, long term and short term investing, personal credit, buying a car, buying a house and saving a little for a rainy day could have saved thousands of families from the economic crisis they face now. We could make this happen through a few simple steps; develop a federal curriculum, provide nationwide teacher training, and launch a national promotion program. I bet the whole thing could be instilled for a cool 150 Million dollars. That still leaves $699,850,000,000 to spend on the banks and the automakers.

Or how about this one; We can spend 5 Million Dollars at each of the top 1000 universities (yes one thousand, there are over 4000 colleges and universities in the US and we have a lot of amazing schools) in the country to start a mandatory economics class for every liberal arts student in the country. The money could fund new teachers, books, even classroom space to make sure every student who has a Bachelor’s degree or greater in this country can follow the economic health of our nation. This proposal would leave our coffers with $694,850,000,000 (I already spent the money on the first proposal)

All right, this is my final proposal. Put some money in basic math education at the primary levels. I don’t think we need to spend a huge amount, say 1 Billion or 0.1285% of the total bailout package to make sure every school in America has the tools it needs to teach math properly. I would love for my children to understand the difference between 1 Million, 1 Billion and 1 Trillion so they can properly compare the salaries of major league sports stars, the GDP of developing countries, the amount of money Bill and Melinda Gates give to charity and this crazy Bailout that we are all burdened with. For those of you keeping score at home my three proposals left the bailout package with $693,850,000,000 to spend on automakers, banks and whoever else needs the help to get our economy back on track. I don’t know where they got the number of $700B to begin with so I am sure they can make it work for a little bit less.

The simple fact is that as a nation we do not even understand what is happening to all of this money. We are watching it fly out the door, but can not explain to each other, let alone our kids why it happened or who it happened to. We have failed to prepare our society for this type of crisis and we must build new safeguards to protect future generations from the same issue.

At the end of the day, if we can’t touch the bailout money maybe we can cut back on buying all of those stealth bombers and use that money for some of these proposals. I know it is only 1.3 Billion at a time, but hey, it’s a start.


* All statistics and figures quoted were direct from the Census. See http://www.census.gov/ for more information.