It has been a while since I Blogged on Education, but it has not been because I have not been watching what has been going on. Some of my Blogs might have seemed radical, but given that what we are now doing is not working, we need to do something else. I normally start from the position that resources are limited and to optimize the output, we need to be sure that we get value for each and every dollar we spend. We now know that we spend more for education than any other country in the world. The results of those expenditures are also among the lowest. If it is our objective to improve the value, how do we go about it? Let's see.
We all should by now understand that spending more on education here in the USA is not making things better. There is data that shows since 1960 we have increased the expenditure on education by over 5 time based on current dollars while the quality of our education has, at best, stayed the same. This would tell anyone with a brain that this last 400% increase in expenditure has produced "nothing". I think you can follow this math. Let's say that our education quality is now 100% or 100 points and our expenditure is also 100% or 100 points. By dividing education by expenditure, we get a ratio of "1.0". Following me? We need some kind of index to judge whether our actions are taking us in the right direction.
Now let's try a couple of examples. What if we increased our educational expenditure by 10% to 110 points? Based on our past experience, we got "zero" for our higher expenditures, but to be fair, I am going to say that we increased the quality of our education by 1%. That is more than history shows, but let's go with it. Now let's check to see how our ratio is doing? 101/110 = 0.918. Logical so far? If so, we are going backwards in terms of getting our monies worth for education. How about going the other way? A side point. Do you think that we now have the "perfect" ratio? In the real world, there are very few systems that are at an "optimum" ratio. Based on that, I conclude that our educational expenditures and results are "not" at an "optimum" ratio either.
Now let's go the other way. We know that we got the same quality education back when we only spent 20% of what we are spending now, but I am going to give the teachers union a break here and say that if we reduced our expenditures by 10% that it would reduce the quality of our eduction by 2% even though I know it won't. Now let's check our ratio. 98/90 = 1.089. Notice, for the first time, that we are getting more value for our educational expenditure. I think we might be on a role here.
Another way to look at these numbers is in terms of the "incremental" cost and value. That is how much pop to we get for each additional buck we spend without getting all bogged down in all the money that we have already spent. This is a very logical way of looking at expenditures and is taught in every business school, but is unknown in political science and education classes. In the first case, we spent an additional 10% and got an additional 1% in value. That gives us a ratio of 1/10 = 0.1. As bad as the current educational expenditures are at a ratio of 1.0, this new expenditure is 10 times worse. If that is the case, why are we spending more on education when the pay back is so poor? That is the question that we have to ask ourselves.
Now how about when we reduced the educational expenditures by 10%. In that case, we only reduced the educational quality by 2%, as in my example. I guess that would seem bad to most people, but wait. What did we do with that 10% of the money? We gave it back to the taxpayers who paid it in the first place or we reduced our national debit. Or we traded a big cut in borrowing for a 2% reduction in educational quality. The impact in Detroit would be that rather than only 25% of kids graduated from high school, it would drop all the way down to 24.5%. My real guess is that it would not make any difference in the graduation rate for the city of Detroit.
The bottom line is that we all know that spending more is not helping our education so let's try spending less and keep on spending less until it is crystal clear that we have gone too far. At that point, stop cutting for a while and see if things stabilize before trying to increase again. I know teacher's unions and our education college crowd will scream bloody murder, but we can't continue what we are now doing knowing that it is not working and is bankrupting our country. Putting the money back in the taxpayer's pocket will do more good than continually pouring it down the teacher's union rat hole.
PS
Try this one. We have a school with 100 graduates and spend $10,000 per year on each. We do this for 13 years for a total of $130,000 for each graduate. With the example above, we increase the expenditure by 10% and get 1% benefit. We were spending for the whole 100 graduates, $13,000,000 and are now going to spend 10% more or $14,300,000 and get 101 high school graduates. Follow me so far? How much did it cost to get that "one" extra graduate? $14,300,000 - $13,000,000 = $1,300,000. Do you want to think about that again? That's right, for $1,300,000 of tax money, we got one more graduate. Did we get our monies worth? I leave it to you. It would be much worse if I used compound interest as I should have.
