Other People's Money Part II

By Joseph Ashby

A couple of days ago, I wrote an AT blog post on a New York Times story about the Stimulus bill’s failure to stop a “green” company from going through major lay-offs.

On Monday The New York Times ran a story on how the Stimulus has “failed to prevent the most extensive school layoffs in several decades.” The Times went on:

Children are returning to classrooms across the nation during one of the most tumultuous periods in American education, in which many thousands of teachers and other school workers — no one yet knows how many — were laid off in dozens of states because of plummeting state and local revenue.

Since most K-12 funding comes from local sources, individuals have greater power to decide the amount and use of school funds, a fact the Times laments:

In Ohio, students in the South-Western City district south of Columbus returned to schools with no sports, cheerleading or band, all cut after residents voted down a property tax increase.

Under the implicit assumption that local residents don’t know what’s best for them and their children, Obama and the Congress dedicated $100 billion of the Stimulus to school funding. But that money hasn’t been enough to prevent extensive school lay-offs.

In both public and private sectors, Obama’s big plans have fallen short or completely flat. Even after spending trillions, the president couldn’t make his promises come true. The late Milton Friedman explained why:

There's been one underlying basic fallacy in this whole set of… [economic] measures, and that is the fallacy…that it is feasible and possible to do good with other people's money.