‘Funding’ Education

The Department of Education is boasting that the Recovery Act (read: spending bill) “continues to support over 300,000 education jobs.” A recent press release notes that these funds are “being used to fill over $40 billion in projected state education budget shortfalls for FY ’09 and FY ’10.”

Lost in the release is the fact that the money used to “support” these government jobs is money that comes out of the private economy. Governments cannot create a single government job without first taking money from the private sector. Less money in the private sector means less money for investment in private businesses, which create most jobs.

The reason that state and local budgets are experiencing shortfalls is because the economy is in trouble and they cannot print money like the federal government can. This printing can lead to inflation — a hidden tax on everyone. Somehow, the understanding that money from the government has to eventually come from somewhere is often lost in analysis of government efforts to “fund” certain efforts supposedly aimed at boosting the economy and jobs.

So, while government officials are touting the benefit such “funding” (read: spending money government doesn’t have) has on the economy and jobs, remember there is no free lunch.

One Response to ‘Funding’ Education

  1. […] ‘Funding’ Education (February 4, 2010) […]

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