News - Bill's Blog

Hazardous-duty pay for Senator Elizabeth Warren?

October 22, 2019

United States Senator Elizabeth Warren (Massachusetts) walked the picket lines in Chicago, Illinois, today, in support of the Chicago Teachers Union striking  for higher pay and benefits, and smaller class sizes. 

The hazardous part was actually weather-related. High wind warnings in Chicago today, 50 degrees, and occasional slashing rain showers. 

Taxpayers and citizens should take note of the timing of Warren’s appearance for another reason. Senator Warren’s support for unionized Chicago teachers comes amidst her new plans to develop hundreds of billions of new federal spending for K-12 public education, historically a province of state and local government.

Whether taxpayers everywhere should come up with money benefitting irresponsible jurisdictions like Chicago raises important equity and sustainability questions. 

Chicago and other financially desperate school systems lack a “solution” available to the federal government, in the short run. State and local governments can’t print their own money, and the federal government can. 

Massive new federal spending on state and local public education can be viewed as a bailout of sorts. In fact, supporters of new federal money for state and local governments sometimes point to the federal government’s response to the 2008-2009 financial crisis as justification for their plans.

“If the government could just bail out the big banks, poof, like that, why shouldn’t we get equal treatment?” 

This incentive highlights an issue about accounting for the costs of the 2008-2009 financial crisis. Money for things like the federal student loan program and new federal spending for state and local government programs like public education doesn’t just come out of nowhere – even for entities that can print their own money.

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