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"America's public schools have warehoused three million people in jobs that do little to improve student achievement..."

Cato Institute Scholar Andrew Coulson in the Wall Street Journal 
July 10,2012
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"The implication of these facts is clear: America's public schools have warehoused three million people in jobs that do little to improve student achievement—people who would be working productively in the private sector if that extra $210 billion were not taxed out of the economy each year."

So, the teachers eat the money they earn?  They don't spend it on houses, cars, insurance, medical bills, restaurants, and so on?  That $210 billion isn't "out of the economy".
 
Travis, apparently they do: with that money removed from the private sector, there's less capital available for building houses, providing medical services, and producing food. Guess they really ARE eating the money...
 
How is that less money in the economy?  Public sector workers spend their money just like anyone else.
 
Because the money is taken out of the hands of people trying to build houses, provide medical services, and grow food.

You seem to argue that the money goes right back in, but that ignores the practicality both of the delay between the taking and the giving back, and the practicality involved in uncertainty when trying to raise capital for these activities. 

It's sorta like ignoring the line losses in transmission of electricity: you want to route the money around the system, passing it through a few more pockets on its way. However, that ignores the cost of that routing in the first place.
 
Ok, so it's not a perfect dollar for dollar return because there is bureaucracy involved, but it is incorrect to say that the full salary of a public employee's pay is money that is "out of the economy".  Cops, firefighters, and teachers all spend their money on bills, cars, houses, and consumable goods and contribute to the economy just like everyone else.

Also, since we have payroll taxes which are collected pretty much constantly, what would you say the delay actually is?
 
Oh, no, it is BY DEFINITION money taken out of the economy. After all, an economy is a system of voluntary exchange, so if you in-voluntarily take money, you're removing it from the economy. That you then put it back in is a different matter.

And no, public employees (of which I am one, BTW) don't contribute to the economy "just like everyone else." Everyone else has to convince people to hand over their cash in return for a service. Everyone else has to prove their value at every transaction. Public employees get to skip that kind of important step.

So the delay: when people are taxed and (just as importantly) threatened with taxation, they don't so much have that money to spend anymore. The resource is removed from them. But the public employee doesn't spend the money the moment it's removed from the citizen; instead the money hits the books of the bureaucracy, then it's eventually transferred to the employee account, then the employee eventually decides to spend it. Each of those steps takes time.

In fact, as I said, even the threat of taxation removes some spending power from the guy about to be taxed. He can't operate based on the assumption that the money will be there two months from now if it's going to be taxed away next month. Therefore, not only is there a delay, but the delay shows up EVEN BEFORE TAXATION OCCURS. 

It might be a month between a tax levy and a paycheck increase, but it might be six months between when a business scales back spending in anticipation of the tax, and when the paycheck is issued.
 
If I earn $50,000 on a public sector salary and spend $43,500  on the same types of goods everyone else spends their money on and invest the difference in a retirement account based on Wall Street, money is in the economy.  That is the point.  The article suggests that the salary paid to teachers is somehow gone, and it isn't.  It also suggests that public school teachers aren't productive members of society which is ridiculous.

Public sector workers still have to fill a need, they aren't hired (usually) to just sit around.  I assume if you decided to stop performing the tasks you were hired to do they would start the process of letting you go.

Taxes are a part of civilization as you clearly realize.  The only argument is how much to tax and it's the oldest argument around.  If you have enough demand in your business you will hire workers without consideration of next year's taxes, the only people the tax thing really affects (as far as hiring is concerned) are the people that are right on the cusp.  And yes they might hesitate at times.
 
Most of the loss is before you get paid. THAT is the point.

So let's go through this. You're talking about a $50,000 salary. Where does that come from? Obviously it comes from taxes extracted from people and businesses who would have liked to spend it on employees, food, medical care, and everything else. From the moment the money is extracted from them to the moment it hits the employee paycheck--which is not instantaneous--the cash is pulled out of the economy. That alone can be months of wait.

But it's worse than that: the business might have wanted to hire or purchase something in January on credit to be paid back in June. The bank would take into account the tax hit, so it wouldn't be so eager to let the business have that line of credit. Thus, the business would be prevented from using resources in January--it would not hire or buy--because of a tax payment due in June that itself wouldn't pay an employee until July.

So you see the problem? Yes: the money IS taken out of the economy EVEN IF YOU DON'T COUNT BUREAUCRATIC INEFFICIENCIES, which are huge. In the VERY BEST CASE scenario, the money is extracted from the economy.

Just because it's returned at a later date doesn't make it even Steven.

As for employees aren't hired to sit around... are you kidding me? Sure they are. And why not? Political processes don't have to answer to a bottom line!
 
I see your point, it certainly effects the economy.  The money isn't forever gone as the article seems to suggest, but there is a negative impact.

Thanks for the discussion.
 
No, the economy isn't magic. Hell, the economy technically isn't anyTHING at all: "the economy" is code word for the combined voluntary actions and valuations of all these human interactions and humans themselves. But that ends up being key: any artificial "guidance" by government has to come at the expense of this volunteerism, by definition.

Thus no matter how you try to arrange for a net zero in accounting, returning money and whatnot, it's too late. The moment resources are reallocated by force, something is lost that cannot be restored.

In some cases that's an acceptable loss, but we can't kid ourselves that there is no loss. We can only go looking deeper into the accounting to find places where the money doesn't add up. This is the real world projection of that abstract loss.
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