Of Financial Capital and Human Capital: Why We're Bailing Out Wall Street While Allowing Our Schools to Get Clobbered
Our preoccupation with the immediate crisis of financial capital is causing us to overlook the bigger crisis in America's human capital. While we commit hundreds of billions of taxpayer dollars to Wall Street, we're slashing our outlays for public education.
Education is largely funded by state and local governments whose revenues are plummeting. As consumers cut back, state sales and income taxes are shrinking; three quarters of the states are already facing budget crises. State revenues account for about half of public school budgets and most funding of public colleges and universities. In addition, as home values drop, local property taxes take a hit. Local property taxes account for 40 percent of local school budgets, on average.
The result, across the nation: Teachers are being laid off and new hiring frozen, after-school programs cut, so called "noncritical" subjects like history eliminated, schools closed, and tuitions hiked at state colleges and universities.
