Economist Writing Every Day

If you follow libertarian media such as Reason Magazine or its ancillaries, then you are well acquainted with the humdrum of “it goes without saying that most US programs should be ended“. They kind of just say this and then continue with their news. One of the favorites is to say that we should get rid of the Department of Education (ED). After all, 90% of K-12 education is paid for by states and localities. Here I was thinking “what does the Department of Education even do”?

Agreement is different from trust. I trust the Brookings Institute. They have a nice explainer on what ED does. It’s a quick overview and has plenty of the appropriate citations. I learned that most of what ED does concerns K-12 and is achieved through grants that have strings attached. Funding primarily goes to serving “educationally disadvantaged” communities (that have a high poverty rate). Funding also goes to programs for disabled children, minority education programs (like Howard University), and Indian tribes. They also administer Pell Grants and fund & regulate college loans (which are privately administered).

ED’s appropriated budget is online for anyone to see and includes pretty good detail about costs. The total discretionary cost of FY 2024 was $79 billion. The “mandatory” spending, which does not need to be voted on by congress every year, was $45 billion. For context, the entire federal FY 2024 expenditure was $6.75 trillion. So, eliminating the department of education *and* it’s responsibilities (an unpopular position) would reduce federal expenditures by 1.8%. For even more context, the budget deficit is $1.83 trillion or 27.1% of total federal expenditures. Eliminating ED and consolidating its responsibilities to other departments would save $0.6 billion. That assumes eliminating program administration, the ED office of civil rights, and the ED office of the inspector general.

I won’t claim that ED does nothing good. They have a clearing house of educational research, which is a public good. They also provide funding for programs for disabled children, which is a kind of insurance to the random event of bearing and keeping a disabled child (educational and medical resources get very expensive very fast). Similarly, programs for deaf and blind individuals probably enjoy economies of scale at the national level. The real question is whether various program ends would be more efficiently achieved by other means. Clearly, the programs themselves would likely not exist without ED. But would any/some/all of the goals be achieved without ED’s involvement? This doesn’t even address whether some programs are outright harmful.

For example, there are decent arguments that we over-invest in higher education in the US – particularly for bachelor’s programs. If one-third of higher education is just signaling pre-existing characteristics that are relevant to productivity, then it’s waste to the extent that a less costly signal could replace it. Bryan Caplan argues that we are engaging in a costly arms race that has net social costs.

We can also ignore whether programs are efficient or harmful and just focus on whether we like them. Do I think that Howard University should have received $304 million dollars last year, $226 million of which was not for their hospital? Just because it was a school that was historically available to black students? Probably not. In fact, I bet that there’s a lot of items like that. It’s not waste, nor necessarily ineffective, nor obviously harmful. It’s just that a lot of people have a hard time prioritizing the items that compose the Department of Education’s budget. At the same time, neither administrations nor congress has an incentive to go in with a scalpel. Populism plays a role on both sides. One side says that the federal government doesn’t belong in the “indoctrination” business. The other side says “who will build the schools?”. These aren’t the most attractive or enlightened perspectives.