September 21, 2012
LOWER EDUCATION BUBBLE UPDATE: Progressives Sour On Chicago’s Teachers. “The Chicago teachers’ strike and the coming pension crisis has even progressives worried that public-sector employee costs are bankrupting the city: Matt Yglesias is arguing that the teachers’ union’s proposal to raise taxes to pay for their pension programs may divert funds from more important programs. . . . The larger problem here is that blue policies simply can’t be made to work. Higher taxes won’t fix the problem of an overpriced, underperforming school system; indeed, they will just drive out even more of the city’s tax-generating economic base. The city is now on a course to make all its problems steadily worse. Chicago is slowly bankrupting itself to sustain a school system it can’t afford that doesn’t educate its kids very well.”
Something that can’t go on forever, won’t. That observation, from economist Herb Stein, is likely to be the sum-up aphorism of this decade.