Just as the Cash for Clunkers program spurred false demand for new car purchases that later resulted in months of poor performance for those in auto industry, we are starting to see a similar pattern emerge where other stimulus dollars spent.  The most recent culprit: the public education system.  As many states faced massive budget shortfalls, they decided to use stimulus money to avoid having to layoff workers in the public education system.  Now that these Recovery Act funds have been exhausted, the budget shortfalls will now be more substantial.  What would have been a controlled and steady stream of layoffs will now most likely be a tsunami.  Alas, the Recovery Act would be more aptly named the Prolonging the Inevitable Act.

Inevitably, schools will be facing deep cuts as they run out of stimulus money.  The stimulus money has also been sheltering schools from the economic reality that property tax collections are also dropping quickly as real estate values drop.  The shortfalls that schools will be facing will be steep, and those who thought their jobs were saved by the stimulus will soon be unemployed.

If you get really good at math, maybe one day you can run for Congress

I know a lot of school administrators, and they pretty much lose sleep over this.  They are doing everything they can think of to try to not layoff their staff.  Where the loyalty here is admirable, the excessive inefficiency characteristic of the public education system is a disgusting waste.  If a for-profit private school was facing the same budget problems that face most American schools, they would probably take the necessary action of laying off staff they could no longer afford.  Affordability is a word that most government agencies seem to completely ignore.

Ultimately, what I think about this is pretty irrelevant.  I feel bad for the many education workers who are going to lose their jobs.  I wonder what criteria school administrators will use to determine who gets fired.  Since the NEA resists any movement towards tying teacher’s pay to performance, so if performance is irrelevant how do you determine who to let go?  This is where economics will finally kick in.  Schools will get rid of the most expensive employees, this will typically mean those with Master’s degrees and PhDs.