Preschool Matters… Today!

I have written in recent weeks about the difficult circumstances in which middle- and low-income families have found themselves over the past decade, as amply illustrated by the most recent census report, and pointed out the hardships the recession is placing on public budgets in general and early childhood education in particular. That this confluence of events poses a grave danger to the progress made in early childhood education should be apparent to one and all. Yet it apparently is not in this political season of achieving fiscal austerity at all costs.

This is an ominous sign for those of us whose responsibility it is to look at public investments through the prism of the returns they provide the nation in the form of future human capital formation (better-educated workforce) and our global competitiveness. Erskine Bowles and Alan Simpson, chairmen of the president’s deficit commission charged with making recommendations for returning the nation to prosperity recognize the need to invest in education. But they were unable to convince enough elected officials in their group, whose ears are bent to the call for austerity sweeping the country, to sign on to the report.

Now come two reports that offer sensible analyses and additional prescriptions for making critical investments in programs like early education while setting the nation on a course to recovery. Both point out that at this crossroads in our economy, austerity at this point in time represents a false cure. One, a special report in the November issue of The American Prospect, devotes 10 articles to various aspects of the economic debate. Its purpose is, as editor Robert Kuttner writes, to disentangle the proper sequencing of recovery spending and deficit reduction, agreeing with Bowles, Simpson, Alice Rivlin, Pete Domenici, and others that the nation needs better fiscal balance once we emerge from this deep recession. But now, when unemployment is unacceptably high and families are struggling, is no time to cut back on social investment. In fact, stepping up social investment at this time is critical to achieving the recovery the deficit hawks seek through austerity.

In the Prospect report, political scientists Christopher Howard and Richard Valelly aptly refer to the post-election obsession with austerity as “deficit-attention disorder” pointing out that even though Americans are worried about the deficit, the great majority of polls show they are far more worried about the economy’s weakness than the nation’s public debt. Once again, the public is displaying more wisdom than many of those representing them in Washington give them credit for. Perhaps some recall that during the Great Depression, it was the premature fiscal tightening that pushed the U.S. economy back into recession — an outcome we now run the risk of repeating.

Economist James K. Galbraith points out that fully half the increase in the budget deficit is due to collapsing tax revenues. Less than 10 percent is due to increases in discretionary public expenditure such as the American Recovery and Reinvestment Act. He separates the deficit into the active deficit — comprised of social spending for things like stimulating employment and education — and the passive deficit, which is incurred due to high unemployment which reduces tax revenues necessary to pay for public spending. It is, in fact, this passive, recession-induced deficit that makes it impossible, no matter how much austerity is imposed on social spending, to wipe out the public debt. Read the rest of this entry »