Kevin Collins: Education key to economic growth

The reauthorization of the law that governs your federal student loans, the Higher Education Act, this week was shelved until after the election, but the debate surrounding the bill is a case study in the manner in which education policy is (and is not) discussed.

Politicians often speak about educational opportunity leveling the playing field, and rightfully so, but more important than the affect education has on the economic situations of individuals is the effect that education has on our generation as a whole. In the Information Age, government investment in education is not just a nicety but a macroeconomic necessity. President Eisenhower's capital investment in the interstate system created a generation of American growth. Today, what we need most is an investment in the human capital of the American people, an investment crucial to our generation's future economy. That investment must be in education.

In his recent book Reason, Robert Reich, President Clinton's secretary of labor, argues that rather than blaming our nation's companies for investing in countries other than America -- outsourcing jobs -- we should examine how we can get other countries to invest here. Reich explains that there are fundamentally two reasons to invest in a nation: lower costs of doing business (including costs of labor and materials), or higher efficiency and productivity. Supply-side economic theory is based largely on the idea that we must lower business costs to make America more hospitable to investment and thus grow the economy. Adherents to this theory propose radical reduction of taxes, corporate subsidies, and anti-union policies.

However, America will never be able to cut labor costs below those in Asian and Latin American countries. America's strategy to attract investments needs to change; we need to increase productivity in the Information Age sectors that we can work the best. Robert Reich proposes an alternative to the failed trickle-down theory, which he calls "bubble-up economics." Rather than continuing to cut taxes for the wealthy, we must adopt a growth strategy that uses tax dollars to create lots of good jobs and grow the economy from the bottom up. That strategy is an investment in education.

Many reading this column will at this point be screaming that President Reagan and the current President Bush's economic policies have worked. Rather than quibbling over various interpretations of economic history, let's look at what economic policies will work for the future. Republican policies that create massive deficits to fund permanent tax cuts simply do not provide a stable base for future economic success.

Most Republicans used to think that way too when they were deficit hawks. But sadly, somewhere between President Bush's first round of tax cuts for the wealthy and his third, concerns for fiscal responsibility got left behind. Tax cuts can certainly provide a short-term fiscal stimulus when they are used to prime the economic pump. But this president has pushed for tax cuts regardless of the current economic environment. This strategy is not sustainable, and "the long term" is the world in which our generation must some day live.

And that brings us back to education, an economic imperative more important to long-term growth than any package of tax cuts. It should hardly be surprising to hear that education matters in the Information Age, but our political leaders haven't gotten the message. Rather than invest more, President Bush has proposed cutting Pell Grants and refused to give states the money they need to live up to the mandates of the No Child Left Behind Act. We should be doing just the opposite, spending more on student loans and grants, making college tuition tax deductible, and putting much more money into K-12 education so that all students can one day contribute to our economic growth.

True, spending more money on education has long been criticized as a failed policy from the right. Critics argue that inefficient school boards create a situation in which increased funding does not produce increased results. But what I'm proposing is not just marginal increases in funding, but investments on the scale of Eisenhower's investment in the interstate system -- and that sort of funding can surely produce results. Pay teachers more and high quality professionals will enter the field. Reduce class sizes and spend more on teaching tools and student performance will rise. Just look at wealthy suburban and elite prep schools from which many Penn students graduated. Some will say that these parents are more involved, or that entrance exams create a pre-selected high-performing group, but that money makes a significant difference is an undeniable fact.

Come November, we need elect leaders who understand the economic importance of funding education. College loans matter to our generation, and not just because we're paying them. Rather, college loans, and educational funding in general, will provide the infrastructure for the economy in which we will search for jobs, buy houses and cars, and ultimately send our own children off to college.

Republicans and Democrats alike, we should be able to agree that there are times when the Federal Government must make a capital investment in the America. At times, we make investments in physical capital like roads and bridges. Now, we must invest in human capital. After all, there are few investments better, or more important, than those we make in the American people.

Kevin Collins is a junior political science major from Milwaukee, Wis., and editorial page editor of The Summer Pennsylvanian.

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