Tackling California’s Budget Deficit
NPR recently did a program on Adult Education Cuts in the state of California. Guests on the show painted a stark picture on how essential spending would stop. One of the guests caught my eye. He is the newly elected head of the budget committee (an unenviable position), and he tried to put things in perspective for the listeners on how bad the deficit is. Listening to him sparked some reflections, which I posted on the show’s comments. Here they are:
I am surprised by the polarized rhetoric of the participants – it seems that people have bought into the black-and-white trap of tax-cuts vs no tax-cuts. By training, I am a decision analyst (got my Ph.D. from Stanford in this discipline), and one of the first things we learn is that advocacy-driven decision-making is the worst way to make a decision. Instead, the notion is to make a high quality decision, which has six elements – appropriate frame, creative alternatives, reliable and useful information, clear preferences, sound logic and commitment to action.
I will focus on only one of these elements – creative alternatives. One of the guests who is the new chair of the budget committee gave a perspective on the billion dollar figures we are hearing, of which, the University of California forms a big part. He gave a drastic scenario – that if we fire everyone associated with the UC systems, then we’d save $X billion. If we play with that doomsday picture a bit, we would find ourselves wondering why such a successful and famous university system is run by the government? Perhaps it is time to lead a campaign to get the UCs run by an educational trust (involving perhaps the same people who run it now), and have them reach out to their famous alums to raise endowment money. They could also reach out to big businesses and tell them that this would be a way to help stimulate research and also get the government off our backs from contemplating tax increases. It is not unimaginable that large endowments could be raised to get the UC system off the government grid, and reduce a huge deficit burden of the state.
Next, the discussants talked about the adult education crisis. What is strange about this is how come those receiving the benefit of the education cannot pay for it? The usual argument is that they need the education in order to find a better job. But the unstated assumption is that we are limited to only one form of financing – which is, pay now and take the class, and hence, many people are excluded from such a mechanism because of their current lack of resources. We can easily challenge this – what about future-income loans? People can sign up for creative financing options, where they take out loans that involve sharing a percentage of their future income provided it is above a certain minimum level. That way, entrepreneurs can get into this, and work on providing high-quality adult education at a reasonable cost. This is just one idea, but brainstorms like this can surely produce many creative ideas.
Finally, coming to the question of children’s schools which we want to sustain, I doubt there are many people who are against funding such schools. The issue is, we are forced to sustain so many other things we don’t like that we have no bandwidth left to support the important things. So, as a stopgap measure, instead of a tax increase vote, why not let the ultimate decision-makers, the public, vote on how their tax gets used. Without increasing or decreasing it, let us lay out all the important areas of funding, and let people decide if they want their taxes supporting military research, education, civic administration, etc.
This is just a sample of how value can be generated by following a high quality decision-making process, and is the result of transcending a “how-can-government-solve-this” frame to a larger “how-can-this-be-solved?” frame.
I would encourage NPR not to get taken in by the rhetoric of either side of the current political divide and challenge political discussants to move beyond their limited frames.