In the Coming Crisis, Bad Bureaucrats Will be the First to Go
Americans know they aren't getting results, and running out of money will only drive the point home.
As recent statistics make depressingly clear, the federal government’s long-term financial picture continues to deteriorate. The nation’s outstanding public debt, which now tops $23 trillion, already comes out to $71,875 per citizen. And despite a 4 percent revenue boost from the Trump tax cuts, Washington is still projected to add another $10 trillion in red ink over the next decade.
Entitlement finances are especially unnerving. Social Security is projected to deplete its reserves by 2034, while Medicare, with a $37 trillion unfunded liability, could go broke in as little as seven years.
Sadly, many states are not doing any better. A May 2018 report by Harvard’s Kennedy School of Government revealed that public pension funding in New Jersey and Kentucky is already at “high risk of insolvency,” with California, Connecticut, Massachusetts, Illinois, and Pennsylvania close behind. According to Pew Charitable Trusts, at least 20 state public pension programs have no more than half the assets they need to pay promised benefits.
Gloomy numbers, to be sure. But while a severe fiscal reckoning now appears all but inevitable, it will have one unexpected compensation: the century-old trend of highly educated bureaucrats assuming ever greater control over the lives of average citizens, first encouraged by President Woodrow Wilson, will finally be subject to a long-overdue performance review.
It is not simply that the coming money crunch will put a brake on funding for new or expanded government programs. So large is America’s sovereign debt, as International Monetary Fund (IMF) economists Fabien Gonguet and Klaus-Peter Hellwig make clear in their recent working paper Public Wealth in the United States, that even well-established public services will have to justify their continuation. That will mean meeting criteria far more demanding than the mere academic credentialing of their managers.
Any doubt that existing government programs can escape the coming pressure for greater accountability not only underestimates the seriousness of the looming crisis but ignores its only proven solution. As Bridgewater Associates founder Ray Dalio documents in his 2018 book Principles for Navigating Big Debt Crises, no heavily indebted government in history has ever bailed itself out without requiring all social factions to share equally in the sacrifice. Yes, the wealthy and big corporations will pay higher taxes to help meet obligations. But large federal, state, and local bureaucracies will also have to contribute in the only meaningful way they can: by getting much better results for the money they spend.
We can already glimpse this future in cities like Allentown, Pennsylvania, counties like Tuolumne, California, and states like Illinois, where the financial pressure of underfunded teacher pensions at first prompted elected officials to try to raise taxes. Fearing voter reaction, this was often done under the pretext of subsidizing new public services, such as library expansions, park renovations, and new police hires, though it did not take long for most communities to see through the ruse.
As Dalio himself could have predicted, even voters in affluent areas like Marin County, California, have stopped approving further school levies without some evidence that the public sector is doing its part. This resistance, in turn, has forced local officials to begin reevaluating how much their communities are getting for their single biggest expense: the degree-certified competence of public school teachers and administrators.
Does every school system really need a credentialed curriculum director, when any good teacher should be able to pick out the best textbooks for his or her class? Does every district really need its own administrative structure, or can some functions be shared among districts? Why are so many expensive outside consultants imported to conduct programs on gender sensitivity, environmental activism, and other non-core subjects? And why must every new diploma automatically boost the salary of the teacher or administrator who earned it, regardless of its relevance to the curriculum?
As America’s debt crisis intensifies, the degree-based structure of our K-12 educational system, which yields one of the poorest academic outcomes in the industrialized world, is certain to undergo an even more thorough interrogation, though it will not be alone. In 2019, the Government Accountability Office released what it calls its “High Risk List” of 34 mismanaged programs, which together take in hundreds of billions of dollars.
In the just the area of law enforcement, federal and state governments spend billions on credentialed experts to identify and eliminate the “root causes” of crime without the slightest indication that their efforts have ever been successful. And whether judged by the famously bungled attempt to create an Obamacare website or the estimated $52 billion in annual Medicare waste, the presumed competence of the Department of Health and Human Services bureaucracy is clearly in question.
Of course, no disciplining of the administrative state will happen without a loud protest from the one institution that’s benefitted the most from its rise—the American university. In return for providing federal, state, and local bureaucrats with the credentials and academic studies to justify their authority—creating what Claremont Institute Senior Fellow John Marini has called the “nearly seamless connection” between the academy and government—higher education has been richly rewarded with research grants, donations for capital improvements, scholarships, consultation fees, generous student loan programs, and, in the case of state schools, outright operating subsidies.
Yet the academy will find it hard to reverse the impact of the looming debt crisis on people’s already growing perception of an inverse relationship between the size of the administrative state and their own well-being. It is not simply that California, Connecticut, Massachusetts, New Jersey, New York, and other regions with relatively large government bureaucracies impose relatively high tax burdens; it’s that the quality of their services ranks comparatively low in national surveys. How does the university continue to argue for the superior wisdom of credentialed governance, in other words, when those who live under it report that they are less than satisfied?
Even many university professors have been forced to concede that much of the research supporting the administrative state has likely been compromised, consciously or unconsciously, by the primary source of its funding—the public sector. In theory, faculty have an objective “truth-finding” and “truth telling” role in our society, writes University of California-Berkeley law professor Stephen D. Sugarman, but “because of their own financial interests, [they] may be dishonest in what they say they have discovered and/or how they describe the state of knowledge in their field.” Musa al-Gharbi, a Paul F. Lazarsfeld fellow in sociology at Columbia and a research associate at Heterodoxy Academy, has similarly admitted that every academic paper that touches on “how society should be best arranged” has likely been subject to “prejudicial design” based on how the outcome would personally profit the author.
Such concessions have only been reinforced by the recent revelation that the findings of many university studies once considered “settled science” cannot, in fact, be replicated. We now know that “most published research findings [especially in the social sciences] are false,” says John Ioannidis, co-cirector of the Meta-Research Innovation Center at Stanford University. It’s an opinion he shares with The Lancet’s respected editor-in-chief, Richard Charles Horton.
How well those professors who currently benefit most from the administrative state—political scientists, sociologists, economists, and policy analysts—will adjust to the coming need for government to be more cost effective is an open question. But there is some reason to be hopeful. Just as the unwillingness of insurance companies decades ago to continue covering psychoanalysis and other lengthy therapies forced mental health professionals to suddenly discover all kinds of effective short-term treatments, so may the coming financial crisis prompt the professorate to reevaluate its current attachment to bureaucratic credentialing.
But however the academy responds to the growing pressure for more accountable governance, the looming economic reality will inevitably produce a slimmer administrative state. That’s hardly a reason to cheer the approaching debt crisis, but like every proverbial dark cloud, it at least has a silver lining.
Dr. Lewis Andrews was executive director of the Yankee Institute for Public Policy at Trinity College from 1999 to 2009. He is author of the forthcoming book Living Spiritually in the Material World (Fidelis Press).