Wednesday, May 06, 2009
Stimulus Money Destroys Incentives
Is it possible that the $1M Muscatine Schools will receive in stimulus money will destroy incentives to learn new skills or to work toward efficiency? Instead of going back to school and improving my algebra skills, I now might say, "I don't need the skills since the government has guaranteed my job." I read in Burton Folsom's book, New Deal or Raw Deal, that neighboring states bordering Tennessee grew more in income than the high subsidized Tennessee when the TVA was built to provide cheap power. According the the book, people had little incentive to move off the farm because energy was so cheap. I think the same is true with education. With no incentives, teachers will not improve.