The Chicago teachers’ strike and the coming pension crisis has even progressives worried that public-sector employee costs are bankrupting the city: Matt Yglesias is arguing that the teachers’ union’s proposal to raise taxes to pay for their pension programs may divert funds from more important programs:
…[T]he city of Chicago most certainly can run out of money. Things like extra money for music and art teachers could be great ideas or could be bad ones depending on where it comes from. But it’s not as if Chicago Public Schools is sitting on some giant pile of money that administrations have just been refusing to use. On the contrary, it’s actually sitting on a large unfunded pension obligation. . .
No doubt there are some more twists and turns to this. But the general point is that state and (especially) municipal governments really do operate on semi-fixed budget constraints. Even when new spending on a given program doesn’t directly crowd out spending on other programs, it does crowd out taxing capacity which ends up crowding out programmatic spending. Now maybe the Chicago budget is in fact full of spending on things that are much less valuable than extra music teachers—municipal government contains a multitude of sins—but that‘s really the case you have to make to make the case for new spending.
The larger problem here is that blue policies simply can’t be made to work. Higher taxes won’t fix the problem of an overpriced, underperforming school system; indeed, they will just drive out even more of the city’s tax-generating economic base.The city is now on a course to make all its problems steadily worse. Chicago is slowly bankrupting itself to sustain a school system it can’t afford that doesn’t educate its kids very well. Somebody, somewhere should explain why supporting slow urban suicide is a “progressive” position.