Why isn't the government doing all it can to cut the deficit?

There's a whole class of policies which could cut the deficit in the medium to long term, which the government is ignoring. It's a sign of how weak public debate has become.

"Save Money, Improve Student Learning, and Boost The Economy By Paying Teachers to Quit Their Jobs", writes Slate's Matt Yglesias.

The rationale is simple. Teaching, particularly American teaching, is a profession where pay scales very strongly with experience. Thanks to strong unions and a relatively flat hierarchy, it's common for teachers to receive annual pay increases. As such, a teacher with 25 years experience will end up having a salary significantly higher than a teacher with five years experience.

That's fine if talent also scales with experience; but if it doesn't, it may be the case that it's cheaper to pay veteran teachers off, and hire younger ones. Yglesias writes:

Yet when Maria Fitzpatrick and Michael Lovenheim looked at an early retirement incentive program that Illinois implemented in the mid-1990s they did not find evidence of this adverse impact: "We find the program did not reduce test scores" they write "likely, it increased them, with positive effects most pronounced in lower-SES schools."

That finding probably isn't applicable to the British education system for a number of reasons: our pay agreements are different, our school structures are different, and frankly, the fact that American test results are the determining factor of success in the study does not inspire confidence. But Yglesias' suggestion of how that finding be used is generalisable. He argues:

The federal government could borrow a bunch of money at today's low interest rates and make it available to states and cities that want to pursue cost-saving early retirement incentive programs. The cash up front aspect of the ERI program would goose the economy in all the usual ways. But the long-term savings to state and city governments would improve the long-term fiscal outlook and thus boost "confidence" (or whatever). Kids would be no worse off in school. Districts would have to hire a bunch of new teachers, opening up some job opportunities for young people. And it's all voluntary—veteran teachers who'd rather stay on the job and get paid what they're owed can do so.

There's a gaping disconnect between the number of interventions which we know pretty well can save money in the long term, and the number we actually enact. Whether or not this particular one would work remains to be seen, but in general there are, at any one time, a huge number of things the state could do to lower its spending in the long term.

In the British context, a lot of them fall under the banner of "reversing the cuts"; the false economy by which funding for crucial services like legal aid or preventative healthcare was cut means that, while spending in the first years will be lower, in the long term they won't do anything for the deficit at all. (Or, even worse, a hard limit on all spending might result in the deficit genuinely being reduced, but at the cost of vast reductions in human welfare).

Of course, rhetoric mocking the concept of "borrowing more to borrow less" renders this entire category of valuable policies unsupportable, either by the Government, which would be accused of hypocrisy, or by the Opposition, which appears to have been stung too frequently by the barb to risk giving more ammo. So we're not likely to see deficit funded payoffs of veteran teachers any time soon, and so the government will continue to struggle to keep its borrowing low in the long term.

A teacher, teaching. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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It's easy to see where Berlin is being rebuilt – just hit the streets

My week, from walking the streets of Berlin to class snobbery and the right kind of gentrification.

Brick by brick, block by block, the people are rebuilding the city once called Faust’s Metropolis. To see it clearly, put your boots on. One of the most bracing walks starts by the Gethsemane Church, which served as a haven for dissenters in the last days of the GDR and takes you down ­towards the Hackescher Markt.

Here, in what is still the eastern half of a divided city that wears its division more lightly, is a Berlin experience both old and new. In three decades of frequent visits, it has been fascinating to note how much this part of town has changed. Even a decade ago these streets were rundown. With crumbling buildings showing bulletholes, it wasn’t hard to imagine what the place looked like in 1945. Now there are lilacs, blues, and yellows. Cafés, bars and restaurants abound, serving the young professionals attracted to the city by cheap rents and a renewed sense of community.

 

Breaking the fourth wall

Looking north along Schliemannstraße, you’ll find a delightful vista of well-tended balconies. It’s a pleasant place to live, notwithstanding the gaggle of grotesques who gather round the corner in the square. On Kastanienallee, which forms the second leg of the walk, an old city feels young. It’s a kind of gentrification but the right kind. There’s more to eat, to drink, to buy, for all.

Berlin, where Bertolt Brecht staged his unwatchable plays, was supposed to have been transformed by a proletarian revolution. Instead, it has been restored to health by a very middle-class one. Germany has always had a well-educated middle class, and the nation’s restoration would have impossible without such people. The irony is delicious – not that irony buttered many parsnips for “dirty Bertie”.

 

The new snobbery

The British Museum’s survey of German history “Memories of a Nation” is being presented at the Martin-Gropius-Bau as “The British View”. Germans, natürlich, are curious to see how we observe them. But how do they see us?

A German friend recently in England  said that the images that struck him most forcibly were the tins of food and cheap booze people piled up in supermarkets, and the number of teenage girls pushing prams. Perhaps Neil MacGregor, the former director of the British Museum who will shortly take up a similar role here at the new Humboldt Forum, may turn his attention to a “German View” of the United Kingdom.

There’s no shortage of material. In Schlawinchen, a bar that typifies Kreuzberg’s hobohemia, a college-educated English girl was trying to explain northern England to an American she had just met. Speaking in an ugly modern Mancunian voice that can only be acquired through years of practice (sugar pronounced as “sug-oar”), she refer­red to Durham and York as “middle class, you know, posh”, because those cities had magnificent cathedrals.

When it comes to inverted snobbery, no nation can match us. To be middle class in Germany is an indication of civic value. In modern England, it can mark you as a leper.

 

Culture vultures

The Humboldt Forum, taking shape by the banks of the Spree, reconsecrates the former site of the GDR’s Palace of the Republic. When it opens in 2018 it will be a “living exhibition”, dedicated to all the cultures of the world. Alexander von Humboldt, the naturalist and explorer, was the brother of Wilhelm, the diplomat and philosopher, whose name lives on in the nearby university.

In Potsdamerplatz there are plans to build a modern art museum, crammed in between the Neue Nationalgalerie and the Philharmonie, home to the Berlin Philharmonic. Meanwhile, the overhaul of the Deutsche Staatsoper, where Daniel Barenboim is music director for life, is likely to be completed, fingers crossed, next autumn.

Culture everywhere! Or perhaps that should be Kultur, which has a slightly different meaning in Germany. They take these things more seriously, and there is no hint of bogus populism. In London, plans for a new concert hall have been shelved. Sir Peter Hall’s words remain true: “England is a philistine country that loves the arts.”

 

European neighbours

When Germans speak of freedom, wrote A J P Taylor, a historian who seems to have fallen from favour, they mean the freedom to be German. No longer. When modern Germans speak of freedom, they observe it through the filter of the European Union.

But nation states are shaped by different forces. “We are educated to be obedient,” a Berlin friend who spent a year at an English school once told me. “You are educated to be independent.” To turn around Taylor’s dictum: when the English speak of freedom,
they mean the freedom to be English.

No matter what you may have heard, the Germans have always admired our independence of spirit. We shall, however, always see “Europe” in different ways. Europe, good: we can all agree on that. The European Union, not so good. It doesn’t mean we have to fall out, and the Germans are good friends to have.

 

Hook, line and sinker

There are fine walks to be had in the west, too. In Charlottenburg, the Kensington of Berlin, the mood is gentler, yet you can still feel the city humming. Here, there are some classic places to eat and drink – the Literaturhauscafé for breakfast and, for dinner, Marjellchen, a treasure trove of east Prussian forest delights. Anything that can be shot and put in a pot!

For a real Berlin experience, though, head at nightfall for Zwiebelfisch, the great tavern on Savignyplatz, and watch the trains glide by on the other side of Kantstraße. Hartmut Volmerhaus, a most amusing host, has been the guvnor here for more than 30 years and there are no signs that his race is run. The “Fisch” at twilight: there’s nowhere better to feel the pulse of this remarkable city. 

This article first appeared in the 01 December 2016 issue of the New Statesman, Age of outrage