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.

Photo: Getty Images
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What do Labour's lost voters make of the Labour leadership candidates?

What does Newsnight's focus group make of the Labour leadership candidates?

Tonight on Newsnight, an IpsosMori focus group of former Labour voters talks about the four Labour leadership candidates. What did they make of the four candidates?

On Andy Burnham:

“He’s the old guard, with Yvette Cooper”

“It’s the same message they were trying to portray right up to the election”​

“I thought that he acknowledged the fact that they didn’t say sorry during the time of the election, and how can you expect people to vote for you when you’re not actually acknowledging that you were part of the problem”​

“Strongish leader, and at least he’s acknowledging and saying let’s move on from here as opposed to wishy washy”

“I was surprised how long he’d been in politics if he was talking about Tony Blair years – he doesn’t look old enough”

On Jeremy Corbyn:

"“He’s the older guy with the grey hair who’s got all the policies straight out of the sixties and is a bit of a hippy as well is what he comes across as” 

“I agree with most of what he said, I must admit, but I don’t think as a country we can afford his principles”

“He was just going to be the opposite of Conservatives, but there might be policies on the Conservative side that, y’know, might be good policies”

“I’ve heard in the paper he’s the favourite to win the Labour leadership. Well, if that was him, then I won’t be voting for Labour, put it that way”

“I think he’s a very good politician but he’s unelectable as a Prime Minister”

On Yvette Cooper

“She sounds quite positive doesn’t she – for families and their everyday issues”

“Bedroom tax, working tax credits, mainly mum things as well”

“We had Margaret Thatcher obviously years ago, and then I’ve always thought about it being a man, I wanted a man, thinking they were stronger…  she was very strong and decisive as well”

“She was very clear – more so than the other guy [Burnham]”

“I think she’s trying to play down her economics background to sort of distance herself from her husband… I think she’s dumbing herself down”

On Liz Kendall

“None of it came from the heart”

“She just sounds like someone’s told her to say something, it’s not coming from the heart, she needs passion”

“Rather than saying what she’s going to do, she’s attacking”

“She reminded me of a headteacher when she was standing there, and she was quite boring. She just didn’t seem to have any sort of personality, and you can’t imagine her being a leader of a party”

“With Liz Kendall and Andy Burnham there’s a lot of rhetoric but there doesn’t seem to be a lot of direction behind what they’re saying. There seems to be a lot of words but no action.”

And, finally, a piece of advice for all four candidates, should they win the leadership election:

“Get down on your hands and knees and start praying”

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.