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Why the Government Should Prioritize Education Over the Economy

Updated on February 27, 2014

It is possible but may not be wholsome to prioritize education over the economy

There is a mix up between the main question and the premise of the question. The main question mentions "prioritize" while the premise mentions "value" If we wish to include value, it should be in another question like "Should the government value education more than the economy?"

There should be a focus and that is mentioned in the main question. I will focus on "prioritize." In this vein, priority is in terms of budget. The government should prioritize the economy. The economy provides the resource to support education. (The main question or the premise did not define economy. In the following discussion economy is defined in two contexts: one, in a balance budget, another, in deficit budgeting.)

Balanced budget

Let us start with a balanced budget of government where expense is covered by the income of the government. In this balanced budget, education is one of the items. Economy is equivalent to income. In this case, education can only equal that of the economy, assuming that there are no other budget items. However, in the government budget, there are other budget items. In the Philippines, for example, there are branches of government like the judiciary, legislative, and executive. Each branch is given a budget. The executive branch has departments like Finance, Trade and Industry, Defense, Interior and Local Government, Environment and Natural Resources, Science and Technology, Transportation and Information, and Education. Assuming that in the executive branch, education is given the top priority. Still education will compete with the judiciary and legislative branches in terms of priority in the budget. It is possible to give top priority for education over that of the legislative and judiciary. But the uppermost limit of education is the income or economy; education can never go over the top of economy.

Deficit budgeting

There is another possible case where income is not equated with the economy. That is a method of government budgeting called deficit budgeting.

In deficit budgeting, the expenses of the government for the current year are not covered by the income of the government. Suppose the expense is two billion pesos (Philippine currency) or two billion dollars and the government income is only one billion dollars. This is the practice, even in the United States. However, there was one year during the term of President Jimmy Carter that the government budget was balanced. Most of the administrations of the United States went for deficit budgeting. In fact, the promise of a candidate for the U.S. presidency is budget deficit reduction. That was the promise of President Bill Clinton in his first campaign for the presidency. When he became president he fought hard for budget deficit reduction and won in Congress by just 4 votes among the congressmen (Woodward, B. The Agenda. 1995).

What does budget deficit mean? The government spends more than it earns for the budget year. For example, it earns one billion dollars but spends two billion dollars. How could that be? The government borrows the one billion dollars from merchant banks or from the public. The issuance of Treasury bills is a means of borrowing from the public. The consequences of deficit budgeting, especially if the loan is spent on non-productive purposes like war is another story.

In the context of deficit budgeting, economy can assume a different definition or it is a function of various factors like investments, balance of trade with other countries, and interest rates.

Education can be viewed as an investment, That is, if we put aside value. Someone can always argue that education is not an investment in the sense that it will be measured in terms of return on investment of a business outfit. In deficit budgeting. education is a budget item.

Now economy is no longer considered as a budget item but as a function of, say, different factors, and various government departments like Finance (that includes Customs Bureau and the Bureau of Internal Revenue), Trade and Industry, Agriculture and Forestry, Tourism that are the primary income-earning entities of the government.

Education, administered by the Department of Education, may be given priority over any or all of the income-earning departments. The implication of this prioritization is another story.


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  • conradofontanilla profile imageAUTHOR


    6 years ago from Philippines

    Power comes in in the tug of war between balanced budget and deficit budgeting that has won most of the time. Coming close is the the tug of war between stability and growth that many will argue is insured by deficit budgeting.

    Quality of education can be separated from budgeting for education although one affects the other. High quality of education can be achieved if there is a budget support for it, some people will argue.

    Deficit budgeting favors business and if the government is controlled largely by business the proponent of balanced budget goes for an uphill battle.

    Unfortunately, the government in most capitalist countries can only meddle with the government budget. There is another large section of the economy that is beyond its reach, that is monetary policy. This is the turf of the Federal Reserve Bank, in the United States, and Central Bank, in the case of the Philippines. The Fed controls interest rate, for example. If the interest rate raises runaway inflation, the poor will suffer because their savings can be evaporated as well. Neither Congress nor the President has direct control over the interest rate.

  • Wayne Brown profile image

    Wayne Brown 

    6 years ago from Texas

    The fallacy of government today is that it is directly responsible for either economy or education. If one lives in a free market economy, then the private sector becomes the driving force behind the economy and the government attempts to not complicate the process but still to apply some common sense regulations in order to keep the playing field reasonably level for all components within the private sector. As the sector flourishes and grows unabated, then the revenue stream of income potentially increases to the government allowing more flexibility in some areas of the operating budget (s). In terms of education, government can only act to "standardize" the approach which tends to lead to only one plateau....mediocrity. The federal process almost always leads to standardization over functionality with keen reminders by the politicians than their "intent" is what really counts regardless of the achieved outcome. Education, if successful, must be moved, in terms of control, back to the lowest elements of local government and taken out of the federal picture where it only acts as one more element of "power" over the masses. First and foremost, a central government, or any government for that matter, must begin with a balanced approached to budgeting. Only in balance can we ratio need against capability to supply. The defined need then does not become the rationale nor the priority for justifying deficit receipts in the annual budget process. The government budget, just like family household budget, must define its means and live within them if long term stability is to be achieved. ~WB


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