Thursday, September 25, 2008

Is our Children Learning?

I have my first test in Ancient Greek today. Lucky me. Actually I am, as I was blessed with and excellent primary school education at St. Michael’s, which included classes in Latin in both 7th and 8th Grade. If I do well, it will be in large part thanks to the teachers there.

There are 570 million children enrolled in primary school around the world. 73 million children are not. One of the Millennium development goals is to change that number to zero. But what are the costs?

The World Bank did a calculation of the costs of achieving the goals, and it’s interesting reading. Their estimate is an ongoing additional cost of between $10 and $30 billion a year will enable every single child on the planet to go to school. Oddly enough, that’s the same number I mentioned in the last post of what one would get, in perpetuity, by investing the fabled $700 billion at 4% - $28 billion.

An oddly similar number can be arrived at by looking at the under reported bailout of the auto industries that was just announced an hour ago. $25 billion to the auto industry in loans. Which is, of course, ridiculous on so many levels.

It’s the buyout thing again. If my taxpayer dollars are going to do this, then let’s just buy the damn companies. Some more costs:

GM: $5.81 Billion
Ford: 11.27 Billion
Chrysler: This is a bit more tricky as they are no longer publicly traded. Cerberus (a private company) purchased 80% of the company in May, 2007 for $7.4 Billion, valuing it at $9.25 Billion. Since then shares in both GM and Ford have dropped by 65% and 40% respectively, so let’s value Chrysler at a 50% markdown – or $4.65 Billion.

This totals $21.75 Billion. So it’s actually cheaper to buy the big three outright, then loan them money. The World Bank estimates the annual cost of sending a child to school at $62. So with the leftover $3.75 Billion you could still send 7.5 million children to school for eight years.