Financing Democracy: The Crisis in
Social Security, Education, and Health Finance

This course studies each of the three great social programs currently in crisis--Social Security, education, and health--with a view to understanding how the program currently works, what are the major strains in the program, and what are the major options for reform. A broad theme linking all three crises and running throughout the course is the question of balance between the three alternative systems of production and consumption in the modern world: the state system, the market system, and the family (or traditional) system.

To avoid getting lost in the myriad details of each program, we will be focusing particular attention on the financial details, in accordance with the view that the structure of finance not only gives insight into the operation of a program, but also helps to explain the evolution of the program over time. The course is built around the premise that finance is not a mere technical detail to be left to the experts, but rather is the foundation upon which the programs are built, a foundation that determines what can and what cannot be built, as well as what can and what cannot be altered in the existing superstructure.

The course will be taught in seminar format. Intensive class participation and careful study of the assigned readings are absolutely essential to the success of the course. Grades will be based on class participation (20%), an oral presentation (30%), and a final paper (50%). Because the course is so topical, there are many high quality professional conferences discussing the issues, and students will be encouraged to attend one and to use their presentations to report on the proceedings.

Readings. Each student should purchase the following two texts, available at the Columbia Bookstore: Eric R. Kingson and James H. Schulz (KS), Social Security in the 21st Century, 1997, and Stuart H. Altman and Uwe E. Reinhardt (AR) Strategic Choices for a Changing Health Care System, 1996. There is no satisfactory comprehensive text on education finance, and we will be relying instead on a packet of articles that will be made available for purchase. These texts provide only a brief overview of the issues, and students will be expected to master as well some subset of the enormous literature that exists on each of the three programs. I will be handing out reference and resource lists on each program at the appropriate time as the course progresses.

Class Meetings.

1. Jan 20. Introduction.

2. Jan 27. Social Security: How Does it Work?
*KS Ch. 1,2
www.ssa.gov, wwa.socsec.org, www.socialsecurity.org
Mehrling "The Social Mutual Fund"

3. Feb 3. Social Security: What is the Problem?
*KS Ch. 9-10
KS Ch. 3-8, 11-16

4. Feb 10. Social Security: Is Privatization the Answer?
*KS Ch. 17-18
Feldstein and Samwick "Economics of Prefunding Social Security"

5. Feb 17. Education Finance: How Does it Work?
*Sheila Slaughter, Academic Capitalism, Ch. 2, 7.

6. Feb 24. Education Finance: What is the Problem?
*Robert Zemsky et al "In Search of Strategic Perspective: A Tool for Mapping
the Market in Postsecondary Education" Change (November/December 1997)
*Robert Zemsky et al "The User-Friendly Terrain; Defining the Market Taxonomy
for Two-Year Institutions" Change (January/February 1998)
www.apollogrp.com, www.wophx.edu, www.dialnsa.edu,
Chronical of Higher Education on Clinton education budget

7. Mar 3. Education Finance: The Future of Community Colleges
*Bob Davis and David Wessel, "A People's College". Chapter 4 in Prosperity:
The Coming Twenty-Year Boom and What it Means to You
*Barbara Schneider, "The Ambition Paradox". Chapter 9
*David Lavin, "Policy Change and Access to Two- and Four-Year Colleges: The Case of the City University of New York"

Paper Proposals Due

8. Mar 10. Health Finance: How Does it Work?
*AR Ch. 1-4

Spring Break

9. Mar 24. Health Finance: What is the Problem?
*AR Ch. 5, 6, 7, 9
*Chronic Care in America: a 21st Century Challenge, Robert Wood Johnson Foundation. www.rwjf.org/library/chrcare/

10. Mar 31. Health Finance: The Future of Medicare
*Robert D. Reischauer et al. Medicare; Preparing for the Challenges of the 21st Century Brookings 1998.
thomas.loc.gov/medicare

11. Apr 7. Social Security: Student Papers

12. Apr 14. Education Finance: Student Papers

13. Apr 20. Health Finance: Student Papers
[Note, this week class will be held on Tuesday instead of Wednesday]

14. Apr 28 Conclusion.