Why Eliminating the Department of Education Affects Us All
Good morning, everyone! It’s been a while since I’ve posted videos under the “Morning Coffee with Professor Alex” category. While I’ve been uploading other podcasts, I want to remind you that I organize my content into different categories based on specific topics. Morning Coffee focuses on economic issues that affect us all, but with a twist, and today’s topic is the United States Department of Education.
Listen to this podcast.
The President Trump Executive Order
Today’s topic is the Department of Education. As always, there’s a lot of misinformation out there, though I prefer to call it ignorance because that’s what it really is. Start with eliminating the Department of Education via an Executive Order. To put it simply, it’s unconstitutional to do so. Even the Heritage Foundation has stated that.
Yet, executive orders seem to be used for everything these days, which is just ridiculous. Almost as ridiculous as President Trump posting on Truth Social a day or two ago that anyone who vandalizes a Tesla vehicle will be considered a domestic terrorist. Good luck with that one! It’s a local/state issue.
For the record, as I’m preparing this post, I now see that Attorney General Pam Biondi has charged three individuals for vandalizing one of Elon Musk’s Tesla dealerships. My prediction is that, assuming the case gets as far as the arraignment, it will be dismissed shortly thereafter.
Anyway, back to the Department of Education. One point I want to highlight is the opposition to Biden’s student loan forgiveness program. Critics argue, “Why should we pay taxes on that? We didn’t have student loans, or we paid ours off, or we didn’t go to college.” I find this argument absurd because there are countless things our tax dollars fund that we don’t personally benefit from.
For example, if there’s a park across the street that I don’t visit, should my taxes be reduced? Or, if I don’t use a particular road or stoplight, why should I pay taxes to maintain that road? What if I don’t drive or ever leave my house? These arguments are absurd because taxes fund public goods and services that benefit society as a whole, even if we don’t use them directly. For example, I don’t have children, but my tax dollars have been helping fund public schools for decades.
The Financial Impact of the Department of Education
Now, let’s tie this to the Department of Education. Linda McMahon is the Secretary of Education. It was rumored from the beginning that McMahon’s job would be to eliminate the Department of Education, which provides over $103 billion in funding and amounts to 11% on average of the total revenue for school districts. This is the part that gets overlooked: it’s all interconnected, like the “seven degrees of Kevin Bacon,” but for economics. If that 11% is cut, it has ripple effects.
Here’s the breakdown: if a school district loses 11% of its funding, it has to make up for it somehow. That could mean cutting 11% of expenses, which isn’t always feasible, or going 11% further into debt. If the federal government reduces its contribution by 11%, the school district has tough choices to make, like firing teachers or staff, which leads to larger class sizes and fewer resources for students. Alternatively, taxes might be raised to cover the shortfall.
Raising taxes is the easy way. They’ll just add a half-percent sales tax somewhere and find other ways to make up the difference. Florida, I’m guessing, is already exploring options.
For instance, Florida is doing something it’s never done before. I’m 53, and I’ve been driving since I was 16—that’s a lot of years—and we’ve never had license plates on the front of our cars. I don’t see the reason for them now, in 2025.
You can’t argue that they’ll help catch criminals—bank robbers wouldn’t use their real tags anyway. Plus, with cameras everywhere and police cars equipped with scanners, front plates feel unnecessary. It seems like just another way to generate revenue. Now, instead of paying for one license plate, you’ll be paying for two.
This ties back to the U.S. Department of Education cutting funding to states. When federal funding decreases, states have to find ways to make up for the shortfall, whether through higher taxes or new revenue streams like this. One way or another, taxes are going up, and people will lose jobs or take early forced retirement.
Add President Trump’s tariffs and rising state taxes to the mix, and the financial strain only worsens. Again, it’s all interconnected, and that’s why the odds of a Trump recession have been estimated to be at 40-50%.
When people advocate for eliminating the Department of Education, they often don’t understand the consequences. For example, I don’t have kids, so why should I pay for public school education? But that’s the same flawed logic behind opposing student loan forgiveness.
Take Illinois, where Governor JB Pritzker’s Smart-Buy program wipes out up to $40,000 in student loans if you buy a home. It’s a smart move because it generates tax revenue and benefits the local and state economies. Cities and states recoup that money in other ways.
I remember where I had my office; the city did just that with down payment assistance. You had to own your house for 10 years, otherwise, there was a prepayment penalty. And guess what, the city flourished.
But these drastic financial measures highlight why I keep saying that we need to be prepared. It’s not as simple as taking a chainsaw to the budget like Elon Musk might and expecting all problems to magically disappear. It just doesn’t work that way. Not one credible economist would disagree. Only Trump surrogates say that.
Instead, the Trump Administration could have formed committees to figure out where to trim the fat. The issue is that they’re cutting in areas where it makes the least sense—like eliminating employees, who make up such a small percentage of the overall budget. It’s illogical.
If a division with 10 employees is reduced to one, no meaningful work will get done. Look at the Social Security Administration—if those checks arrive late, serious problems will occur. That could be the breaking point, along with delayed IRS checks.
This isn’t just about the Department of Education or people parroting claims about a “bloated budget” on social media. Most don’t even know if it’s bloated. What they fail to grasp is how interconnected everything is. What happens at the federal level impacts private corporations, too, and ultimately affects us personally.
I wrote a blog post about this, which I’ve linked in the video description. It references Bruce Kasman, a top economist from JP Morgan Chase, who estimated a 40% chance of a recession. When you add up all these factors—the cuts, the chaos, the economic strain—it seems unavoidable. People can politicize it all they want, but the reality is clear. Besides, recessions aren’t discriminatory. It hits everyone, not just one political party.
Stagflation is the key concern we’re facing, and if it takes hold, the consequences could be severe. You have to examine this issue from every angle, which is why I wrote a blog post the other day emphasizing that this will affect everyone. The question is how, and once you figure that out, you can take steps to protect yourself.
It’s not easy—I’m the first to admit that. Being in education, I’ll see how this plays out. Since I’m at a private university, I might be fine, but the broader implications are concerning. At least my expenses are likely to increase.
Besides nickel and diming us to death with small steps like Florida is taking to generate revenue, the endless financial chaos affects us. For example, having countries like Canada discouraging their citizens from visiting the U.S. Canadians, who often spend springtime golfing in places like Miami or Naples. Can you blame Canada, especially with incidents like the Canadian actress who was unjustly detained for two weeks?
Such events erode trust and hurt tourism revenue. Why would anyone visit a country only to be terrified the entire time they are there?
The idea that these measures and the Trump tariffs benefit the economy doesn’t hold up. No credible economic policy experts seem to support that notion. As I keep repeating, chaos breeds political instability, which in turn creates financial instability. It’s all interconnected, and the ripple effects are unavoidable.
So I don’t care what state you’re in. The poorer states are going to feel it the most with the elimination of the US Department of Education, which means that the state has to make up for the difference somehow. If you’re in one of these states, ask yourself how they are going to make up the difference. Are they going to increase taxes or fire personnel? Either one isn’t helpful.
So all I can say is, buckle up. I think it’s going to be rough, but remember, it’s still early in the game. President Trump hasn’t even been in Office three months, and you can see how much has happened in such a short period, but it will take a few months for this to take effect.
Those of you who are my age should remember the 2008 mortgage foreclosure crisis. That didn’t happen overnight, right? It took a while for that momentum, the snowball effect I keep mentioning. It’s getting a little bit bigger till eventually you have an avalanche.
So, analyze what changes you are going to make. I’ve used as an example numerous times that I was lucky that my wife’s car was totaled now instead of later this year, when I might get hit with the tariffs.
It doesn’t matter what state you’re in—poorer states are going to feel the brunt of these cuts from the U.S. Department of Education. When federal funding is wiped out, states have to make up the difference somehow. For poorer states, that often means raising taxes, which only worsens the situation. It’s a vicious cycle. All I can say is, buckle up—it’s going to be rough.
We’re still early in this. Trump hasn’t even been in office for three months, and already so much has happened. But it’ll take a few months for the full effects to set in. Think back to the 2008 mortgage foreclosure crisis—it didn’t happen overnight. It started as a small snowball rolling downhill, growing bigger and bigger until it became an avalanche. That’s what this year could turn into.
So, you have to ask yourself: what changes are you going to make? For example, I’ve considered getting an RV carport. Under the tariffs, the cost would jump from $9,000 to over $12,000 because of steel and aluminum tariffs. Right now, I’m hesitant to take on $12,000 more in expenses.
So what did I do? I bought a nylon topper that attaches to the camper. It cost me $ 80, and that’s how I’m protecting the roof for now. Eighty dollars versus $12,000- it’s that simple when facing an uncertain economy. I need to be financially cautious.
These are the kinds of little steps you have to take. The same logic applies to buying a car—maybe you should go for a used car to avoid some of the financial challenges coming down the road. It’s all about making smart choices in unpredictable times.
So with that, I wish everyone a good morning. Enjoy your cup of coffee, stay safe, and most importantly, be prepared. Take care!
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Disclaimer:
This podcast was transcribed from an audio recording. The transcription may contain inaccuracies or errors due to the limitations of transcription software and the quality of the audio. I have made every effort to ensure the accuracy of the transcription, but we cannot guarantee it.
The views and opinions expressed in this podcast are those of the host(s) and guest(s) and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. Any content provided by our host(s) and/or guest(s) is of their opinion and is not intended to malign any religion, ethnic group, club, organization, company, individual, or anyone or anything
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