Ask Milton Friedman…and a contest

Stan Horowitz writes in about the College’s recent budget pruning:

Here are the facts about the Dartmouth budget crisis as I understand them:

– On June 30, 1999 the endowment was worth $1.7 billion.

– On June 30, 2001 it was worth $2.4 billion.

– Assuming a 5% loss over the next year (which I think the administration has cited), it was $2.3 billion on June 30, 2002.

– So, between 1999 and 2002 the endowment grew by 34%. Over the same period the higher education cost index grew by about 15%. Let�s be clear about this. In 2002 there is markedly more money available than there was in 1999.

– In 1999 nobody was talking about closing libraries or eliminating sports teams.

Great point. It’s strange that no one yet has brought up the concept of income smoothing. Does the College expect decreases in the endowment to continue over the next several years or is it gearing up for some new wantonly-PC spending during the next economic expansion? Assuming neither (a shaky assumption, I’ll grant), the time is ripe for the College to dip into its endowment to cover essential expenditures that might otherwise be at risk. Of course, there are plenty of nonessential items the absence of which might ease the budget’s shortfall and leave the endowment fully intact.

Either policy — spending down a bit of the endowment or cutting nonessential spending — would be far superior to closing libraries. Both should be given far more consideration than they’ve gotten so far. So, in that vein:

Do you have an idea for a budget item that Dartmouth might cut. Email it to us at Dartlog (click here), and we’ll publish the most pragmatic or entertaining (or both) entries and reward the author of the best with fine, high-quality Dartmouth Indian merchandise or a subscription or something.