Bill Gates argues that state budgets are disguising the true costs of healthcare and pensions through accounting tricks, resulting in worsening deficits that negatively impact education funding. He says states like California are borrowing money and deferring school payments, leading to budget shortfalls. Gates asserts that without solving the mis-accounting of long-term costs like healthcare, pension plans will be threatened. He suggests improving accounting standards to prevent cutting education spending in half and address state budget issues.

1. FILE 7 EDUCATION
How state budgets are breaking US schools - Bill Gates
America's school systems are funded by the 50 states. In this fiery talk, Bill Gates
says that state budgets are riddled with accounting tricks that disguise the true cost
of health care and pensions and are weighted with worsening deficits -- with the
financing of education at the losing end.
https://youtu.be/sbWju-Pt4fk
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1.- According to Bill Gates, where does most education funding come out of?
AOut of private corporations
BOut of state budgets
CFrom China
DOut of public conglomerates
2.- What does Bill Gates say is the reason that the U.S. economy is in a 10 percent
deficit?
AThere is no true balancing of state budgets
BWe are spending 26 percent and taking in 36 percent of the U.S. economy
COur economy is flourishing and spending increases
DMore money is going to medical innovation
3.- What kinds of things does Gates mention that the state of California is doing that
leads to a budget deficit?
AThey borrowed $1.5 billion from the private markets
BThey defer school payments
CStates make payments in a timely manner
DBoth A and B

2. 4.- According to Bill Gates, what will happen if we don't solve the mis-accounting of
certain long-term obligations like health care?
AOld people will be left without retirement packages
BPension plans will disappear
CUniversity systems will have a negative impact
DNone of the above
5.- What solution does Gates suggest to prevent education spending to be cut in half
and solve state budget deficits?
AWe need better tools to educate ourselves
BWe need better accounting
CWe need to reward politicians
DAll of the above
6.- Explain how solving the problem of state budgets will contribute to a better world
for your children.
7.- Do you ever spend more money than you take in? What implications does this have
on your life? Or on the nation you live in?
Additional Resources for you to Explore
Bill Gates is an American programmer, inventor, business magnate, and
philanthropist. Gates is the chairman of Microsoft, the world’s largest personal-
computer software company.
Education economics is the study of economic issues relating to education, including
the demand for education and the financing and provision of education.
In his Talk, Bill Gates recommends reading the book "Educational Economics: Where
Do School Funds go?" by Marguerite Roza to help educate us on the current budget
deficit.
Government spending includes all government consumption and investment but
excludes transfer payments made by a state.
Generally Accepted Accounting Principles are used to prepare, present and report
financial statements for a wide variety of entities, including publicly traded and
privately held companies, non-profit organizations, and government authorities.
In this article in the Washington Post, Erskine Bowles, co-chairman of the Simpson-
Bowles commission and author, with Alan Simpson, of a series of deficit-reduction
plans, presents his most recent proposal to reduce the deficit.
The main points of the Simpson-Bowles plan to reduce the deficit are summarized
in a post by Ezra Klein of The Washington Post.