The merchandising is licensed off for the most part, and the receipts from that licensing go back to the bottom line of PBS. If "Big Bird were capable of paying his own way" there wouldn't be semi-annual fundraising drives for your local PBS station.

But by all means, let's not allow facts to take away from a Libertarian wet dream.

I'd love to see links to the studies you're referring to, because everything that I have ever seen indicates that frequent viewers of SS scored higher on achievement measurements, cognitive skills, and had somewhat higher social skills. This is not to say that there aren't things that SS is unable to do or could do better, but to dismiss it as ineffective is laughable.