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Big government and the welfare state

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Al Jassas View Drop Down
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    Posted: 27 Mar 2012 at 20:34
Hello to you all
 
For 6000 years government's role was quite limited. Other than keeping the peace and officiating on religion governments could care less what happens. As late as the early 20th century some very advanced and "civilised" countries allowed duelling to settle differences rather than go to court. As countries became more demoratic societal forces began to demand more government in their lives. Across the world governments expanded in a way that was just unimaginable only a generation before. Case in point the US which had more government agencies than the UK or most of europe by 1913 (the progressive era).
 
The expansion of the power of government lead to developements in both society and economy that could never happen in a country with less government. In the US for example mass urbanisation only started in the 30s and it was only then did the urban population exceed that of the rural areas. Better education, an ever expanding more stable economy, less social upheaval and advancements in rights.
 
WWII ushered in the so called "welfare state" which takes care of its citizens from cradle to grave. The experiment despite some hickups along the way paved the way to the most peaceful most prosperous 70 years of the history of humanity, at least where the state was applied.
 
Yet in a lot of countries (most notably the US but also in Germany, the Netherlands and elsewhere) an old school of thought is reemerging from the shaddows and gaining massive support among segments of the population especially the most hurt by their dogma. This libertarian/neo-liberal group of theorists and activist blame the government for the current crisis instead of lack of it. In their theories it was government interference in the free market that caused the crisis and that any and all government stabilisation efforts are wrong even if they lead to total collapse and some of them even acknowledge that their theories would end up with a sharply divided society where the majority of people suffer. And it doesn't stop there.
 
So, how big a government should be?
 
Should we do away with the welfare state?
 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Parnell Quote  Post ReplyReply Direct Link To This Post Posted: 27 Mar 2012 at 21:21
There is a middle ground.

Countries like Spain and Italy have destroyed their own economies by creating a two tier labour system that actively benefits the middle aged at the expense of the young. Whilst incompetent backsliders can laze about in their jobs-for-life, safe in a contract that basically prevents them from getting fired, the young have to make do with temporary contracts or 'agency' work. This system is unsustainable and if it weren't for the very close family network in these countries, most young people would be utterly destitute.

On the other hand it is too easy to lay people off in countries like the UK and Ireland.

I don't really see why people get worked up so much about it. Once you take away the rhetoric and the dogma Britain will still be spending 40% of its GDP on public spending, even in the unlikely event that Osborne & Cameron stick to their initial deficit reduction plan. This is objectively speaking a massive part of the economy in the hands of government. I am relaxed about this. I am not a libertarian and don't spend a lot of time worrying about the 'road to serfdom'. But people need to think in proportion.

In Ireland public spending was rising around 10% a year during the boom. This was unsustainable. This was populist welfarism. Yet we still convince ourselves that we were a right wing neoliberal entitity - far from it. We gambled on property and used the proceeds to create a public spending/assets bubble which exploded in our faces once the taps were turned off from European banks.

Back to Beveridge, to Atlee, to the good old boys. Nobody likes to work so we should stop pretending that the idea of it is an incentive in itself. Welfare should never pay more than work. It should always be a safety net to prevent you falling into complete destitution. Public services such as universal education and healthcare should be prioratised and cherished. Most young people will eventually learn of the many glass ceilings that await them but they should at least be given as equal a beginning as possible. The wealthy should pay more in taxes but not to the point where we simply drive them off elsewhere or damage the profit motive. We already have a welfare state that spends beyond its means in supposedly 'neo-liberal/libertarian' countries. The real problem is that people seem to be incapable of thinking in proportion.


Edited by Parnell - 27 Mar 2012 at 21:23
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Buckskins Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 00:47
Every country that can, should take care of those that can't take care of themselves. I find an incredible feeling of entitlement from many Europeans. It's as if their government has promised the world, and reneged on the deal. Socialism is poison. If we have learned anything at all it's that if you wan't a country to go to pieces, get the government more involved.

   A government should be responsible for national defense, to include finance as a weapon, and conduct foreign policy, and little else. We in the United States need out of NATO and the UN yesterday. A total withdrawal from Europe of our armed forces is in order. 

A welfare state is little more than a gravy train for the lazy, and civil servants. When initiative and motivation are removed from individuals, the rot sets in. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Buckskins Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 00:57
"The wealthy should pay more in taxes"

Why should financially successful people be penalized for what's theirs?  If the incentive to achieve and get ahead is removed, then why bust your butt? I have heard of situations (which I can't verify as truth) of working class people in the UK refusing overtime, as most of it is taken by the Government in taxes. Get the government out your faces as much as possible, and act responsible.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Paradigm of Humanity Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 02:04
Originally posted by Buckskins Buckskins wrote:

"The wealthy should pay more in taxes"

Why should financially successful people be penalized for what's theirs?  If the incentive to achieve and get ahead is removed, then why bust your butt? I have heard of situations (which I can't verify as truth) of working class people in the UK refusing overtime, as most of it is taken by the Government in taxes. Get the government out your faces as much as possible, and act responsible.

The poor and the wealthy must pay same base taxes but the poor can take a discount on their taxes.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Captain Vancouver Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 02:25
In a functioning democracy, the government means "us". Those that make the claim that fundamental aspects of civilized society can be better maintained by certain captains of industry, than we can ourselves, are almost always actually making a pitch for self-serving gain, which may or may not be in societies best interests.
 
Bureaucracy can go overboard at times, and accountability lost for the sake of idealism, or short sighted policy. But the excesses of an unrestrained market can be monumental, as we have seen in countless exampes through history, the '08 crash being just the latest installment.
 
It is the great myth today that the market is forever efficient, and if left alone will provide for the best economic arrangements. Try telling that to the poor American worker, earning minimum wage and living in his car, hoping not to get sick because he can't aford to pay medical premiums. Or the Russian pensioner, who has seen her benefits plummet as criminals (entrepreneurs some might say) looted the economy after the collapse of communism. The list goes on.
 
The reason why many social programs in places like the US or Britain or Canada now seem so hard to fund is not hard to fathom. There has been a massive shift of resources from the public to the private sector. Tax rates for individuals and corporations have dropped substaintially. We were paying a top rate of 90% here in the '50s; now the rate is 29%. These funds have flooded stock, bond, and real estate markets, creating bubbles here and there through speculation, and more importantly, yielding power to unelected punters and bit players in the financial sector. Not surprisingly, those only responsible to themselves tend to do things that benefit themselves, and the good of the community may not, and most often is not, listed high on the agenda.
 
One of our biggest problems today is that spin has become an art form, and the interests of the few can be put forth in a most powerful way. Factor in the many today who are averse to reading, and have patience only for a ten second sound bite, and the problems multiply.
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Post Options Post Options   Thanks (1) Thanks(1)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 11:46
Originally posted by al Jassas al Jassas wrote:

For 6000 years government's role was quite limited. Other than keeping the peace and officiating on religion governments could care less what happens.
That tends to get the whole argument off on the wrong foot. For much, and probably most, of those millenia, government played a much greater role in everyday life than it does today.
That applied in Amerindian society, Mesopotamia, China, India, Rome and pretty well everywhere. In Europe, Feudalism is about as government-interfering system as anything can be, and in early modern time guild structures regulated life as feudalism fell. The medieval church too, an essential if not primary part of government, took care of much of what nowadays would be called welfare spending.
 
Free, laisser-faire, economic structures are a basically a 19th century invention that hit their peak in Britain and other parts of NW Europe and America (at least domestically). By the end of the century however the increase in human misery due to exploitation of the mass of people, and the failure to provide adequate support, either in wages or otherwise, began to destroy belief in free markets as panaceas, and countries starting most notably with Germany, began implementing welfare measures and restoring earlier modern systems like the Elizabethan Poor Law, that had become ineffective.
 
Then in the first half of the 20th century two world wars coupled with ominous Communist revolutions produced an opportunity for countries to be forced to return to earlier concepts of fair government, leading eventually after temporary successes for totalitarianism to the economic progress and social improvements of at least the 'western' countries (not forgetting Japan).
 
The USA more or less alone among the major countries missed out on this development, largely because immigration provided enogh cannon-fodder to keep the price of labour down, because of the dominant role that money has always played in US government, and also because of the willingness to use force and incarceration to suppress dissent.
 
But to argue that countries 'cannot afford' welfare provision is to miss the entire point that it is the business of government to ensure the welfare of the citizenry: that is its whole raison d'être.
 
How best it can achieve that end, whether for instance the middle-aged benefit too greatly compared to the young, or whether the British NHS is a worse or better system than French-style universal insurance, and so on, are of course legitimate subjects for democratic discussion, just as the efficiency of systems are legitimate subjects for expert analysis. As long as efficiency is not measured in  money terms.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote fantasus Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 14:15
My personal experience does not go much beyond were i live - and then Norway. There can perhaps be much justified criticism of those societies, but I think it will probably much worse if they "imitate" very much. In other words - we may have much to learn - the question is if it is about what not to do - in a few cases what to do better. I hope this is not seen only as an example of some "national chauvinism", since that is not the issue for me.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Al Jassas Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 14:44
Originally posted by Buckskins Buckskins wrote:

"The wealthy should pay more in taxes"

Why should financially successful people be penalized for what's theirs?  If the incentive to achieve and get ahead is removed, then why bust your butt? I have heard of situations (which I can't verify as truth) of working class people in the UK refusing overtime, as most of it is taken by the Government in taxes. Get the government out your faces as much as possible, and act responsible.
 
And why call taxes on these wealthy people "penalisation"?
 
Those people succeeded in the first place due to ma government's generous contracts, policies and support. Indeed the most wealthy people in the country benifit the most from government programs. It is primarily because of this that they should pay more taxes than poorer people.
 
Another reason that is more structural in nature is basically wealth re-distribution. Wealth naturally goes one way, from the bottom up. Without a sane progressive taxation policy equilibrium will not be maintained. The more the wealth reaching up the less wealth concentrated down the less tax revinue the government gets (as % of GDP and in some cases in real terms) and you will end in a gigantic crash or serial crashes. This happens often times in Latin American countries especially because of their regressive taxation policies. 
 
As for overtime taxation, the main reason behind it is to creat more jobs for the unemployed. Its actually a good policy especially in times of crisis.
 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Paradigm of Humanity Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 14:49
Communism of the rich LOL

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Post Options Post Options   Thanks (0) Thanks(0)   Quote Buckskins Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 16:18
Originally posted by fantasus fantasus wrote:

My personal experience does not go much beyond were i live - and then Norway. There can perhaps be much justified criticism of those societies, but I think it will probably much worse if they "imitate" very much. In other words - we may have much to learn - the question is if it is about what not to do - in a few cases what to do better. I hope this is not seen only as an example of some "national chauvinism", since that is not the issue for me.

Norway is a whole different situation. Your country is well managed, and your resources have been dealt with responsibly. It's too pink for my taste, but you can't argue with success.

Off topic I would say, lay off the Whale hunting. It's one of the few things that detracts from Norway's international image.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote fantasus Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 16:29
Originally posted by Buckskins Buckskins wrote:

Originally posted by fantasus fantasus wrote:

My personal experience does not go much beyond were i live - and then Norway. There can perhaps be much justified criticism of those societies, but I think it will probably much worse if they "imitate" very much. In other words - we may have much to learn - the question is if it is about what not to do - in a few cases what to do better. I hope this is not seen only as an example of some "national chauvinism", since that is not the issue for me.

Norway is a whole different situation. Your country is well managed, and your resources have been dealt with responsibly. It's too pink for my taste, but you can't argue with success.

Off topic I would say, lay off the Whale hunting. It's one of the few things that detracts from Norway's international image.
I am from Denmark, but with Norway as, what one could call the "other land" of part of my family.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Buckskins Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 16:41
Quote  
And why call taxes on these wealthy people "penalisation"?
 
I don't, I'm saying wealthy people should not be taxed more in proportion to those earning or having less.
Quote
Those people succeeded in the first place due to ma government's generous contracts, policies and support. Indeed the most wealthy people in the country benifit the most from government programs. It is primarily because of this that they should pay more taxes than poorer people.
You can't paint an entire country with one brush due to a handful of shylocks.
Quote
Another reason that is more structural in nature is basically wealth re-distribution. Wealth naturally goes one way, from the bottom up. Without a sane progressive taxation policy equilibrium will not be maintained. The more the wealth reaching up the less wealth concentrated down the less tax revinue the government gets (as % of GDP and in some cases in real terms) and you will end in a gigantic crash or serial crashes. This happens often times in Latin American countries especially because of their regressive taxation policies. 
 
Wealth re-distribution, are you kidding me? When you take from the wealthy they are out of Dodge in a heartbeat, or at least their money is. They inherited it, or earned it. What right does the less fortunate or lazy have in claiming what's not theirs. Does each according to their ability, and each according to their needs, or words to that effect ring a bell? How did that system work out again?
Quote
As for overtime taxation, the main reason behind it is to creat more jobs for the unemployed. Its actually a good policy especially in times of crisis.
 
Al-Jassas

No it isn't, it's in place all the time. If it was done in dire times I could begin to give that theory some credence.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Buckskins Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 16:47
Originally posted by fantasus fantasus wrote:

Originally posted by Buckskins Buckskins wrote:

Originally posted by fantasus fantasus wrote:

My personal experience does not go much beyond were i live - and then Norway. There can perhaps be much justified criticism of those societies, but I think it will probably much worse if they "imitate" very much. In other words - we may have much to learn - the question is if it is about what not to do - in a few cases what to do better. I hope this is not seen only as an example of some "national chauvinism", since that is not the issue for me.

Norway is a whole different situation. Your country is well managed, and your resources have been dealt with responsibly. It's too pink for my taste, but you can't argue with success.

Off topic I would say, lay off the Whale hunting. It's one of the few things that detracts from Norway's international image.
I am from Denmark, but with Norway as, what one could call the "other land" of part of my family.

I don't know why I presumed you were Norwegian. Sorry about that, Mea Culpa. I'm at work and doing this between calls. It tends to get me distracted. Cheers
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Al Jassas Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 17:49
Originally posted by Buckskins Buckskins wrote:

Quote  
And why call taxes on these wealthy people "penalisation"?
 
I don't, I'm saying wealthy people should not be taxed more in proportion to those earning or having less.
 
If they have more access to government services why not?
 
Originally posted by Buckskins Buckskins wrote:

Quote
Those people succeeded in the first place due to ma government's generous contracts, policies and support. Indeed the most wealthy people in the country benifit the most from government programs. It is primarily because of this that they should pay more taxes than poorer people.
You can't paint an entire country with one brush due to a handful of shylocks.
 
Who are the Shylocks in this? Those rich people would never found the roads that carry their trade, the security that protects their trade and the support that buys their trade if it wasn't for the government. Expecting them to pay more than normal folks is just aout right.
 
Originally posted by Buckskins Buckskins wrote:

Quote
Another reason that is more structural in nature is basically wealth re-distribution. Wealth naturally goes one way, from the bottom up. Without a sane progressive taxation policy equilibrium will not be maintained. The more the wealth reaching up the less wealth concentrated down the less tax revinue the government gets (as % of GDP and in some cases in real terms) and you will end in a gigantic crash or serial crashes. This happens often times in Latin American countries especially because of their regressive taxation policies. 
 
Wealth re-distribution, are you kidding me? When you take from the wealthy they are out of Dodge in a heartbeat, or at least their money is. They inherited it, or earned it. What right does the less fortunate or lazy have in claiming what's not theirs. Does each according to their ability, and each according to their needs, or words to that effect ring a bell? How did that system work out again?
 
You obviously mix taxing wealth (ie assessts, savings etc.) with taxing income. Only die hard socialists and communists want to tax wealth and I agree with you here that people will flee if their accumulted wealth that they already paid tax on when they got the income behind it is taxed.
 
On the other hand earned income is also part of wealth and personal wealth is generated from it and it is this type of wealth that I (and most people) want to tax.
 
Another thing you mix here is wealth re-distribution. Wealth redistribution doesn't mean the government robbing Bill to pay off Bob. Its comes in many forms like reducing the tax burden on the lower income people, more infrastructure to help people in poor communities that suffered due to end of industrialisation or natural disaster and so on. The wealthy will eventually benifit from this too (since government spending means more contracts that go to companies owned and managed by wealthy people). All this maintains the equilibrium of cash flow which is the ultimate goal of the government.
 
 
Originally posted by Buckskins Buckskins wrote:

Quote
As for overtime taxation, the main reason behind it is to creat more jobs for the unemployed. Its actually a good policy especially in times of crisis.
 
Al-Jassas

No it isn't, it's in place all the time. If it was done in dire times I could begin to give that theory some credence.
 
Britain has 8% unemployment and Germany if I am not mistaken had over 10%. Britain taxed overtime while Germany reduced the number of total hours worked and paid companies to keep people on the pay roll. Now Germany has a vibrant and growing economy with around 5% unemployment while Britain is still struggling.
 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Buckskins Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 19:00
Any Income should be taxed in proportion to the rest of society. The wealthy will still be paying more in taxes. You can't compare present day Brit workers with their German counterparts. Germans know how to work for what they get, and they produce quality. The UK sold most of their gold, and did the same with their industries. With a few exceptions of course. Scottish oil has been running out for about ten years. All that Scottish money went where? Now they figure they can help themselves to the Malvinas oil and make it up.  That ain't gonna happen. Any cars built in the UK are foreign owned. It's no wonder the Scots have had enough, though they also will have a long row to hoe. The working guy needs incentive. Not taxed  on everything he touches or buys. A welfare state is the road to ruin, as the Brits are finding out. They have armies of civil servants with fat salaries and even better pensions.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote gcle2003 Quote  Post ReplyReply Direct Link To This Post Posted: 28 Mar 2012 at 20:56
Just a quick factual note since it's late here: the US has also sold most of its gold (63%) since 1945. Britain sold most of its gold (mostly to the US) to finance WW2.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Buckskins Quote  Post ReplyReply Direct Link To This Post Posted: 29 Mar 2012 at 00:10
Originally posted by gcle2003 gcle2003 wrote:

Just a quick factual note since it's late here: the US has also sold most of its gold (63%) since 1945. Britain sold most of its gold (mostly to the US) to finance WW2.

Give me a break. We even had to feed you. We're not talking about since 1945. Your PM sold out at the bottom of the market, and what gold the UK has left is peanuts. The UK couldn't finance itself, never mind WW2. What little you had was squeezed out of the French, and loot from the Empire.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Cywr Quote  Post ReplyReply Direct Link To This Post Posted: 23 Jun 2012 at 16:29
Quote I have heard of situations (which I can't verify as truth) of working class people in the UK refusing overtime, as most of it is taken by the Government in taxes.


The only way overtime would be an issue, is if the extra earned from overtime would push your income into a higher tax band (from basic to higher). If this is the case, you're probably not working class. Its not taxed any differently, its all just income.

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