Socialist policies in the future - viable or not

Peter, you may not be able to see voluntary exchange leading to abuse but that requires a culture of voluntary sacrifice. Unfortunately western culture is schizophrenic in how it regards service. On the one hand our faith and society believes in it on a personal level, on the other hand it also enshrines ideas like looking out for #1, there's a sucker born every minute, its only wrong if you get caught and business is only business, and other self centered concepts in our business ideals.

It works when you have a culture of service and self sacrifice among the wealthiest citizen but that has changed a great deal in the past 30+ years. There are far fewer among the fortune 500 who are anything like the Roosevelt scions of yester-year. Now we have more Donald Trumps and Rick Salomons than we have great philanthropists.

When we look at the challenges of today we must look at the culture of our society and what ideology is guiding these people. That very selfishness requires regulation of the market as the very people we expect to make it work are simply too selfish for the rest of the population to trust any longer. Hence the rise of more socialist ideals among the middle class. Every time we get screwed over by the banks , insurance industries or medical companies the more people want something done about their rapacious greed.

Until the day he died in 1981 my Grandfather never paid for health insurance, he could afford to pay for all of his families medical expenses out of pocket. He survived 5 strokes and a heart attack from 1958 until the day he died, my grandmother spent her last 2 years in the hospital and he could afford it on an upper middle class income. Today not even the upper crust could truly afford this out of pocket. This is a single example of what a lack of even moderate regulation has created. There are even more out there I'm certain.

The Free Market and/or Capitalism as a whole requires a difference culture than currently obtains within the highest income brackets of our society. Sure some of the old money families uphold the old traditions and some of the new-age plutocrats of today are socially conscious, but they are the exception, no longer the rule.

The old saying lies, damn lies, and statistics comes to mind. You can cherry pick to make any point and all stats vary depending on the author.
PeterZ, the Australian National Debt to GDP ratio is 11% as opposed to the OECD average of 90%, and the US at 75% has in one estimate $16,737,294,304,715.52 owing. Thus our debt is one of the lowest.
As to deferring welfare payments to future generations, I'm not sure where you got that. Like all developed countries we are facing an aging of the population, but are taking steps to cope - retirement age rising to 69 years, the Future Fund (for fully funding public service pensions), compulsory minimum superannuation contributions for workers rising from current 9% to 12% of their wage (opposed by the conservative pollies?), raising the young skilled migrant intake, and much more. My father and mother in law (89 & 95) living independently in their own homes are saving money on single government pensions. I fail to see the problem with my adult working children having a proportion of their taxes going to pay such pensions, as that has been the way for many years, and they in their turn will be supported by yet future generations. I'm an anomaly having been fortunate enough to accumulate sufficient means allowing me to retire self funded at 58 (6 years ago) and while I'm not working I still pay tax on my investment income. The term for our government is The Commonwealth of Australia, and we hold wealth both privately and in common.
Despite propaganda to the contrary, it is apparent here that each generation is significantly better off than the previous one at the same life stage, and that is expected to continue. The fact that doesn't happen in some other countries makes my point about welfare not necessarily stifling growth.

Hey daryl.

NZ is starting to follow the OZ way of forced saving, but at current, its only 3% of pay from you, 3% from your employer, and 3% from the gov, the gov %age being limited to $520 a year. and those are the mins. you can also opt for 4% or 8%. If you work, you either contribute to the main savings program, kiwisaver, or an officially recognized savings program.

Ours was brought in when Hawke was PM and Keating was Treasurer. Started off in the 80s with workers agreeing to forgo a 3% national pay rise, then rose to 9% over time & stuck there but is starting to rise again on a joint employer/employee funding base. Currently worth $1.5 Trillion.

Spacekiwi wrote:Hey daryl.

NZ is starting to follow the OZ way of forced saving, but at current, its only 3% of pay from you, 3% from your employer, and 3% from the gov, the gov %age being limited to $520 a year. and those are the mins. you can also opt for 4% or 8%. If you work, you either contribute to the main savings program, kiwisaver, or an officially recognized savings program.

I appologize if I misunderstood some of the line items of your federal budget. The Future Fund is a self funded but what does it invest in? Is this like our social security that invests in our own government's debt?

If that is the case, then how is that not borrowing from future generations? If that fund invests in non-governmental assets like stocks and private bonds, then I would agree that it is self funding.

From the articles I linked, those items suggest that Australia is running a 3% deficit. That requires borrowing to fund the expenditures. Borrowing by definition is delaying payment into the future.

Daryl wrote:The old saying lies, damn lies, and statistics comes to mind. You can cherry pick to make any point and all stats vary depending on the author.
PeterZ, the Australian National Debt to GDP ratio is 11% as opposed to the OECD average of 90%, and the US at 75% has in one estimate $16,737,294,304,715.52 owing. Thus our debt is one of the lowest.
As to deferring welfare payments to future generations, I'm not sure where you got that. Like all developed countries we are facing an aging of the population, but are taking steps to cope - retirement age rising to 69 years, the Future Fund (for fully funding public service pensions), compulsory minimum superannuation contributions for workers rising from current 9% to 12% of their wage (opposed by the conservative pollies?), raising the young skilled migrant intake, and much more. My father and mother in law (89 & 95) living independently in their own homes are saving money on single government pensions. I fail to see the problem with my adult working children having a proportion of their taxes going to pay such pensions, as that has been the way for many years, and they in their turn will be supported by yet future generations. I'm an anomaly having been fortunate enough to accumulate sufficient means allowing me to retire self funded at 58 (6 years ago) and while I'm not working I still pay tax on my investment income. The term for our government is The Commonwealth of Australia, and we hold wealth both privately and in common.
Despite propaganda to the contrary, it is apparent here that each generation is significantly better off than the previous one at the same life stage, and that is expected to continue. The fact that doesn't happen in some other countries makes my point about welfare not necessarily stifling growth.

BrightSoul,
In 2011 total tax revenues at Federal, State and Local levels totalled slightly more than $5 trillion. Charitable giving totalled about $300 billion or 6% of of the government's revenues. Combined that's about 1/3 of all economic activity in the US. In other words 1/3 of every dollar that changes hands either goes to government or charity with the government recieving the lions share. The other 2/3 goes to supporting individuals and families.

Arguments have been made that since government has increased its role of ensuring welfare of the poor, charitable organizations are seen as redundant. In the 19th century the Rooseveldt's and Vanderbilts carried nowhere near the tax burden Trump and his ilk carry today. Those facts made both the need to give to charity and the ability to give greater for those scions you mentioned.

Your grandfather is an excellent case supporting free markets. Why was it that he could afford to pay for his own medical treatment? There was no real medical insurance at the time. Doctors charged their patients directly at rates both he and the patient agreed to. Flash forward to today. Doctors are strong armed by insurance companies into accepting reimbursement rates for the entire pool of insured the companies service. Hardly voluntary in the classic sense. This is very much "an offer you can't refuse". Legislation make it worse by making alternative models very difficult enplace.

Other than a simple fee for service, doctors can't set up any other way to charge their patient without becoming an insurance company and adopting the entire set of legal requirements of those companies. Even if they tried, too many people are already locked up by existing comapnies to make such an attempt attractive.

Insurance companies collect up front for an estimated amoubnt of service they expect to provide. Their profits happen when fewer services are delivered than paid for. The same dynamic applies to whoever manages the structure, whether private or public. Even the British system has a board in place designed to deny service. I believe their acronym is NICE.

These systems are the antithesis of a free market.

Btw, I don't speak of taxes. They are compulsory and essential to maintaining foundations of society. I am speaking of all the other transactions individuals make. Why would it be better to force individuals to engage in activity at artificial prices?

Upon further reading of your Future Fund, I have to tip my hat to you socialists downunder. Those pension solutions are downright capitalistic.

Seriously, those investment solutions get folks to voluntarily fund significant public obligations above and beyond taxes. That allows you guys to use taxes for social welfare programs. So long as you continue to limit your exposure to government debt in those funds, I think it does look like a very sustainable solution.

Now if our US socialists would follow suit with social security....

Daryl wrote:Ours was brought in when Hawke was PM and Keating was Treasurer. Started off in the 80s with workers agreeing to forgo a 3% national pay rise, then rose to 9% over time & stuck there but is starting to rise again on a joint employer/employee funding base. Currently worth $1.5 Trillion.

Spacekiwi wrote:Hey daryl.

NZ is starting to follow the OZ way of forced saving, but at current, its only 3% of pay from you, 3% from your employer, and 3% from the gov, the gov %age being limited to $520 a year. and those are the mins. you can also opt for 4% or 8%. If you work, you either contribute to the main savings program, kiwisaver, or an officially recognized savings program.

Thanks PeterZ, enjoy an intelligent debate. The Future Fund invests in infrastructure and the free market to ensure that the public service retirement pensions don't come out of the government's revenue. The other one I mentioned is for all workers and the $1.5 trillion is invested wherever independent superannuation companies think they will make a buck. Both ensure that many (like me) don't need to access a government aged pension, which makes our welfare system more sustainable. As mentioned before I have a variety of investments plus am a member of both the above. My private superannuation organization owns among much else - Thames Water (London's municipal water supply), and big shopping centres around the world.
We probably both agree that the Haven Dolist mentality of taxing the workers and middle class to pay for multigenerational welfare for much of the population is unsustainable. I'm trying to show that there are actually sensible and sustainable ways to make a welfare system viable. Without researching I note that Norway also is said to have a Future Fund.
In my case I'm still a contributor to society by paying tax, volunteering my time for non profit organisations, being on various community committees, and providing family support.

I am all for helping those that need it. I am also a proponent of voluntary participation. If a welfare system becomes too generous volunteers would tend to stop participating. That would limit the propensity for multigenerational welfare mindset to truly set in. Also, relying on a government beaurocracy to help people who need help isn't the most effective way to help people. Charitable organization rend to be more effective.

I would agree that a sufficiently limited welfare system can be sustainable regardless of funding methods. The true trick would be to define limits and ensure those limits don't expand. Voluntary participation is one way.

Daryl wrote:Thanks PeterZ, enjoy an intelligent debate. The Future Fun and invests in infrastructure and the free market to ensure that the public service retirement pensions don't come out of the government's revenue. The other one I mentioned is for all workers and the $1.5 trillion is invested wherever independent superannuation companies think they will make a buck. Both ensure that many (like me) don't need to access a government aged pension, which makes our welfare system more sustainable. As mentioned before I have a variety of investments plus am a member of both the above. My private superannuation organization owns among much else - Thames Water (London's municipal water supply), and big shopping centres around the world.
We probably both agree that the Haven Dolist mentality of taxing the workers and middle class to pay for multigenerational welfare for much of the population is unsustainable. I'm trying to show that there are actually sensible and sustainable ways to make a welfare system viable. Without researching I note that Norway also is said to have a Future Fund.
In my case I'm still a contributor to society by paying tax, volunteering my time for non profit organisations, being on various community committees, and providing family support.

PeterZ wrote:I am all for helping those that need it. I am also a proponent of voluntary participation. If a welfare system becomes too generous volunteers would tend to stop participating. That would limit the propensity for multigenerational welfare mindset to truly set in. Also, relying on a government beaurocracy to help people who need help isn't the most effective way to help people. Charitable organization rend to be more effective.

Well, there's always question what is "too generous". IE if welfare is almost equal to common low-end job's wages (not because it's large but 'cos these wages are crap too and are at/below survival level) - solution which look like "cut the welfare" will bring less than satisfactory results.
BTW there's other end of welfare - in closed system with too few jobs it'll (ideally) raise wages of working ones - not that this will work in current global society though.