[mikema63]

So the thought I had was that in a democratic country welfare would become popular and get passed as policy in times where a large section of the country is in poverty. That much is obvious.

As the economy improves and more people move out of poverty and into the middle class they stop benefiting from a lot of those programs and start paying more in taxes so welfare loses support and cutting taxes gains support. Welfare takes a hit and taxes get cut. People start falling back into poverty and the rich having runaway increases in wealth the economy goes into a depression and support for welfare increases.

Programs like social security and medicare, which give benefits to the middle class as well as the poor see huge support and have been relatively resilient to attacks. Programs like public housing, food stamps, and other programs that benefit the poor only Have been chipped away quite readily.

There ought to be plenty of good ways of looking at data and making predictions to support the idea.

It would also suggest some strategies to make more broadly popular and resilient welfare systems.

What do you guys think?

[Suntzu]

I believe we should not give any benefits to able bodies persons who refuse to work. If no job is available put them to work picking up trash.

Give single mothers a fixed amount, same amount for 1 or 10 children, just like someone working for a living.

[Decky]

I believe we should not give any benefits to able bodies persons who refuse to work. If no job is available put them to work picking up trash.

Meanwhile in the real world where there are far more able bodied working age adults than there are jobs and the capitalists import more and more working age adults from abroad every year; we know that the only people who refuse to work are landlords, capitalists and aristocrats.

[Suntzu]

Something on the order of 12 - 20 million Mexicans were able to find work.

Am I missing something?

[Decky]

Exactly, that's 12-20 millions jobs stolen from Americans. No wonder there is unemployment.

[Godstud]

It's only stolen from lazy Americans who didn't want to get paid $4/hour to pick fruit.

[mikema63]

So, uh, anyone interested in the actual idea or what?

[SolarCross]

Government welfare is an unnecessary burden on government budgets because prices adjust anyway. The net benefit of welfare for anyone is sub-zero. There was a benefit for government in keeping the general populace closely dependant on government to support government's ability mass militarise the population in the event of a large scale war, as seen in WW1 and WW2. However even that benefit no longer applies because wars are no longer fought and won by swarms of cannon fodder but instead by smallish cabals of highly skilled professionals wielding super weapons: stealth bombers, cruise missiles, modern armour etc.

There is no benefit in welfare because prices adjust. If you give "free" healthcare to a low skilled worker through the government and pay for it by taking money from the high skilled worker then the low skilled worker no longer factors in healthcare costs into his pay demand and so becomes happy with less pay while the high skilled worker will demand and get more money to cover his higher tax burden. The net effect is zero but less than zero due to administrative inefficiencies and public borrowing.

The ONLY way to increase living standards is through productivity increases.

[mikema63]

There is no benefit in welfare because prices adjust. If you give "free" healthcare to a low skilled worker through the government and pay for it by taking money from the high skilled worker then the low skilled worker no longer factors in healthcare costs into his pay demand and so becomes happy with less pay while the high skilled worker will demand and get more money to cover his higher tax burden. The net effect is zero but less than zero due to administrative inefficiencies and public borrowing.

The majority of taxes aren't paid by high skilled workers, they are paid by capital owners. You miss the part where the poor aren't left to die on the streets for lack of healthcare which is in and of itself a good thing. The net effect is positive, and administrative costs exist regardless of whether it's government or business.

The ONLY way to increase living standards is through productivity increases.

Productivity has been increasing for decades with stagnant wages. Productivity increases get split between capital owners and workers, and it all goes to capital in an era where unionization drops and welfare and support for working class programs is cut.

[SolarCross]

The majority of taxes aren't paid by high skilled workers, they are paid by capital owners. You miss the part where the poor aren't left to die on the streets for lack of healthcare which is in and of itself a good thing. The net effect is positive, and administrative costs exist regardless of whether it's government or business.

That's not true, progressive income tax hits high skilled high earning workers, sales tax hits everyone who spends but a high earner will spend more. Corporation taxes tend to be lower that income tax but regardless is a hit on the capital owners who invariably the same people who are high skilled workers because one the things high skilled workers do with their high earnings is invest it. Pure asset taxes are generally negligible and anyway to own more assets one must first make money to buy which is generally done through high paid high skilled work and also reinvesting the proceeds.

The "poor" aren't going to be left on the streets to die in a zero state welfare arrangement any more than a state welfare situation, that is an illusion. Governments are not kinder than real people and redistribution just warps prices and afflicts productivity.

The administrative inefficiency is greater with government because they can make unilateral "exchanges" (which are not subject to feedback correction) and because their "exchanges" are non-direct, so transactional friction applies on an extra step.

Productivity has been increasing for decades with stagnant wages. Productivity increases get split between capital owners and workers, and it all goes to capital in an era where unionization drops and welfare and support for working class programs is cut.

Welfare has been ballooning over the last several decades and it is this that increases the wage gap, because prices adjust. That and the opening up of the third world to international trade.

[mikema63]

That's not true, progressive income tax hits high skilled high earning workers

The majority of income tax hits the extremely wealthy, not from being upper middle class high earning worker but from owning companies and capital.

sales tax hits everyone who spends but a high earner will spend more.

Sales taxes are regressive sure, but they make up a far smaller portion of the tax burden.

Corporation taxes tend to be lower that income tax but regardless is a hit on the capital owners who invariably the same people who are high skilled workers because one the things high skilled workers do with their high earnings is invest it. Pure asset taxes are generally negligible and anyway to own more assets one must first make money to buy which is generally done through high paid high skilled work and also reinvesting the proceeds.

The people who own major amounts of taxes and are hit by capital gains and corporate income taxes are not high skilled workers toiling away for their money. They are owners of capital who make their money by owning capital not working.

The "poor" aren't going to be left on the streets to die in a zero state welfare arrangement any more than a state welfare situation, that is an illusion. Governments are not kinder than real people and redistribution just warps prices and afflicts productivity.

Well if we ignore all of history and the experience of countries before and after the development of universal medicine and create a fantasy world where this is even slightly true, then sure. In some fantasy world you have a point.

The administrative inefficiency is greater with government because they can make unilateral "exchanges" (which are not subject to feedback correction) and because their "exchanges" are non-direct, so transactional friction applies on an extra step.

Complete nonsense. None of that is true. Government does have feed back correction through the political system. The bureaucracy has been crippled by political forces who want people not to trust the government to do anything and perpetuates the myth that government bureaucracy is magically different and worse than redundant corporate bureaucracy.

Welfare has been ballooning over the last several decades and it is this that increases the wage gap, because prices adjust. That and the opening up of the third world to international trade.

Welfare has been consistently attacked for decades as have unions. What reality do you live in that welfare has been ballooning?

Saying prices adjust over and over again doesn't mean anything. Because prices aren't magic things that go up to infinity because multi billionaires make a billion less and poor people get a few hundred bucks to actually afford groceries. Prices are inelastic and competition keeps prices down because giving poor people enough money to eat doesn't mean companies can just raise their prices and not be out-priced by competitors. You are perpetuating economic myths.

Not even to mention the xenophobia at the end, god forbid we trade and lower prices.

[B0ycey]

If there is one thing the UK gets right (in my opinion) is welfare. Benefits for people looking for work with penalties for stupidity and working/children tax credits for low income. Seems to work quite well. Wouldn't change a thing.

[SolarCross]

The majority of income tax hits the extremely wealthy, not from being upper middle class high earning worker but from owning companies and capital.

They are the same people essentially. Bill Gates is just a particularly successful computer programmer. Richard Branson is just a particularly successful business manager. The proportion of earnings that are taken as profit shares or salary depends on the tax structure mostly, which way will be more efficient.

Well if we ignore all of history and the experience of countries before and after the development of universal medicine and create a fantasy world where this is even slightly true, then sure. In some fantasy world you have a point.

You are the one ignoring all of history. The difference between the health costs and access between an extreme implementation of government healthcare (UK's NHS) and an negligible implementation of government healthcare (Switzerland) is very slight and even there the difference is made by government's ability to squash the earnings of the healthcare workers they employ, because negotiating a pay deal with government is a losing prospect.

Complete nonsense. None of that is true. Government does have feed back correction through the political system. The bureaucracy has been crippled by political forces who want people not to trust the government to do anything and perpetuates the myth that government bureaucracy is magically different and worse than redundant corporate bureaucracy.

It is a feedback mechanism which is so slow, unresponsive, clumsy and weak it may as well not exist.

Welfare has been consistently attacked for decades as have unions. What reality do you live in that welfare has been ballooning?

It has its critics but so far they have been ineffectual in stemming the tide. Well it varies from country to country. Venezuala's looking pretty successful as far as ballooning goes, while Switzerland is apparently a dismal failure.

Saying prices adjust over and over again doesn't mean anything. Because prices aren't magic things that go up to infinity because multi billionaires make a billion less and poor people get a few hundred bucks to actually afford groceries. Prices are inelastic and competition keeps prices down because giving poor people enough money to eat doesn't mean companies can just raise their prices and not be out-priced by competitors. You are perpetuating economic myths.

No one is saying it is magic, I am saying they adjust. Increase income tax on high income earners and they demand and get higher incomes to compensate for the extra cost on them, the extra money to pay them will come from the low income earners who no longer need as much.

Not even to mention the xenophobia at the end, god forbid we trade and lower prices.

What xenophobia? Are you imagining things again?

[Suntzu]

It makes no sense to house welfare slugs in the most expensive and least health environment, inner cities. Create welfare communes in the country side. Make them self-sufficient, self-contained, to include school, medical clinic, etc. Make everything within walking distance so there will be no need for cars. Provide nutritious meals in a central kitchen/dining facility. Require the resident to contribute to the upkeep, mowing grass, picking up trash, etc. There will be no alcohol, drugs or cigarettes allowed, of course. Midnight curfew.

These would be completely voluntary but no other welfare assistance would be provided.

[Thunderhawk]

@ Mikema63

It sounds to me that you are saying that support for services that favour the poor is negatively correlated with faith in the (economic) future. People are hedging their bets with where they think they will be in their foreseeable future. If so, I agree. People can claim to have faith in the economy, law, etc.. but where they spend their time, money and political support could be a better inference of what they actually believe. How do you believe the inference should be constructed and tested?



If you mean to actually create policy, something that greatly benefits all at minor individual cost, seems to be more than just unpopular in America, it seems to be anathema. Comments are made about welfare, but how about water supply? Flint's water supply is I think a good case example. Many government officials and private people knew about it and did nothing, sounded no alarms, and once the story broke reaction seemed to be limited to loud token gestures with little follow up. Few people with power seems to care outside of sound bites. I will compare that to Walkerton in Ontario. A similar story, but with deaths, lead to a change in water policy in Ontario - testing, supply and protection.
If you want welfare or any other social services expansion, and done so without rampant corruption, I think the American attitude towards the commons needs to become more caring and long term.

[mikema63]

It sounds to me that you are saying that support for services that favour the poor is negatively correlated with faith in the (economic) future. People are hedging their bets with where they think they will be in their foreseeable future. If so, I agree. People can claim to have faith in the economy, law, etc.. but where they spend their time, money and political support could be a better inference of what they actually believe. How do you believe the inference should be constructed and tested?

That's definitely part of it, but I also think that even if people rhetorically support social services if they don't directly benefit themselves then their support will remain largely rhetorical. I think you can see this in exit polls of what peoples most important issues were when ranked and how they voted. A lot more people support welfare than they base their votes on it.

As for testing, if this is true then there should be a correlation between the size of the middle class and increases and decreases in welfare spending. With the size of the effect also being correlated to how much of the transfers of a program go to middle class people. The higher the income of people that can still benefit from the program, the smaller the decreases in welfare spending. Though because of the effects you mention that correlation would be smaller than the principle one.

Flint's water supply is I think a good case example. Many government officials and private people knew about it and did nothing, sounded no alarms, and once the story broke reaction seemed to be limited to loud token gestures with little follow up. Few people with power seems to care outside of sound bites.

Ultimately I think it's because Flint is a poor area with a relatively disenfranchised population and the problem ultimately didn't effect most people. Under my idea you would expect people to care rhetorically, but because the crises doesn't directly effect them they wont actually expend much energy dealing with it and incentives for the people who caused the crises were higher than the potential political fallout.

I will compare that to Walkerton in Ontario. A similar story, but with deaths, lead to a change in water policy in Ontario - testing, supply and protection.

I think an important difference here beyond income is race and the way race is treated in america. Flint is a minority community, people didn't identify with the community in a way that made them feel like "this could happen to us" like what seems to have been the case in walkerton. So the potential political fallout for not acting on the water supply issue in a general way is very very low for political candidates and they don't act.

It's a bit of a more controversial point to make but I think racial politics is also relevant to my overall idea. The GOP spends a lot of time framing welfare recipients as minority people and single black mothers who wont stop having kids or whatever. You can read some of that sentiment in some of the other posts in this thread. So beyond just the middle class size effecting welfare the perceived racial makeup of welfare recipients also has an effect on welfare support in white communities. Though race also correlates with poverty complicating the issues a bit more.

If you want welfare or any other social services expansion, and done so without rampant corruption, I think the American attitude towards the commons needs to become more caring and long term.

There are a slew of american attitudes that really need to change of course. But on the crafting policy front I think some consideration needs to be put into more universal benefit systems like UBI or subsidies for lower cost food which will disporportionately help the poor but benefit middle class people enough that they will fight for them if some harebrained politician decides food access just makes people lazy or whatever.

[mikema63]

Also side thought, could you model the likelihood of a politician voting a certain way based on their voters and donors demographics and polling, hindcast the model, and then aggregate the behavior congress from that?

[Decky]

Double posting is against the rules Mike.

[Godstud]

Double posting is against the rules Mike.

Kill him...

[Sivad]

Not even to mention the xenophobia at the end, god forbid we trade and lower prices.

Yeah cause nobody gets hurt by those lower prices. Liberals are even smug in their exploitation of the developing world.