Those who have for centuries fooled the rest of humanity into believing that their unearned, illegitimate, and unwarranted elevated status is justified know the findings of this painfully obvious fact to be true. Which is why they pull out all and every stop to prevent the majority from realizing it by vilifying anyone and anything that could spread that realization.
Also, if you agree with the above sentiment and are getting frustrated replying to all the shallow and cynical comments riffing on "wage slavery and welfare may be bad but it's the best system we can come up with", just read this other topic on the front page with people opening up about their skepticism towards something as banal as Dropbox: https://news.ycombinator.com/item?id=6625306
I assume you're including yourself in that - I bet you're in the top 1/10 of 1% of income globally: http://www.globalrichlist.com/
I am far from asserting that we have a fully equitable system, of either opportunity or outcome, but remember that inequality is an unavoidable result of private property and freedom of choice. (For example, give everyone $100,000 and freedom to spend or save as they will, and check back in ten years.) If there can be any voluntary spending for the benefit of your children, then inequality will persist and be magnified across generations.
Thank you for that link. Quite interesting. That being said though it is not a fair recrimination or charge. The problem is one of relative terms. Of course there should and will always be disparate income and wealth based on choices and circumstance. The problem arises in the immeasurably disparate and unbalanced nature of wealth and income distribution.
You have to keep in mind that even when talking about wealth and income distribution in the USA we are only just talking about the most obvious of disparities, the pile of snow on the tip of the iceberg. We don't talk about the value of soft disparity in things like opportunity, privilege, access, and corruption.
Your last sentence is the the one at the crux of the next step in human social and economic development. I pose that it is the linchpin keeping shackles on the vast majority of humanity.
As a matter of fact, society has not a single valid reason to allow concentration of excessive wealth on some kind of restricted group or "elite" (as, by the way, also promoted erroneously by the idea of the "American Dream"). Here are a few facts to explain that this concept is not sane at all:
- Excessive wealth is usually hoarded (in bank accounts), not used: But if you want the economy to work the most (creating jobs, etc.), you need to make money circulate as much as possible (which is not what rich people usually do).
- Excessive wealth ends up being used for corruption (famous example: the Koch brothers), simply because it can. You can not get rid of corruption without getting rid of excessive wealth concentration.
- Excessive wealth could "morally"/"ethically" only be justified by the existence of "really free will" (a concept which we can never reasonably take as a basis, given the fact that this concept is of religious nature, not rational thinking): Free will -> free decision -> merit of the better decision -> excessive wealth. As noted, this is how society excuses the existence of excessively rich people, and it's completely flawed and wrong.
- Excessive wealth will always has the tendency to become even more excessive: it gives its holder an "unfair" advantage.
- A part of excessive wealth will always be used to protect the "unfair advantage", thus eliminating equality even more.
> - Excessive wealth is usually hoarded (in bank accounts), not used: But if you want the economy to work the most (creating jobs, etc.), you need to make money circulate as much as possible (which is not what rich people usually do).
Another economical fallacy. When you put money in the bank, it's not standing there doing nothing. Savings are invested, loaned, used to create additional value. That's why banks want your money. If not, it would be a simple cost for them with no value to have it there, and they would charge you to keep your money instead of rewarding you for it.
> Excessive wealth will always has the tendency to become even more excessive: it gives its holder an "unfair" advantage.
Nature is unfair. We don't have the same genes. We don't share the same risks for illness or reproduction. We are not all top athletes. Stop the egalitarian bullshit. The only thing society should do is ensure everyone has the same rights in regard to the Law no matter how rich, how poor, how different you may be. Anything beyond is just a call for arms-race to make everyone the same in every aspect (and incidentally, to render everyone poor by default).
A naturalistic fallacy[1] if I ever saw one. Nature is grossly unfair. It is also extremely cruel. Of course, it's neither of those things because these are anthropic traits – nature just is. Modeling your behavior on "nature" is senseless. Maybe we should all behave like electrons, absorb or emit energy occasionally, and move about more or less randomly[2].
> Stop the egalitarian bullshit.
Whether you subscribe to humanistic politics or not, calling it "bullshit" is ridiculous. We are not trying to change or defy nature, or even romanticize it (like I said, nature is). The question everyone is trying to propose answers to is how should human beings behave – as individuals and as a society. The answers have no intrinsic truth to them. They are a result of each one's peculiar sentiment.
[2]: Actually, there is a hypothesis that all electrons are exactly the same - in fact, they are the same electron - so, according to that we actually share our electrons with everyone and everything else; maybe nature is egalitarian after all.
> Nature is unfair. [...] The only thing society should do is ensure everyone has the same rights in regard to the Law no matter how rich, how poor, how different you may be.
Since you are so readily dismissing egalitarianism on the basis of being unnatural, I'm sure you have a great natural explanation for things like property rights and law.
For all I care, you can have libertarian or egalitarian ideals, but make no mistake in thinking that either of them are natural. If the point of a government or rule of law was to keep the natural order of things, we wouldn't need it at all. Not that I think that being unnatural is inherently bad, but don't try to put yourself on some sort of high ground by saying that your economical philosophy adheres to some sort of natural fact if it doesn't.
I'm not just dismissive of Egalitarinism only because it's unnatural, but also because it goes against the individual's freedom in the end. There will be always be a point if you follow that line of thought where the power in place will crush your individual interests just for the sake of making your condition the same as everyone else (even on the basis of good intentions...). That, in itself, is against Human nature, where humans strive to build advantage for ourselves to improve our conditions and our odds to survival and to lead a better life. And don't tell me Humans don't do that, everyone wants their kids to be in good school and to get a better job than themselves. It's universal no matter from which culture you come from.
With Egalitarianism, you end up with policies where education is strictly controlled by one governmental body, and where Education goes to the lowest common denominator and becomes basically crap for everyone involved. You end up with public health services which are subpar, with waiting lines and mediocre equipment, because you want to treat everyone the same way while running on limited resources. And this has already happened in many countries in Europe where such policies were driven to the core of the governmental actions. In the end you create more inequalities because people who really have money have the possibility to leave the country and get better services elsewhere, while the middle-class and the poor are forever restrained to a diminished quality of life.
My point is that libertarian ideals are more respectful of individuals, because they allow for the flexibility of choosing your own course of action, maximizing your responsibility. In that sense they are closer to the natural order where one individual can create an advantage for themselves based on their action while living as part of a social group. I won't elaborate here on the principles and the philosophy behind it, it's a different subject altogether.
No one is trying to "make everyone the same as everyone else". Where did you get that? Even communism doesn't attempt do that (the communist ideal is that every individual should contribute their particular, unique talents to society, and the fruits of their labor will be shared by all).
> libertarian ideals are more respectful of individuals
Libertarianism, at least in its current incarnation in America, is the most hypocritical and abusive of all political ideologies, because it insists that "one governmental body" (as you call republican democracy) exert violence to uphold property rights. So the rich's source of power – their money – would be protected by governmental violence, while the poor cannot exert their own power – their numbers. This is hypocrisy, and is disrespectful to intelligence. What about this, though: remove all regulation and central control, but in order not to deprive the poor of their power while upholding the rich's, why not dismantle the police, too? Let the rich amass their wealth, and let the poor rob them. This is the only intellectually honest libertarianism: it's called anarchy, and personally, I like it. But barring that, if you want the government to protect your wealth, I think it's only fair to let the poor exert their power by forcing you to share some.
>Education goes to the lowest common denominator and becomes basically crap for everyone involved
>health services which are subpar, with waiting lines and mediocre equipment
>the middle-class and the poor are forever restrained to a diminished quality of life
Are you sure you aren't talking about present day America? All of these things have become widespread here as a result of income inequality--something you've said you support.
On the other hand, one might argue that egalitarianism is more respectful of individuals by systematically making sure that every individual has their basic needs provided for independent of a vast amount of possibly impairing conditions that might be totally out of their control.
You have to realize that while libertarianism might offer more choice to an already economically privileged person, it comes at an expense. When capital controls the most basic needs, your ability to choose what to eat today might come at the cost of someone else's choice of whether or not to eat at all.
> I'm not just dismissive of Egalitarinism only because it's unnatural, but also because it goes against the individual's freedom in the end.
Only if you define an individuals freedom as "freedom to deprive others of access to shared natural resources through violence" (I use the term violence since libertarians seems overly fond of referring to government interference as "violence"; except when it comes to enforcing private property). Hence Proudhon's "property is theft".
> With Egalitarianism, you end up with policies where education is strictly controlled by one governmental body
Why? Most egalitarian ideologies want to dismantle the state and introduce some form or other of direct democracy which would preclude strict government control of education or pretty much everything else.
Marx, for example, considered the only political purpose of the state to be the oppression of one class by another, and the goal of socialism to remove the class struggle by enacting policies that would remove the capitalist class, by turning them into workers. And the natural end-point, according to Marx, would be the "withering away of the state", as in a class-less society it would have no political purpose.
Anarchists argue for a more direct approach: Destroy the state outright.
> and where Education goes to the lowest common denominator and becomes basically crap for everyone involved.
Why? The original form of socialism was the idea of a meritocracy where a central goal would be to ensure people were given the opportunity to develop personally and promoted according to skill (read up on Saint Simon).
> You end up with public health services which are subpar, with waiting lines and mediocre equipment
This is contrary to real world experiences, where the universal healthcare systems for the most part are cheaper and better than mostly privatized systems like the US.
> And this has already happened in many countries in Europe where such policies were driven to the core of the governmental actions.
So this is why most European healthcare systems consistently rank better than the US system?
> My point is that libertarian ideals are more respectful of individuals
No, it is respectful of property owners. Libertarianism is what you get when you take anarchism or communism but don't follow the thinking through to its logical extension, but single out private property for special treatment.
Somehow, according to the libertarian, we need government enforcement of one persons "right" to deprive others of access to certain resources, while we don't need governments for pretty much everything else. The hypocrisy of this doesn't seem to phase anyone.
I see a lot of attacks on any sort of libertarian (and for balance, many attacks at libertarian straw-men) on HN that use this same sort of inversion of force - the "stopping theft is violence" argument. Yours seems well-written enough that maybe you can answer one question I have about your viewpoint.
In your post, you refer to "shared natural resources" and then "deprive others of access to certain resources". Do you just mean "shared natural resources" as things like rivers, oceans, air, fossil fuels or does the argument really mean everything in existence because it presumably leveraged those things?
For instance, suppose I pick up a rock which everyone agrees has almost no value. I chip at it with another rock for a week until it now is in a shape of some useful tool, furniture or art. In your ideal system, who owns the value created through my labor? Do all people have equal claim to the item because it started out as a rock which was a shared resource? Do I own it? Something else?
> Do you just mean "shared natural resources" as things like rivers, oceans, air, fossil fuels or does the argument really mean everything in existence because it presumably leveraged those things?
Generally, the theory behidn the argument you refer to is that everything in existence consists of two things:
1) Shared natural resources, and
2) The application of individual labor to shared natural resources.
So, everything that is constructed as "property" has at least has a component of shared natural resources being withheld from the commons, for which some duty is owed back to the commons. Even if the shared resource has little use value in its natural state, the act of denying others the right to apply their labor to it has a cost to the commons.
> For instance, suppose I pick up a rock which everyone agrees has almost no value. I chip at it with another rock for a week until it now is in a shape of some useful tool, furniture or art. In your ideal system, who owns the value created through my labor? Do all people have equal claim to the item because it started out as a rock which was a shared resource? Do I own it? Something else?
In any system which recognizes the existence of an extraction of resources from the commons as described previously, "ownership" trends to be qualified. Most likely, you would be (presuming that your extraction of the rock was within the rules governing the use of resources from the commons) the "owner" of the tool, but you would also owe a duty in exchange for both the permanent effects on the commons of altering the rock and the temporary effects of withholding the item from the commons. There are many ways this duty might manifest, but the most common would be various taxes on value or produced income.
What I meant is: this money is not used to promote consumption (which it were in the hands of poor people).
It's consumption (of services or products) that creates jobs.
Jobs get created because there is demand for something, not because some rich elite decides they can invest (because they have money). Investment does not depend on the existence of some rich elite. "Trickle down economics" was a joke created by a couple of rich people, to justify and protect the inequality.
Investment can easily be accomplished by "the crowd", and it should.
> Jobs get created because there is demand for something
In the modern society, you are beyond the natural "needs" of the population and you don't need any of the new products that are sold to you. Obviously nobody needed a iPhone pre-2007 and now suddenly everyone has to have one. There's nothing such as "fixed demand". Demand is created by new products, designed by rich elites or companies that can manufacture them and need significant investment to make them a reality.
And the "crowd" investment system already exists, by the way. It's been around for 300 years, it's called the stocks exchange.
> The only thing society should do is ensure everyone has the same rights in regard to the Law no matter how rich, how poor, how different you may be.
No, society should seek to maximize widespread improvements in quality of life and further humanities cause through social, technological, and cultural investments. Nature may be unfair, but just because we were born from it does not mean we have to model out society after it.
> No, society should seek to maximize widespread improvements in quality of life and further humanities cause through social, technological, and cultural investments
That's just your point of view. "Society" is not a unique body, it should be based on the sum of the individual aspirations of everyone part of it.
>>> The only thing society should do is ensure everyone has the same rights in regard to the Law no matter how rich, how poor, how different you may be. Anything beyond is just a call for arms-race to make everyone the same in every aspect (and incidentally, to render everyone poor by default).
And that's just your point of view. You're just arguing over what society should be, neither of you are privileged to The One True Definition.
> Another economical fallacy. When you put money in the bank, it's not standing there doing nothing. Savings are invested, loaned, used to create additional value. That's why banks want your money. (...)
Actually, it's the other way around. Banks loan money first. Only then do they worry about the amount of cash they have in their vault. The parent post is actually correct for the most part: excessive amounts of wealth tend to end up blowing asset bubbles rather than be put to good use in the economy.
You might find this talk by Steve Keen (of Debunking Economics fame) interesting if you've an hour or so:
This is such an asinine argument against loanable funds theory and is equivalent to saying, "Actually, it's the other way around. People drive their cars first. Only then do they worry about the amount of gas they have in their tank." You see the same kind of nonsense from MMTers who use their confused understandings of accounting identities to justify their policies. In addition, the notion that entities that have excessive amounts of wealth, ie they have accumulated capital through successful investments, would be less likely to put their money to good use is silly. It's not capital accumulation that leads to bubbles. Historically, it's been caused by an influx of money not supported by production due to currency debasement, precious metals stolen from the new world flooding into the Holland, various precious metal rushes, excessive printing of paper currency or bank money, or suppression of interest rates.
Nature may be unfair, but it is way more fair than modern wealth distribution.
The richest 300 people in the world have more money combined than the poorest 3 billion people. You don't see deviances like that in genetics.
Also, if you believe all Americans (also applies to all other nationalities) have the same rights in regard to the law, well I don't even know how to respond to that, because believing that would make you incredibly, desperately naive.
To use your metaphor, one player is given 300 free shots while everyone else only has one. And if you don't sink enough baskets, you starve. Also don't call in sick for a game, nobody cares.
I don't understand why HN is so strongly anti- corporate and govt monopoly and yet so massively pro-personal monopoly.
> Also, if you believe all Americans (also applies to all other nationalities) have the same rights in regard to the law, well I don't even know how to respond to that, because believing that would make you incredibly, desperately naive.
Where did I ever say that? I never even began to imply this. I'm just saying that that's what how the Law should be working as a central element of society.
> The richest 300 people in the world have more money combined than the poorest 3 billion people
So, what is your point, exactly ? The world would be better place if everyone was as poor as the next ?
You could say that the Universe is incredibly unfair, after all, for all we know, Earth is the only planet with advanced life in the Milky Way, and would it be better if instead there was bacterian life everywhere instead ?
Besides, whatever your point is, it's moot, because the key thing you should look at is : is the life of the 3 billions people improving ? The answer is a vibrant "YES" and the world as a whole is getting out of poverty, thanks to the dark evil of capitalism, which incidentally also works pretty well to get everyone out of the shit hole.
That vibrant "YES" rings hollow. Europe is going through a lot of shit with rise of outright fascist parties - e.g. Greece's Golden Dawn (they might have removed Golden Dawn but the resentment needed for another fascist party to form is there, waiting). If one of more powerful states goes fascist (e.g. USA, Germany, France), you could very well see massive bloodshed and wars. And please don't tell me wars are good for anyone.
If social mobility and equality are disrupted, the society is in a bad position.
and the vast majority of those three billion are in the state they are in because of politicians. Whether their own or others. Take the money from those 300 and I doubt the number served with it would matter nor have a lasting impact.
Governments exist to give everyone a basic set required services. I think even the biggest free market/ small government advocate would agree that access to clean drinking water is one of those services.
If you dismiss some things the government provides as being unnatural, you are drawing a very crooked line of "naturality" if you somehow manage to include clean drinking water.
Access to health care gets conflated with some universal or Obamacare-type system, though.
Case in point: my grandparents are on medicare. They pay basically nothing for it. One of them just had bypass surgery and the other a knee replacement. Cost to them: $0.
We pretty much have universal access healthcare in the US before the Obamacare stuff if you go through the system.
Well, that depends on the government. All the way from the very basic necessities to keep citizens alive to a guaranteed minimum income and full health, education and other services.
I don't think that there is any right level for all countries.
As to the relationship between savings and investment, and the role of banks in there, ask yourself the following question:
Suppose that Alice decides that, from this month on, she will start putting aside 10% of her monthly income into a long-term savings account. Will this decision cause the bank to make more loans?
By default, the answer seems to be no. After all, banks lend out money when creditworthy borrowers show up at their door. How could Alice's decision possibly encourage anybody to borrow? If anything, her decision has reduced some businesses' incomes, and those businesses are now less likely to ask for a loan because they have less reason to expand their business.
If you want to argue that the answer is yes, you'll have to point out a clear transmission mechanism to justify your answer.
As to the point of why banks continue to offer savings accounts, the answer is mostly one of interest rate differentials. Banks don't have to offer savings accounts. They could refinance themselves via other means. It's just that those other means typically come with a higher interest rate.
If a bank gains extra money in the vault, won't it lower the interest rate it's offering on loans to try to attract a credit worthy borrower so the money isn't just sitting there?
Perhaps. There are two problems that significantly weaken that kind of transmission mechanism:
1. It is not clear how sensitive to interest rates business are anyway. If you have an X increase of savings, which reduces business revenue by X but also decreases the interest rate by Y, which of those effects is stronger? It seems to depend a lot on circumstances.
2. To a first approximation, there is no incentive for banks to decrease their interest rates in the first place, because they won't have extra money in the vault!
This may seem counter-intuitive, but it follows from how the banking system works: If you transfer money to bank A and leave it there, the bank is initially going to have more money in its account at the central bank (aka "reserves" aka high-powered money). This earns zero or negligible interest, and so the bank does have an incentive to get rid of it.
However, when you did your transfer, that central bank money (aka "reserves") arriving at bank A did not come out of nowhere. It came from the bank you made the transfer from, say bank B. B now likely has a short-fall of reserves (because while bank B has "lost" X amount of reserves, and the sum of customer accounts has been reduced by X, its reserve requirements have only decreased by rX, where r is the reserve ratio).
So, bank B will be happy to borrow (X - rX) reserves back from bank A, probably at current market rates, while bank A must hold on to the remaining rX due to its own increased reserve requirements. Everything is back in balance without any change of interest rates.
Things are slightly different if you put your money into a different type of account or bank bond in such a way that the sum of all reserve requirements in the banking system decreases. In that case, banks have surplus reserve requirements and will therefore bid down interest rates in the interbank market.
Under normal circumstances, the central bank - which has a fixed interest rate target - will step up and sell assets in exchange for reserves so that the surplus reserves disappear. Hence, banks still do not have any incentive to reduce the interest rate that they offer to the public!
This really only changes when the central bank decides to change its interest rate target.
What about interest rates offered to customers? It seems that those really tend to be calculated as cost-plus based on the central bank's rate target (with some long-term expectation thrown in). Plus, they probably move with some delay because that market isn't so fast. Since the target rate has been at zero for a very long time now, savings behavior really shouldn't make a difference.
Mostly though, I think it's the first point that matters: Business decisions aren't that interest rate-sensitive in the first place, at least compared to other considerations.
As far as I know there are still powerful people ending up in prison (at least in the US) once in a while, which seems to go against your last point. If Money equalled power then Madoff would never have landed in prison with a 150 years sentence.
How much time will the gentlemen convicted of OVER A TRILLION DOLLARS OF LIBOR MANIPULATION get? Nothing - the only people really suffering there were mortgagees and small to mid size banks.
The banks involved will pay maybe a billion dollars in fines, borne of course by both shareholders (including your 401K) and customers. Meanwhile, the banks profited far more than that, and the individuals involved simply got moved to another office.
I met one of the VPs for Lehman Bros, responsible in all but law for what happened in 2008. He has a very nice job working for a major Asia Pacific bank, and earns a hell of a lot more than you or I ever will.
The problem with this line of thought is that it's never ending if you try to "fix things" for everyone. Because there's limited resources and there are choices you have to take anyway and the solutions you will implement will never end up being fair for everyone, while it will prove to be a burden for society as a whole.
but it's not a quest for perfect fairness - rather an attempt to maximise benefits. $300B in a vault, whilst millions starve is pretty obviously unfair, and actually detrimental to society overall. generally, when inequality grows, so does societal instability and discord.
At some point, we as a society have to argue with the American Ideology of "free markets for ever, for everyone, for everything."
It simply does not bode well for our species in terms of morality, survival or many other metrics to have people dying of thirst while another man washes his collection of Maybachs.
Some inequality is inevitable. Too much inequality is a disaster.
> Another economical fallacy. When you put money in the bank, it's not standing there doing nothing. Savings are invested, loaned, used to create additional value. That's why banks want your money. If not, it would be a simple cost for them with no value to have it there, and they would charge you to keep your money instead of rewarding you for it.
This really isn't true especially at the moment. There is plenty of money at the moment looking for investment opportunities at the moment. Interest rates are near zero (suggesting that is the return expected by banks). Even when this is not the case unless there are 100% reserve requirements on banks the banking system is not limited to lend only the the savings that they receive but can create their own money and it literally costs them nothing to lend money. The just create an asset and a matching liability and you have your loan.
Okay, so I agree that money in the bank doesn't do nothing. However, ultimately one of the main reasons why we want a thriving economy is to raise the quality of life for the people. If you look at the trends over time, in real terms, the rich have been getting richer and the poor have been getting poorer. If you look at other countries around the world, this seems to be a thing that happens as income disparity increases. Basically, even if having a concentration of wealth doesn't make the economy bad (that point is debatable) the benefits of the economy are not fairly shared by the people.
Which brings us to the next point, which is a bit of a mess, so I'm going to have to pick it apart in detail. Firstly, you are essentially saying that all people are not equal, and so it is not "fair" for wealth to be shared equally. This is true, but irrelevant. No-one has asked for wealth to be shared equally, we are asking for less of a concentration of wealth. We are saying "the system is not fair" you are replying "total egalitarianism is not fair" - irrelevant! Secondly you say that the only thing a society needs to do in order to be fair is make sure that everyone has the same rights in regard to the law. This is either obviously false or impossibly hard, depending on how you define the application of law. If you just think that the rules should be applied equally, then this is obviously not enough to ensure a fair society. For example, you could make it cost $100,000 to run for office. This is a rule that may be fairly applied to everyone, no matter their wealth. It just so happens that only rich people will be able to afford it. For another example, you could have entrenched media companies that act as gatekeepers into the political process (as we currently do). Now, nothing stops an individual with no connections to these entrenched interests from starting their own media empire - but even if they had a chance of succeeding, it still forms a massive barrier to entry that could hardly be called fair. If you expand your idea of what the law covers to include such things, then you're essentially saying is that the only thing society should do is have fair laws that are applied fairly, where a person of merit has an equal chance of success regardless of the circumstances of their birth. Which is great, but impossibly hard and definitely not what is happening right now. The third thing you say is that anything beyond the fair application of law is a race to make everyone the same. This is clearly not true. I don't want to live in a world where everyone is the same. I just don't think our current system is fair. Personally I think that everyone deserves to be fed, clothed, sheltered, educated and given access to healthcare just as a participation prize for being a human being. I think we can easily afford it (for proof, just look at countries with low income disparity). The set of standards I am describing is what people call human decency. It is not total egalitarianism. The last thing you say, almost in passing, is that making everyone the same in every aspect renders everyone poor by default. This is a strangely pessimistic view of matters. If you rendered everyone the same, then you'd render everyone average income by default, not poor. Unless you were talking about poverty in an objective rather than relative sense, which is either untrue or else you have very high standards. Even if we did descend into some kind of egalitarian nightmare where everyone was provided for equally (oh lord! the horror!) the quality of life would be fine. There's plenty of resources to go round, especially in the West where we have a lot of wealth. The real problem would be providing incentives for people to work, but I doubt that was the point you were making. (Incidentally we could, for example, create a currency that affords social status and narcotics rather than general material goods - which is, I suppose, just a streamlined version our current incentive system.)
> If you look at the trends over time, in real terms, the rich have been getting richer and the poor have been getting poorer
No, this is totally false. You can say that the gap between very rich people and poor people has been expanding, but both groups have been getting richer, and as a whole the world is clearly getting out of poverty. The poors are getting less poor from generation to generation. And it's fundamentally "normal" that the rich get richer faster than the poor because if you have 10% of asset increase every year for both groups (just a random number) anyway the larger assets will grow faster (in relative terms) and the gap will increase. This being said, the poor do get richer over time, there's numerous presentations on that subject on TEDtalks from different researchers. Don't deny the facts.
pg once pointed out there may be far fewer startups in a society that does not allow concentration of excessive wealth. That's at least one single valid reason.
"People start startups in the hope of becoming much richer than they were before. And if your society tries to prevent anyone from being much richer than anyone else, it will also prevent one person from being much richer at t2 than t1."
Some people start startups in the hope of becoming much richer than what they were before. Most of the people for whome that is a major motivator are gambling, as your risk of failure is massive, and chance of that big payoff is ludicrously small.
If you want to become much richer than before, the more rational approach for most people is likely to be to work harder, live frugally, and invest everything they possibly can set aside.
I'm not so sure we'd be worse off without those few people whose only motivation for a startup is that they care so much about the potential payoff that they'd not start a company if they couldn't strike it big.
His logic is a bit off. In a truly efficient market (big if), if taxes were raised so significantly as to have a major impact on the rewards, then you would get a corresponding reduction in risk. I.E. Instead of having a 1 in 10 chance of a startup making it (as he claims in the post) you would probably end up with a 1 in 8 chance (or something similar) as the smaller rewards would, in theory, reduce the number of competitors. You would still end up with the same number of winners however.
In reality, there are a number of intangible benefits to starting a business that will overpower any reduction in startups due to higher taxes. Autonomy, excitement, and having a large impact all contribute in the decision to take the risk. Additionally, starting a business is still one of the only ways to strike it rich (unless you get lucky in the athlete/musician/actor department). So for most people with sizable ambitions, a reduction in rewards due to higher taxes will not have any meaningful impact on their decision.
> pg once pointed out there may be far fewer startups in a society that does not allow concentration of excessive wealth.
There will be far more individual entrepreneurial efforts in a society which does a better job of insuring that:
1) People have the basic needs reliably met independent of wage-labor arrangements, reducing the incentive to choose wage labor of entrepreneurship, and,
2) Marginal taxes are kept low for those who have not yet acheived above average wealth, increasing the ability to acheive moderate concentrations of wealth and for people other than the excessively wealthy to self-fund entrepreneurial efforts.
These may tend to be more "lifestyle businesses" than "startups", but I don't see any reason to see the latter as having greater social value than the former.
Is that really why people start startups? I'd hypothesize that most interesting startups were started for more fundamental reasons than just to get much wealthier than other people. Many startup founders are passionate enough about what they're doing that they'd do it even their returns were less than what they would otherwise make (e.g. compared to a Google or Facebook salary).
In any case, startups are more constrained by opportunity than desire. Many people have both the ability and desire to bootstrap a startup, but have to work a regular job because they have to provide for their kids, and can't afford the risk. In more equal societies, these people have an easier time quitting their jobs and starting a company.
"This argument applies proportionately. It's not just that if you eliminate economic inequality, you get no startups. To the extent you reduce economic inequality, you decrease the number of startups."
But that is not the argument he makes leading up to the quote. It may seem like semantics, but mixing absolute and relative inequality makes an increase in equality seem unfavorable.
> Excessive wealth is usually hoarded (in bank accounts), not used: But if you want the economy to work the most (creating jobs, etc.), you need to make money circulate as much as possible (which is not what rich people usually do).
The savings identity is usually misinterpreted by laypeople, though.
Here's a small story to illustrate why S=I can be very misleading: Company C has always produced some type gadgets, for many years. Demand for the gadget has been stable, they just keep producing to what the demand is, end of story. Sounds boring, but this is what 99% of the economy is.
Now, for whatever reason (a recession, a policy change, it doesn't really matter), consumers want to save more. In doing so, they decide to reduce their purchase of C's gadget.
What happens now? Well, saving S goes up. At the same time, company C involuntarily builds up an inventory of gadgets that they had already started producing but which they can no longer sell. This build-up of inventory is counted as investment in the national accounts! So I goes up, and the identity S=I is maintained.
But S=I is maintained in a way that is in total conflict to the typical layperson's interpretation of the equation.
So, yes, an exogenous increase in saving will tend to push up "investment" (in quotation marks because it is involuntary investment). When all is said and done, we may all well be poorer for it in real terms, because the level of economic activity may have been reduced.
On the other hand, when there is an increase in voluntary investment, then I goes up. Then people's income increases, and that tends to lead to an increase in savings. So S=I is also maintained, but we tend to be richer for it in real terms due to a higher level of economic activity.
The real problem is not excessive wealth but generational transfer of such. Let someone reap the benefits. BUT then take away the majority of the wealth away upon death so he could not transfer it. Let his decendands be able to inherit total value of 100 each (whatever the poverty line is that year) and take away the rest.
This way we make the emerging of elites harder and falling out of them easier.
Not only wealth is transferred from generation to generation. Jewellery, old family houses, paintings and lots of other possibly expensive stuff. For many people, it's not about money. It's memories and other non-financial stuff. That 200 years old watch from your grand-grand-grand-father? Whoopsie, it's expensive these days! If you try to take away that, people won't be happy.
If you try to loopholes to allow that kind of transfer, people will use that to transfer wealth to their children. Even if you don't add them, there're many ways to work around that. For example, parents may sell stuff to their children for many times less than market value. You can't deny people rights to sell stuff for whatever they want, do you?
There's no law that can't be worked around. Some people want laws to hide real world from themselves. Other people accept reality.
It's also pretty interesting to look at the other side of this: the person giving away the money.
Michael Norton and a group of researchers (http://www.hbs.edu/faculty/Publication%20Files/10-012.pdf) at HBS have found that giving away money increases happiness, and that happier people give away more money. This logic is awesome.
Read the article. It is about a single, one-time, no-strings-attached payment, requiring a business plan to qualify (Although there is no follow up on the plan). It is not an ongoing payment.
"Recipients spent a third of the money learning a trade (such as metalworking or tailoring) and much of the rest on tools and stock."
Can't agree more. Myself and few friends are part of an "AAD" initiative where we visit deprived and apart from donating money for basic amenities, we take care of school fees and other things. We make sure to visit and actually engage with people other than third party donations. I am sure there are others who do the same.
Would this reduce administration cost also? We always hear of charities where 20 cents on the dollar actually makes it to the people. If this can reduce admin cost by not having to make, control or follow up on conditions it could really help more money get to where it is needed.
Yes, that's one of the main advantages. Also an advantage is that no money is lost dealing with the corruption that is so rampant in many underdeveloped countries.
There's a great Planet Money/This American Life episode about this topic:
The article states the UCT's have less admin costs but are still not as good as CCT.
Which is the point of admin costs, the money goes where's it's needed and not wasted.
This article is just about the fact UCT's are not a total waste of money, they are not the best way, but people are quite surprised they are better than just burning it.
Perhaps it can be used as food for thought for future CCT hybrids.
in singapore you can see the effects of all that economic growth besides the billion dollar gardens and F1 races and casinos...in residential areas many old folks collect empty cans and cardboard for a living. despite laws that compel offspring to financially support parents. you don't see beggars on the street, nor homeless people. and unemployment is super low. its..fairly interesting.
It works when there a private companies giving the money. When it's the government, like here in Brazil, it turns into vote buying, they start to scare the poor saying if the other party wins the elections, they will stop giving money and shit.
Not to be a downer but an academic study found this to have limited effect. I heard about it on freakonomics so can't vouch for how biased it was. Just an interesting point against the economist article. http://freakonomics.com/2013/09/26/would-a-big-bucket-of-cas...
The Economist article talks about someone in Kenya being given $1000USD. That's about 84800KSH.
Minimum wage for Kenya varies, but 4855KSH ($57USD) per month is what a general laborer gets.[1]
That person is getting very roughly 17 months income. That's very different to "winning the lottery".
But perhaps this man is one of the 50% of Kenyans living below the poverty line.[2] ($2USD per day) So, if he gets $1.25USD per day a $1000USD lump sum would be a bit more than 2 years income.
Microfinance is not the wonder that people once thought it was[3], but giving money to people directly seems to work quite well.
Here is a wild concept, mandate that people take care of people. Use the government only to enforce this. The government is full of corruption and waste, they are innefective in matters that require an actual soul (such as people who have made mistakes, people who have no reason to care, impoverished people, prisoners ETC.)...
What if you could take the percentage of taxes that you spend every year and choose whom to help with it. Of course those who were receiving it would have to fulfill certain requirements, but wow what a concept. How about deducting some amount from that mandatory contribution of the person were to volunteer in the community?
We would have charities all over the place competing for this money, competition would produce far better results than the abysmal record of the state/federal social services. Many people may even give the money as cash to some people - personally. Have government oversight review and publish how well any charitable organization is doing at helping people become self reliant financially and socially (this will separate the wheat from the chaff).
People may actually become caring and have empathy for these people that they are helping. When people help others, they become happier people. Many people may even donate more money on top of the required amount and volunteer or switch careers to one that helps those in need.
Imaging that. That is something that no government could ever accomplish.
The government really de-humanizes people. It takes our money and does some things to help people. We never see this happen directly. The government keeps the bums and beggars out of sight so we never even see them. The government jails drug attics and other impoverished criminals so we never see them either.
All we ever see from the media is bad news. We never see lives being turned around from welfare or other social services.
My money says that once people start taking care of each other, their humanity will grow 1000% ala the Grinch.
But "the government" is people. Society said, "let people take care of people", and government is the answer to how to do that. The government is "full of corruption and waste" because people are.
We constantly try to find ways to organize society (and government as a crucial part of society) in ways that minimize corruption and waste, or mitigate their effects.
> That is something that no government could ever accomplish.
What you're suggesting is simply a new form of government. It might be great; it could perhaps work. But it's certainly not something to suggest offhand. Our current form(s) of government is a result of centuries (and millennia) of gradual, and sometimes revolutionary, progress. I wouldn't just throw it out the window. But hey, if you want to start a revolution, by all means – go for it. It's been a while since we've had a good revolution in the West. And if you're American, then it would be doubly great because we haven't seen any political revolutions in America since its founding (though if you're American you probably won't, because Americans like complaining about their government and alienating themselves from it, but they tend to do very little to improve it; at the end of the day, they're just too docile).
The way matter is subatomic particles. The same thing at very different scales exhibit very different properties, and although technically true, it's misleading to consider governments as sets of people. They lack some essential features exhibited by individuals and small groups, features which we aptly call _humanity_.
The parent's proposal is to delegate stuff which require humanity to much smaller groups, which operate at scales where humanity still exists. It's a good idea, albeit not a new one: decentralization. It's very difficult to execute properly. Moreover, humanity isn't only composed of positive qualities: poorly executed decentralization easily turns into tribal clientelism.
Poorly executed centralization easily turns into communism, which fails spectacularly on anything but tribal scales.
Decentralization sure has its problems, but tends to beat the alternatives. Of course, where you end up in each system and how you benefit/suffer there may influence whether you agree.
I certainly wasn't advising against decentralizing. Only warning against thinking of it as an easily implemented no-brainer, a la "just decentralize everything, and everything is going to start working smoothly, like magic". Naive libertarianism hasn't proved to be more effective than naive Communism, and most people including myself believe it isn't.
Excellent reply. My take on this is. People who spend other people's money by the truckload are rarely going to spend it in the wisest possible and responsible way. The other points are these... With government spending the money, a small percentage of people are distributing this money that was collected from the general populous and the feeling of giving someones money away to others is not the same as if it were your own money (especially when it is going to poor results programs)
Government being responsible for social security is a pretty new idea. The charity driven system he describes was the main way of doing things through the 1900s.
Churches, professions (benevolent funds), and clubs (as in masons) looked first after their own, and their children, when they fell on hard times. That was what they were for. That was why they were so vital in society.
You remember in Oliver Twist, where child orphans not lucky enough to descend for a professional are put to work as pseudo slaves in a workhouse? You remember when they escape to work as thieves and probably prostitutes for an older gangmaster? Not in your production of the show?
Anyway, that's what a small state, and charity driven welfare looked like.
I totally agree with the sentiment, but "government being responsible for social security" is certainly not a new idea. The bible [1] established a sort of central welfare, and the Roman Empire provided welfare as well[2].
[1]: http://en.wikipedia.org/wiki/Tithe#Mosaic_law: The third year was called "the year of tithing" (Deuteronomy 26:12-14) in which the Israelites set aside 1/10 of the increase of the land, they were to give this tithe to the Levites, strangers, orphans, and widows. These tithes were in reality more like taxes for the people of Israel and were mandatory, not optional giving. This tithe was distributed locally "within thy gates" (Deuteronomy 14:28) to support the Levites and assist the poor.
[2]: http://en.wikipedia.org/wiki/Welfare#History: In the Roman Empire, the first emperor Augustus provided the 'congiaria' or corn dole for citizens who could not afford to buy food. Social welfare was enlarged by the Emperor Trajan.Trajan's program brought acclaim from many, including Pliny the Younger. The Song dynasty government (c.1000AD in China) supported multiple programs which could be classified as social welfare, including the establishment of retirement homes, public clinics, and paupers' graveyards. According to Robert Henry Nelson, "The medieval Roman Catholic Church operated a far-reaching and comprehensive welfare system for the poor..."
> And if you're American, then it would be doubly great because we haven't seen any political revolutions in America since its founding (though if you're American you probably won't, because Americans like complaining about their government and alienating themselves from it, but they tend to do very little to improve it; at the end of the day, they're just too docile).
If the US Civil War doesn't qualify as a political revolution, then I would argue nothing possibly could.
It started as a political argument in fact. It was about how to govern, and what rights the states possessed as part of the United States. Every aspect of the Civil War and its outcomes were political in nature.
It was absolutely a political revolution first and foremost. The war settled the political dispute.
"But "the government" is people. Society said, "let people take care of people", and government is the answer to how to do that. The government is "full of corruption and waste" because people are."
People spending their own money are almost always less wasteful and more careful where that money goes.
Almost everyone wants to help needy people. Most are just too busy, don't want to see that part of society, or don't know how to get involved.
If someone that you knew said that you could pay $1000 less in taxes next year if you looked through a list of families that needed help and wrote a check to them for $1000, how many people do yo think would refuse?
Do you think that they would spend more than 30 seconds randomly looking through the list for the person they will be helping?
The government largely only cares about that family in terms of employment and re-election. They are nothing but a number in a database somewhere. Most people don't even know the level of suffering some people right here in the good ol USA go through on a daily basis. The more money that one has, the more insulated from that reality they are. This will provide a window at least.
This illustration does not exactly follow the original concept, but hopefully you get the idea of an individual vs govt.
>What you're suggesting is simply a new form of government. It might be great; it could perhaps work. But it's certainly not something to suggest offhand. Our current form(s) of government is a result of centuries (and millennia) of gradual, and sometimes revolutionary, progress. I wouldn't just throw it out the window.
Where on earth did you get "new form of government" and "revolution" from? I am merely suggesting that social services be reformed heavily. This is certainly something that could be evaluated on a small scale (state level perhaps). I do realize that while the concept is simple, the implementation would be far more complex.
Everyone here keeps coming up with all these wild reasons of why this is a bad idea. Funny thing is, almost all their reasons (such as corruption, fraud, ETC.) already exist in the system today. I am not saying that there would not be any regulations, oversight, ETC. I am also not saying that there wold never be abuses. All I am saying is that the government is certainly not the best at getting this type of job done and tax money going to the poor and people not even seeing it happen is dehumanizing us.
>What if you could take the percentage of taxes that you spend every year and choose whom to help with it.
You realise that, especially where I live, one can make tax deductible donations to a wide variety of organisations? I give away thousands and get to write off much of the tax. In fact, I give away a few thousand and can technically qualify for a different tax bracket, I believe.
>We would have charities all over the place competing for this money, competition would produce far better results than the abysmal record of the state/federal social services.
No, you would have charities spending this money on advertising and gimmicks to get their share of your dollar. Some charities today spend large proportions of their budgets advertising and engaging in lawsuits (e.g. Susan B Komen)
What the government does is use it's uniquely large scale to help people. Education, healthcare, housing, welfare - for many countries in the world, having the government provide these services results in an relatively efficient system. I for one would rather pay the Medicare Levy in Australia than pay for private healthcare in the US - last time I was living there, the US system left me about $1500 worse off, and that was a year without any medical mishaps.
>You realise that, especially where I live, one can make tax deductible donations to a wide variety of organisations? I give away thousands and get to write off much of the tax. In fact, I give away a few thousand and can technically qualify for a different tax bracket, I believe.
But most people doing this are still experiencing a net negative. You might donate $1000 to save $200 off your taxes. This is a rather small incentive.
>No, you would have charities spending this money on advertising and gimmicks to get their share of your dollar. Some charities today spend large proportions of their budgets advertising and engaging in lawsuits (e.g. Susan B Komen)
Fine, but these organizations would not last. People want results, not more/better commercials. Did you not read my whole post? I mentioned that these orgs would be performance analyzed and all the data published. All their financial records would be public.
>What the government does is use it's uniquely large scale to help people. Education, healthcare, housing, welfare - for many countries in the world, having the government provide these services results in an relatively efficient system. I for one would rather pay the Medicare Levy in Australia than pay for private healthcare in the US - last time I was living there, the US system left me about $1500 worse off, and that was a year without any medical mishaps.
It is far from efficient, even if it was - the greatest benefit would be humanizing citizens (this would naturally branch into and benefit many other facets of society). Also I am talking about welfare/social services here, not medical services.
Sounds like a recipe for even worse corruption. Pay into your friend's charity, have your friend pay into your charity. Make a deal with a homeless person that if you get back half of what you give them you'll give them a lot of money. You can continue on your own.
Not to mention taking advantage of the deduction by "volunteering" at your friend's charity in some kind of fuzzily-defined "advisory" role, probably by attending a series of "thought camps" with your friend at his villa in The Bahamas or chalet in Klosters.
>Sounds like a recipe for even worse corruption. Pay into your friend's charity, have your friend pay into your charity.
I never said that there would be no rules or regulations. If fact, I mentioned that the government would be needed for this purpose. I don't claim that there would be no abuses, but I can't see how it could possibly be as riddled with abuse as our current system. I think with the taxpaying citizens personally involved, they will demand a high level of adherence and enforcement. They will also feel a greater sense of personal violation when someone they know abuses the system. I know several people who claim that they know so and so who are collecting welfare and making all kinds of money under the table. If they feel a personal with that money and that system, they are more likely to report that person or at least discourage them. Likewise, the fraudster is going to feel more pressure by the whole movement to avoid committing the abuse.
> What if you could take the percentage of taxes that you spend every year and choose whom to help with it.
Then it would be spent on pet shelters and the national trust instead of homeless shelters and the national health, because middle class people fundamentally don't like poor people, and are mildly frustrated taxes go to them at all, except as a means to clear the streets of nuisance beggars.
Photogenically poor people in exotic places we can feel superior to are different, of course. Those, the middle classes will tithe to, provided it goes to "schools and infrastructure" to civilize them up.
Excuse me, but where does this generalization about the middle class come from?
Maybe they just want to do their part in a more effective way than having it stolen out of their income, then whittled down to a few percent, which is then distributed in obtuse ways which ruin the market forces which once made these people's lives easier year-over-year.
Did I not mention that there would be rules/laws involved? You may say that those with lots of money can get those laws bent in their favor, and generally this is true with the government. The people of America today are so uninvolved and uninformed that this happens without repercussions.
With this system, people are going to be watching things a bit closer. They are personally vested in this whole process.
> Here is a wild concept, mandate that people take care of people. Use the government only to enforce this.
> [...]
> That is something that no government could ever accomplish.
I think there is an inconsistency in your argument. You've just suggested a mode of action by government, not something government cannot do.
As to the particular mechanism, however, it is unlikely to work. The basic idea...
> We would have charities all over the place competing for this money, competition would produce far better results than the abysmal record of the state/federal social services.
...is fundamentally flawed. The theoretical efficiency of competitive markets is intimately tied to the assumption that both the benefits and costs are known to and born by the participants in the decision making processes, aligning rational self-interest with efficient decision making. In the charities competing for money from givers to provide services to those in need, the features which make markets theoretically efficient do not apply.
> All we ever see from the media is bad news. We never see lives being turned around from welfare or other social services.
That's because bad news is good for selling media (the perception that the world is a dangerous place and you need to keep consuming the media source from which you got that impression to know where the next imminent danger is very useful to holding an audience, independently of any connection it has to real circumstances), not because lives aren't turned around by welfare and other social services.
>I think there is an inconsistency in your argument. You've just suggested a mode of action by government, not something government cannot do.
You have a logical point but I think everyone understood what I was saying just fine - so your point does not apply to the reality and context of the situation. Some might say you are "trolling" myself, I think that you are just very anal.
>...is fundamentally flawed. The theoretical efficiency of competitive markets is intimately tied to the assumption that both the benefits and costs are known to and born by the participants in the decision making processes, aligning rational self-interest with efficient decision making. In the charities competing for money from givers to provide services to those in need, the features which make markets theoretically efficient do not apply.
Your argument may again carry weight by logical reasoning, but that is your fallacy. The competition would be maintained by the citizens emotional and humane (these are not logical things) drive to see the money coming out of their pocket actually directly and effectively help someone in a meaningful and lasting manner. That is what the competition is all about.
>That's because bad news is good for selling media (the perception that the world is a dangerous place and you need to keep consuming the media source from which you got that impression to know where the next imminent danger is very useful to holding an audience, independently of any connection it has to real circumstances), not because lives aren't turned around by welfare and other social services.
You missed my point. I was merely stating this example because the majority of people never see any tax dollars taken from their paycheck helping a fellow citizen. They never see any emotional or inspiring linked good come of it. The majority see what is in their local community and what is on the news. They have no natural connection to the needy. This is a very bad thing IMO.
>What if you could take the percentage of taxes that you spend every year and choose whom to help with it.
Kinda like just spending your own bloody money.
The great thing about this alternative is that 100% of it goes where you want it, rather than the low tens of percentiles.
P.S. "ala the grinch" doesn't really make sense, it should be "a la grinch" since la handles the "the".
Charities existed, in robust force, for a long time before the government stepped in and confiscated so much money from people they didn't have much left to care for others as they saw fit. We had charities all over the place competing for this money, and did produce far better results than the abysmal record of the state/federal social services, until the government stepped in and made it terribly difficult to provide such charity - on the grounds of closing the inevitable gaps which government still fails to close (and never will). The competition to provide charity is being destroyed by a government regulating competitors out of existence.
I leverage an opportunity to provide food to the poor. It's amazing how many places can't take bushels of bread for distribution thereto because of governmental regulations. In requiring better donations (vanishingly small improvements at prohibitive cost), nothing gets donated and the food all too often gets trashed.
Just change tax code to allow 1-1 deduction of charitable donations from tax liability (instead of taxable income), without limit, along with relaxing burdensome regulations on charities (realizing that something done poorly is better than nothing, and requiring something better leads to nothing).
Gubbamint is keeping the hungry from these bushels of bread not fit for human consumption, why can't they see the harm they're doing? Isn't bad food better than nothing?
>realizing that something done poorly is better than nothing and requiring something better leads to nothing
Oh my god you actually typed it.
Or we can adequately fund our social programs so that they are held to a certain standard and don't depend on the whims of the middle and upper classes.
I would think one day even those like you would realize... Money is rarely the answer. Same with our prison and criminal justice systems, education, ETC.
Spending has ramped up dramatically in these areas and yet the results are either not improved or worse...
What would you consider "adequately funding" our social programs.
More government(especially federal) is not the answer. Your type is always saying, just a bit more, just a bit bigger, even when things get even worse you think a bigger government can fix it.
How blind you are not to see that the government often caused the problem to begin with.
I'm not sure that mandatory required charity is anything more than asking for trouble. People should give, people should help, but they should do it willingly. If you force them to do it, they will resent both the charity and you. That is a scenario that offers short term benefits at best.
>'m not sure that mandatory required charity is anything more than asking for trouble. People should give, people should help, but they should do it willingly. If you force them to do it, they will resent both the charity and you. That is a scenario that offers short term benefits at best.
Every study on the subject has consistently found that giving creates a sense of happiness and fulfillment. These feelings more often than not encourage the givers to give more, to encourage others to give and to also give their time and efforts (not just money) to help others. It increases their humanity.
Why would people giving to someone of their choice (the receivers are of course qualified recipients) and seeing the good it does that person VS the government taking the money out of your pocket, wasting half of it and spending the other half on programs that under perform cause more trouble?
I may very well be wrong here, but I don't think someone with your opinion has ever given directly to a needy person...
>Every study on the subject has consistently found that giving creates a sense of happiness and fulfillment.
Willful giving. You cannot force charity, people will resent it as they will resent anything else you force them to do. As others have suggested, it will become nothing more an exercise in tax dodging in the best case scenario.
>I may very well be wrong here, but I don't think someone with your opinion has ever given directly to a needy person...
I've had similar thoughts on social security. It would make a lot of sense to simply require citizens to save or invest a certain portion of their annual income.
You could have enforced diversification (certain percentages allowed for high vs. low risk), and accreditation boards to vet and approve mutual and index funds.
Also, the investment would have a very stimulative effect on the economy, and you could probably also set it up in such a way that it works on autopilot (like a 401(k)) for those that can't be bothered..
It would be quite a bit less draconian than the government simply confiscating the money. In the private sector, the current setup would rightly be called a ponzi scheme.
> It would make a lot of sense to simply require citizens to save or invest a certain portion of their annual income.
Not to serve the purpose of social security, which is to serve as a minimal fallback defined benefit pension to to mitigate the effects of old-age poverty in the event that personal retirement savings fail due to investment risk (either by failure of personal investment, failure of private pensions, etc.)
It would be a nice public subsidy to the financial services industry, which is why that industry and their political proxies keep recommending this, but it wouldn't actually serve the purpose social security is designed to serve.
> It would be quite a bit less draconian than the government simply confiscating the money.
Not really; either way the government is seizing the money and directing its use.
No, I'm saying individuals would invest in lieu of social security. Those low earners are already losing part of their income to social security.
There would obviously have to be a transitionary period where the government makes up the shortfall, in order to honor the commitments made to retirees. It would be painful, but only a small addition to the 87 Trillion in current liabilities of the U.S. government.
But the curve that determines your payout is dramatically tilted towards low earners: That is, SS pays a much larger fraction of your highest earning years income if that income was low. As a result, low earners have to live only a few years past 65 to receive benefits greater than what they put in. High earners have to live decades.
> Everyone who gets a paycheck pays their 6% in social security, regardless of income level.
Social security tax is 12.4% on the first $113,700 of wages or self-employment income, and 0% on income from all other sources and wages and self-employment income past the first $113,700, so, no, you don't pay "6% in social security, regardless of income level".
(Note that on wages, but not self-employment income for obvious reasons, half of the 12.4% is paid as 'employer share', so that the employee never sees it, so it might appear, if you look only at wage withholding, that the rate is 6% -- or rather, 6.2% -- but that's not accurate.)
> The government is full of corruption and waste, they are innefective in matters that require an actual soul.
Something totally unheard of in charities or churches for that matter?
> What if you could take the percentage of taxes that you spend every year and choose whom to help with it.
I cannot see how this would not lead to a very disproportional distribution of welfare. Very few people, I guess, would rather give their money to rehabilitated murderers or sex offenders than to orphans or abused women for example.
>Something totally unheard of in charities or churches for that matter?
The difference here is that charities can easily be replaced or you can choose a different one. There would definitely be oversight to expose problems and shut down fraudsters.
>I cannot see how this would not lead to a very disproportional distribution of welfare. Very few people, I guess, would rather give their money to rehabilitated murderers or sex offenders than to orphans or abused women for example.
You would be surprised. Sure those like you would give it to orphans and widows. Also, charities generally don't "turn down" people because they just got out of jail. If fact, I suppose that it could be mandated that they don't.
There are easy common sense rules for all these types of concerns.
> Also, charities generally don't "turn down" people because they just got out of jail.
No, but there are many charities that serve a very specific purpose. And I would bet that there are far more who are involved in work with children than with convicts. Actually I know there are (I have my own limited experience in this specific area), but more to this later.
> Sure those like you would give it to orphans and widows.
I would be very surprised if "those like me" would not turn out to be in the vast majority. By the way, I picked rehabilitated criminals for a reason. During and for a while after university, I was living in a self sustained formerly occupied house and we has decided to reserve one floor for former prisoners to offer an easier start back into a regular life outside of social housing. Yet over the years due to people moving out and new people moving in and lost romantic ideas (who could have guessed that most people serving long time sentences are not highly educated and politically left-leaning) of how this living together would work, a majority of the house voted the former convicts out. Some of us tried to help to set up an alternative and work together with local welfare organizations or churches, but again they either lacked funding or met resistance of their members (mainly on the side of the churches). This experience let me to doubt your plans.
But something I would really love to see, and something you might probably be able to agree on too, would be some kind of mandatory community service. Maybe one or two weeks per year in an area of choice. I think that could result in more compassion and social cohesion than "just" giving money.
mandate that people take care of people. Use the government only to enforce this.
That sounds far more difficult, subject to corruption, and less efficient than having the government care for other people directly. Sure, having everybody be good to each other could be much more efficient than government aid, but having the government mandate and define "good to each other" is so very difficult.
I encourage you to become more familiar with the IRS and the Dept of Welfare and Social Services, the cost they ensue, and the level of fraud/corruption/waste.
I also encourage you to personally meed and observe those being served by WSS, see the ineffectiveness and vicious cycle these people are trapped in.
With the possible exception of some sort of enforcement, I think you may have just described what I always hoped churches(1) would be to their communities. So few seem to care for much more than a bigger parking lot and a taller... whatever the hell they build on the front of those things these days.
I'd agree, if each person had equal percentage of control over that tax money. So, Larry Ellison would have as much to allocate as a homeless person. (Otherwise, allocation decisions concentrated in hands of those already with more power over those decisions.)
Because that's what we need: to incentivize reproduction.
Because we don't have enough people destroying the planet as fast as they possibly can with their arrogant, self-indulgent, human-centric, bullshit belief systems.
I'll say it once more: you are not the special darlings of a doting white god, you arrogant assholes, you are just another animal in a chaotic universe.
This planet was not put here for you to do whatever you want with it, and you are going to discover that shortly if you don't smarten up and realize the obscene waste and destruction you are perpetrating.
You are, collectively, so fucking stupid that you cannot even grok the simple concept, "don't shit where you eat". Fuckers.
Your apparent misanthropy aside, every study I've ever heard of links increased wealth, health and prosperity with declining birth rates.
By improving the lot of these women, you decrease their need to have large numbers of children (to work for them), you increase their education (so they understand why large numbers of children are unnecessary) and you also put power into the hands of the women rather than the men (so that they have a choice).
