Looking around the electoral promises today we see two major calls. One, that we’ve all got to pay much more into the welfare state we’ve got. The promises made about the NHS, pensions, supporting the poor, require more money. Well, OK. We also see that we’re being implored to have more welfare state. We should have state paid care for every elderly. We’ve got to massively increase the amount of redistribution to ensure that no child grows up in a household on less than 60% of median income – that’s what child poverty is these days.…See More
It’s difficult to work out what the actual complaint here is:
Killers, kidnappers and other violent offenders are claiming thousands of pounds in state benefits if they are held in secure hospitals rather than prisons, The Telegraph can disclose. Ministry of Justice figures show 2,978 offenders classed as potentially dangerous are eligible for benefits after being ordered by the courts to receive treatment in a secure psychiatric hospital for an “indefinite” period. Hundreds are known to be claiming taxpayer support.
Another reminder of the sad and basic fact that we cannot afford the welfare state that we’ve already promised ourselves. The ageing of the population through that demographic shift means that all the things we gleefully voted for decades back, and didn’t pay for, now do have to be paid for. And as it turns out we’re not paying enough in tax for those things we did vote for.
The implication of this should be obvious.…See More
This is one of the very terrors of the modern age apparently – that Donald Trump’s Administration is considering changing the details of an inflation calculation. This will mean that, over time, the poverty line rises less swiftly. That, in turn, will mean a lowering of the amount that people can gain in welfare benefits – assuming their income is static that is. This is terrible, awful, apart from actually being the correct decision to be making that is.…See More
A standard point made by free market types like us around here is that the welfare state isn’t, in the long term, affordable. A standard point made by those to the left of us – most that is – is that there should be more welfare state. There’s a conflict between these views, we can’t afford what we’ve already promised ourselves and yet we must have more such promises.
It’s us who are correct of course.…See More
No, this isn’t Milton Friedman’s point that you can have free immigration or a welfare state but not both. Rather, that the willingness to pay for redistributon and state safety nets depends rather on a communal feeling. Large scale immigration reduces that communal feeling and thus the willingness to pay for a large welfare state.
Immigration and preferences for redistribution in Europe
Alberto Alesina, Elie Murard, Hillel Rapoport 08 April 2019
A large literature shows that generosity, both public and private, is more freely extended within the same group rather than across groups.…See More
If only Bernie Sanders understood even the merest hint of economics. But then, obviously enough, if Bernie Sanders understood any economics then he’d not be Bernie Sanders, would he? His latest idea is that American companies should be fined, or at least taxed more, if they hire low income workers. A casual thought or two about this would tell us that this isn’t likely to have a good outcome for low income workers but Bernie is proposing it all the same.…See More
As far as our best bet goes – this is from the Diamond and Saez paper – the peak of the Laffer Curve in the US economy is some 54% for taxes upon income. It’s higher, up at 75 to 80 % if there are no “allowances.” That ability to dodge tax through renaming income, reclassifying, or even just getting the hell out of Dodge by leaving the country. That means our own such peak is a little lower, as we can get out of the UK tax system just by changing residency, something not available to Americans.…See More
Some social and political analysts regard private help as a bad thing. They speak of the “problem” of food banks, and of America’s “miserly” support for poorer countries. In fact food banks are a solution, not a problem. Private generosity has leapt into the breach to help tide people over temporary problems. The great majority of food bank users do so only once.
Similarly with US aid to poorer countries. The United States is regularly berated for being very low on the list of aid givers, but this only applies to government-to-government aid.…See More