Is welfare theft from workers? (support for James E)

Uh... I just realised that some people here actually think that destroying welfare would give them more money. Took me two reads of the thread, but I really think some folks believe that. If you stop welfare, you won't get one more cent... Stop welfare, save say 10% of your taxes, well and your salary, your income or whatever else you get will go down by 10%... No net win.

cheers

Helge
 
Economics :) That's how I figure. It is a rather simple system:

The moment you take away the welfare, you take away funds from the welfare receivers. Now, what did these welfare receivers do with those funds before you took them away? They bought stuff. All kinds of stuff. Where does that stuff come from? The stuff is the product, the service, etc of the working population. Thus, by taking away the welfare, you take away the funds of millions of people, these people do not spend that money anymore (since they don't have it anymore) and thus the industry and the private sector gets less products (or services) sold, thus they make less money, thus they pay you less money.

The ONLY way you could actually get your welfare tax money BACK would be if the current welfare people take the welfare and hide it somewhere. But nobody does that. In fact, welfare people are a big driving force for economy, since they are one of the few groups that actually spend all they have. Most people with higher income tend to put money aside (and then, and only then, it is lost from the economical circle).

Cutting welfare won't make anybody richer. It will just make a few people suffer even more.

Actually getting more money out of a system is quite a challenge (and trust me: "just cut XXX" is NEVER a good move). Huge groups of economist worry about these things all day long. Our complex economy is a field we do not really understand fully, but one thing is for sure: The more money circulates, the richer the system.

cheers

Helge
 
How about this:

We cut welfare altogether and return it's administration to the private sector.

People who can no longer recieve welfare because their "need" has past now find that they need to work unless they want to starve.

(It's amazing how well connected the backbone is to the stomache)

They are now spending the money that they earn back into the economy.

There most likely would be a "hicup" (short-term effects) in the economy due to such a change, but it would stablize over time and become stronger because the "leeches", for the most part, would be weeded out and would be contributing to the economy (long-term effects).



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John/az
"When freedom is at stake, your silence is not golden, it's yellow..." RKBA!
www.cphv.com
 
Sorry Helge, but while it is true that "most people with higher income tend to put money aside," it is certainly not "lost" to the economy. Do you think that these higher income people stuff mattresses with their extra cash? Who do you think invests in the stock market through IRAs, 401k's, Mutual Funds, etc? Certainly not folks on welfare. This "put aside" money isn't lost from the economy, it drives the economy.


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RKBA!
"The people have the right to bear arms for their defense and security"
Ohio Constitution, Article I, Section 4
Concealed Carry is illegal in Ohio.
Except for Hamilton County until August 11th.
Ohioans for Concealed Carry Website
 
<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by ICBentley:
HelgeS

How you figure?[/quote]

HelgeS is right about the economics of it all, but it will take coercion out of the equation. That means the interested parties (charity minded folks and the ones who need it) will get together without gov't interference. Much better system, and probably more efficient.
 
<BLOCKQUOTE><font size="1" face="Verdana, Arial">quote:</font><HR>Originally posted by HelgeS:
Economics :) That's how I figure. It is a rather simple system:

The moment you take away the welfare, you take away funds from the welfare receivers. Now, what did these welfare receivers do with those funds before you took them away? They bought stuff. All kinds of stuff. Where does that stuff come from? The stuff is the product, the service, etc of the working population. Thus, by taking away the welfare, you take away the funds of millions of people, these people do not spend that money anymore (since they don't have it anymore) and thus the industry and the private sector gets less products (or services) sold, thus they make less money, thus they pay you less money.

The ONLY way you could actually get your welfare tax money BACK would be if the current welfare people take the welfare and hide it somewhere. But nobody does that. In fact, welfare people are a big driving force for economy, since they are one of the few groups that actually spend all they have. Most people with higher income tend to put money aside (and then, and only then, it is lost from the economical circle).

Cutting welfare won't make anybody richer. It will just make a few people suffer even more.

Actually getting more money out of a system is quite a challenge (and trust me: "just cut XXX" is NEVER a good move). Huge groups of economist worry about these things all day long. Our complex economy is a field we do not really understand fully, but one thing is for sure: The more money circulates, the richer the system.

cheers

Helge[/quote]

Sounds to me like you're assuming there is a fixed money supply. Just not true.
 
HelgeS,

Are you just kidding us? As an economist I can tell you that your argument is completely insane, as well as inane.

First on the distribution issue. Money taken from me and distributed to those that don't work will inevitably make me poorer. The tax bite alone is enough to reduce my wealth even if every cent I paid was returned by welfare recipients to a business I owned(highly unlikely).

Second, paying people not to work doesn't make society wealthier. When you punish(tax) people for working and reward(welfare) those who don't, you punish productivity, which is the only reason wealth is produced in the first place. This impoverishes society.
 
A bone to the dog is not charity. Charity is the bone shared with the dog, when you are just as hungry as the dog. -- Jack London.
 
Helge's argument fails to consider what will happen to those currently on welfare if it is irradicated. In his scenario, they drop off the planet. Considering they would need to find a job if they enjoy eating, they would be earning some money. Now their money as well as mine is returning to the economy. In addition, this influx of cheap labor would lower the cost of manufacture for products (not that the idea of a $0.50 BigMac would improve ANYONE'S quality of life).

There are many other points that are not considered as well...

If you look at how much money goes into government for welfare and how much makes it into the hands of those who need it, you'll wonder where 80% of it got lost along the way. That 80% is going to government employees or contractors who are no worse off then you or I, and it is no more likely to be spent on goods and services than if we kept it in the first place. So even if Helge is correct, and we drop 10% off welfare, we should only see a 2% drop in the economy while we all receive 8% raises.

If you take a strict look at welfare (include social security, medicare, school funding, daycare, etc) you'll see that this composes at least 60% of all of our taxes. That's a 48% raise with a 12% drop in the economy. And that's only true if every penny that we recoup in tax savings just disappears into a non-interest bearing account AND all the previous welfare recipients are shipped to Uraguay, and that's simply not true.

[This message has been edited by Mikul (edited July 25, 2000).]
 
Valdez, you are an economist? I hope you don't work in a govermential advisor position...

There IS a fixed amount of value on this planet (we haven't reached the limit yet though). Those are our resources. But that's another issue.

Yes, money taken to you and then given to others will make you initially poorer. That's correct. Yet, not giving that money to those people (who are your customers) will not result in you getting more money. Say we have a society of 100 people. 50 work. The other 50$ don't work and get welfare. Welfare is 5$ a year. Each member of the society spends 5$ per year in stuff produced by the working group. What they have left they invest in dead capital (Blueman: with dead capital I don't mean stock options and the like, you are correct, that stuff works. I mean stuff like buying an old house... that is what most middle class people do and that is essentially dead capital (at least not working apart from a few dollars here and there for maintenance)). So, we have 100 people spending 5$ each, that's 500$ spend a year. Assuming all working people get an equal charge from that's 10$ per working person per year as income. 5$ of that is taken away by the government and distributed as welfare (since the ratio if 1:1 from worker:welfare receiver)

So, the working people get 5$ a year, the welfare people get 5$ a year. Now you take away welfare. Basically the 50 welfare folks now either die or work as well (if they can). Say half of them dies (the old, the sick, the helpless, the pregnant, etc etc), the other half can somehow find work. Still, everybody spends 5$ a year. So now, we have 75*5=375$ spend by society per year. But we also have 75 people working. Assuming for simplicity an equal income again we get 375/75=5$ income for all members of society. The result is that the welfare people now work and still get the same amount of money. The working folks also still get the same amount of money, just that half of them is dead and the other half works now.

Big improvement....

The only way to attack this very simple economical principle is by postulating that the now working 25 ex welfare receivers somehow generate more money thru their labour. But every economist will tell you that that is not the case in the overall scheme. Generation of money is essentially limited by the principle of supply and demand. Yes, you now have 25 more labouring people, but you don't have any more consumers. Thus, you produce a lot more but because the number of clients stayed the same you will simply need to sell it cheaper or not sell it at all.
If this would not be the case, then big companies would just build factory after factory, enlarging the producting all the time. They don't do that, because it is pointless, in fact, it is harmful.

cheers

Helge
 
What a load of crap, HELGEs.

We create value. People who write literature, movies, video games create value. Someone who waits on me at a restaurant has created value. Guy who invented the paperclip created value.


Geeze, where are the TFL objectivists now? I guess they hang out on Gen discussion mostly - you have to sneak these posts in on L&P where noone will shoot it down.


Battler.
 
Parasites live off parasites live off parasites live off parasites

Socialism seems to work if you don't think about it too hard.


Battler.
 
HelgeS,

I suggest you read "The Richest Man in Babylon" by George Clason.

Fixed worldly wealth is poverty mentality at its "finest" and it only reinforces forced "redistribution" which is socialism masking as voluntary charity.

As Battler said, "We create value."

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John/az
"When freedom is at stake, your silence is not golden, it's yellow..." RKBA!
www.cphv.com
 
You have ten people and no food. Five people collect two food units while the other five sit around catching rays and taking the food from the five who are working. The working five stop sharing. Three of the lazy weasels die off, and the other two collect food. Now there are 14 food units instead of 10 and each person gets 2 instead of 1. Even if you make this a fixed food economy, everybody still makes out.

How is this different from Helge's scenario? It isn't. Neither one has much relation to how the US welfare system and economy are run.

BTW Helge, when you said you'd keep the income equal in your scenario, you actually cut it in half.

[This message has been edited by Mikul (edited July 25, 2000).]
 
Gee Helge, taking 50% of my money and giving it to someone that won't work makes me richer ? Helge, even if they come back into my store and buy something from me with it I have still lost the product they bought because they bought it with my money. Lets look at it hypothetically: We'll say I'm a crack dealer because crack and welfare are both addictive, Now sitting on my skreet corner I see the real slim shady come up and I give him a fifty dollar bill, real slim sahdy then buys a fifty dollar crack rock. Now before I saw slim I had 100 dollars cash and 100 dollars crack. After I saw slim I had 100 dollars cash and 50 dollars crack, do you think I'll be able to come up in da hood like this Helge ?
 
Well said, Scud.

There is always more stuff to get (food if nothing else), and you don't get it without work.
 
105K. If you must, "Welfare: Threat or Menace?" may be continued in Part II.

:rolleyes:

Whoops, forgot I was in Legal. Dave?

[This message has been edited by Coinneach (edited July 25, 2000).]
 
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