On Fri, 30 Jun 2000, you wrote:
> At 05:23 PM 29/06/00 -0700, James wrote:
>
> >you need to start with an
> >enormous positive cash balance to make the system economically viable; a
> >Ponzi scheme would quickly collapse and the taxation required would
> >destroy the economy.
>
> I find this hard to belive. After all, you already pointed out that
> providing the net direct to the poor would halve the current costs.
I am referring to long-term stability and solvency. The current U.S.
system is stable because the payout is sufficiently low that
relatively few people become habituated to it. This is a separate issue
from the phenomenal waste that occurs in doing so. At some threshold (and
I am quite sure the poverty line is above that threshold), the system will
de-stabilize economically, because the cost-benefit ratio will favor
leeching for all but the people who actually enjoy working. Actually, I
think the people that truly enjoy working (a fair percentage of most
populations) pretty much carry socialist systems as a consequence of their
nature. A system needs to be unattractive to people who would otherwise
be productive members of a market economy. The moment productive members
of society start becoming part of the welfare roles, a runaway feedback
loop will happen that will eventually collapse the system over the long
run.
Incidentally, I lived well below the U.S. poverty line for two-thirds of
my life. The only "welfare" we ever received was some Food aid during the
really bad times when I was a kid. Fact is, a lot of people lead
comfortable, happy lives at incomes below the "poverty line". People who
don't do well economically at any level are typically the ones that make
poor choices, not ones who receive less than some arbitrary amount of
money.
> >how would differences in cost of living
> >be accounted for? The poverty line in the greater Silicon Valley area
> >would put one in the upper middle class in North Dakota.
>
> How does it work with aged pensions now? Everyone gets the same, no? With
> this minimal security, people might well up-sticks and move somewhere
> cheaper. The hope is that sufficient of them will use this stake/security
> to start some productive enterprise or fund their education, not just kick
> back. And then this added wealth will be cropped to help support the
> process.
The problem is that fixed income individuals who aren't working have
different economic goals than people who do work. In fact, you can see
this pattern in the U.S. when you look at where people go to retire versus
where people go for jobs.
People who are retiring typically look (on paper) a lot like a Minimum
Income welfare recipient. Therefore, people who retire attempt to
maximize their income by re-locating from where they lived to work, to a
locale that is better suited to a small, fixed income. In the U.S., these
are typically states with no taxes, very cheap cost of living, decent
lifestyle, and good weather. As the percentage of retired people in the
U.S. explodes, you are seeing the populations of states such as Nevada and
Florida explode as well. Unfortunately, all the prime locales for fixed
income living are also some of the poorer areas for finding good jobs.
The consequence of strong employment opportunities and a strong local
economy is that cost of living tends to go up as well. Supply and demand.
A person on a Minimum Income in Las Vegas, Nevada would live a comfortable
life *and* be in an environment that offers mediocre employment
opportunities. Situations like these pretty much ensure problems. I
wouldn't want to encourage people to live in areas that also don't offer
reasonable opportunities for productivity.
> But you might be right. And so might I. More probably there's a better way
> neither of us have thought of. And the Spike will make it all redundant in
> 50 years or so anyway. But meanwhile, I'm happy to `buy the bastards off',
> if one insists on seeing it that way -- while keeping the ill effects
> contained by suitable security measures as are required, and by social
> engineering if that's possible.
I don't really care about the leeches one way or the other. I am more
concerned that the solution to the leech problem may induce otherwise
productive individuals to also become leeches. How much money does it
take to buy off a leech so that they don't cause trouble? A fair amount
I'd imagine. Also, many of the leeches tend to have behavioral issues
that are the real problem anyway, and which are unlikely to go away simply
by giving them money. Rodney King the millionaire is still getting
regularly arrested for the same stuff that got him arrested before his
famous incident with the police.
-James Rogers
jamesr@best.com
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