The Welfare State

Zardnaar

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The great right vs left debate at CFC. Most of the time it seems that you're a communist or sell your grandmother for a buck neo nazi or something.

In general I believe in capitalism. No its not perfect and yes someone is going to probably get exploited somewhere but so be it. Leaving everything up to the free market however is a big mistake. The free market isn't good or evil but is totally amoral. Some services will never make money but are still required so the government or local council will need to fund them- firemen, police, the military etc.

You are also going to need some level of the welfare state. Historically countries almost never have full employment. The few rare exceptions include Nazi Germany and the USSR which both had massive and unsustainable levels of government spending, or the 50's in the aftermath of WW2 when millions died and europe needed rebuilding. New Zealand had less than 100 people unemployed while the USA didn't have to compete with China, Japan, Germany or Europe in general.

I live in a welfare state. The stereotype of the welfare quuen more or less doesn't exist. I have only meet one person who had basically said they don't want to work and want to raise a family on welfare. Alot more commen are women who don't care if they get pregnant due to the welfare state- the more kids you have the more $$$ you get.

We also have "free" healthcare paid for by taxes and you can go private if you want and health insurance isn't that expensive. Tax is high by american standards, low buy europe standards. Corporate taxe tops out at 33% IIRC while personal tax is around 17-39% although a right wing government has cut that to 33% which takes effect soon- a left wing government put it up from 33%-39%. A government service tax (GST)of 12.5% (rising to 15%) exists on all goods and services sold.

We have universal welfare- if you're over 18 you can get it automatically and for as long as you need it. I personally know people who have been on it for over 20-30 years. In some cases however you can get more on welfare than by working espicially if you have a large family. Its also not to hard to claim he DPB benefit while having a "border" who is actually your de facto partner. Other couples have "separated" and have split the family apart as 2 benefits pay more than a parent working and a parent staying at home in alot of cases (depending on income).

Most people I know who have been on welfare rip the system off to some extent. I don't mind if its in a minor way get an extra $20-$50 a week to survive on by babysitting or whatever but some live reasonably good lifestyles beyond what they could support by actually working. Selling pot is another great pocket money earner as you have the available time and guranteed income to do it.

In any event though the system isn't sustainable. Every political party knows this, but in order to win an election they tend to bribe the electorate usually by tax cuts (right) or increased social spending usually targeted at various groups (minorities, low and middle income earners-left). The problem is of course the demographs. New Zealand has an aging population and you get the pension at the age of 65 and the government has to support an old person for 20 odd years maybe more and pay the health costs as well. Putting up taxes only goes so far as a large number of skilled NZer's already leave the country and go overseas which offer higher wages and less tax. There is more or less a permanent shortage of health workers and teachers. They cut the top tax in the 80's from 66% to 33% and the tax intake actually went up.

In the 70's they brought in the domestic purposes benefit (DPB) the intent was to allow women in abusive relationships to leave the husband and support the children. They assumed about 4000 women would require it. However they didn't restrict it to married women only. Before the DPB was brought in NZ had about 3000 adoptions per year. 35 years later we know have around 100 000 people permanently on the DPB which has actually magnified the problem and created a permanent underclass here. In less than 40 years some of those familes are onto their 3rd generation of welfare dependency. If you have 1 child every 5 years and end up with 3 children you can collect welfare for 33 years. Welfare queens as such don't exist but there is actually financial incentive to have more children. The worst poor families have the extra kids but spend the extra $$$ on booze, drugs and tobacco. NZ has some of the worst child abuse statistics in the world. If you're rascist and leave out certain ethnic groups it is comparable to Europe though. You can get more ont he DPB than by working a oow income job and don't have to worry about paying for transport or childcare. The road to hell is paved with good intentions.

A simialr deal also exists with sickness benefits and invalids benefits. You can get one ofr having depression. Apparently the amount of people here requiring them made NZ statistics look worse than a warzone. When unemployment fell below 4% the numbers on these benefits almost double IIRC. Creative book keeping on the governments behalf. I'm on welfare and I'm depressed- here have a sickness benefit (pays more) and you're no longer counted as unemployed. Genius:rolleyes:

When you add it all up around 3rd-4th of the population recieves money from the government with an aging population. The baby boomers are starting to retire now and it is estimated that the social security net will start to collapse in 10-20 years time. From a population of 4 million almost 2 million will require government aid, and 400 000+ live in Australia with tens of thousands more living in the UK. Over 10% of the population mostly highly skilled and/or university educated live overseas.

Basically I think we're screwed long term mostly due to socialism such as it esists here. Old people also vote in the greatest numbers and we have a proportional voting system and they are going to make up the largest voting demograph as well. The systemwill collapse and it doesn't seem to be a question of if but when. The government won't have enough money and they can't stop the brain drain as skilled young NZer's can, and will leave the country and have been doing so for decades. At some point someone, sometime is going to hae to dismantle the welfare state or cut it back drastically as it will essentially collapse and NZ will go the way of Greece.
 
"Free market vs Welfare state" is more "right vs centre" than "right vs left". Socialism is way more comprehensive than that, and even social democracy typically implies a bit more than most Western nations currently entertain. Furthermore, your complaints mostly seem to lie in the management of New Zealand's own welfare state (more specifically it's benefits system, which is only a part of the welfare state), rather than any ideologically or theoretically contention. You're just presenting a string of apparently unrelated screw-ups without giving us a broader complex or anything in the way of analysis.
I'm honestly not sure what you actually propose this thread be about, because there's nothing in the OP except a slightly bitter rant about New Zealand's apparently poorly-managed benefits system.
 
The great right vs left debate at CFC. Most of the time it seems that you're a communist or sell your grandmother for a buck neo nazi or something.

In general I believe in capitalism. No its not perfect and yes someone is going to probably get exploited somewhere but so be it. Leaving everything up to the free market however is a big mistake. The free market isn't good or evil but is totally amoral. Some services will never make money but are still required so the government or local council will need to fund them- firemen, police, the military etc.
Glad to see at least one capitalist around here has actualy read Wealth of Nations.

[didn't comment on some paragraphs as there was nothing to comment on, really just sort of an essay.]


Most people I know who have been on welfare rip the system off to some extent. I don't mind if its in a minor way get an extra $20-$50 a week to survive on by babysitting or whatever but some live reasonably good lifestyles beyond what they could support by actually working. Selling pot is another great pocket money earner as you have the available time and guranteed income to do it.
There will always be some people who activly try to rip off of welfare. Its not justified to completly gut it for the majority because of a minority. Jeremy Bentham and Utilitarianism, greatest good for the greatest number.

In any event though the system isn't sustainable. Every political party knows this, but in order to win an election they tend to bribe the electorate usually by tax cuts (right) or increased social spending usually targeted at various groups (minorities, low and middle income earners-left). The problem is of course the demographs. New Zealand has an aging population and you get the pension at the age of 65 and the government has to support an old person for 20 odd years maybe more and pay the health costs as well. Putting up taxes only goes so far as a large number of skilled NZer's already leave the country and go overseas which offer higher wages and less tax. There is more or less a permanent shortage of health workers and teachers. They cut the top tax in the 80's from 66% to 33% and the tax intake actually went up.
All countries have to confront an aging populance, its nothing specific to a welfare state. In fact, it may actualy be cheaper in a welfare state due to economy of scale and the lack of executives seeking dividents. Goverment workers would recieve the same salary regardless of how large the divident for the government was. While in a purely privatized sector the executives sole interest is how large their divident is.

In the 70's they brought in the domestic purposes benefit (DPB) the intent was to allow women in abusive relationships to leave the husband and support the children. They assumed about 4000 women would require it. However they didn't restrict it to married women only. Before the DPB was brought in NZ had about 3000 adoptions per year. 35 years later we know have around 100 000 people permanently on the DPB which has actually magnified the problem and created a permanent underclass here. In less than 40 years some of those familes are onto their 3rd generation of welfare dependency. If you have 1 child every 5 years and end up with 3 children you can collect welfare for 33 years. Welfare queens as such don't exist but there is actually financial incentive to have more children.
America has its own problems with people using kids to rip off the system. A quick search for the Octomom should prove that. Somehow a single mother on welfare with ~6 kids managed to get a fertility treatment and gave birth to another 8 kids that all required extensive medical treatment due to beeing excessivly premature. The problem could at least be partialy solved by reducing welfare the more kids you have to discourage creation of welfare kids. However, some people wont stop making kids they can't support, so the government would have to support them regardless.
The worst poor families have the extra kids but spend the extra $$$ on booze, drugs and tobacco. NZ has some of the worst child abuse statistics in the world. If you're rascist and leave out certain ethnic groups it is comparable to Europe though. You can get more from the DPB than by working a low income job and don't have to worry about paying for transport or childcare. The road to hell is paved with good intentions.
The welfare kids issue could probably be resolved by changing the way funds are allocated. However I'm not an economist so beyond that I can't really say what to do. However, I thought you said 'welfare queens' didn't really exist in NZ, but here you say some people have alot of kids because it can earn them more money than a typical job for them.

A simialr deal also exists with sickness benefits and invalids benefits. You can get one for having depression. Apparently the amount of people here requiring them made NZ statistics look worse than a warzone. When unemployment fell below 4% the numbers on these benefits almost double IIRC. Creative book keeping on the governments behalf. I'm on welfare and I'm depressed- here have a sickness benefit (pays more) and you're no longer counted as unemployed. Genius:rolleyes:
That part needs to be reworked. I'm not seeing many flaws here that would be better resolved under a non-welfare state and most of the flaws look like it would be possible to fix them with some reform.

When you add it all up around 3rd-4th of the population recieves money from the government with an aging population. The baby boomers are starting to retire now and it is estimated that the social security net will start to collapse in 10-20 years time. From a population of 4 million almost 2 million will require government aid, and 400,000+ live in Australia with tens of thousands more living in the UK. Over 10% of the population mostly highly skilled and/or university educated live overseas.
American social security is going to collapse in less then that, and we have a far higher GDP than New Zealand. But why are you paying for residents living in Austrailia or the UK? I don't know how your tax code works, but that seems odd. Do they still pay NZ taxes? If they do, then I don't really see that big of a problem. You said before than some New Zealanders leave NZ for Austrailia or the UK for a higher wage, so if they are still paying NZ taxes you would be recieving a higher revenue.

Basically I think we're screwed long term mostly due to socialism such as it esists here. Old people also vote in the greatest numbers and we have a proportional voting system and they are going to make up the largest voting demograph as well.
Its the same way in America. Old folks make up a large part of the voting demographic because they have the most at stake; loss of social security and medicare. Never understood why so many of them voted Republican when Republicans seem determine to gut the social security system.
The systemwill collapse and it doesn't seem to be a question of if but when. The government won't have enough money and they can't stop the brain drain as skilled young NZer's can, and will leave the country and have been doing so for decades. At some point someone, sometime is going to hae to dismantle the welfare state or cut it back drastically as it will essentially collapse and NZ will go the way of Greece.
It sort of seems to me that at your GDP and industrialization level, welfare is a bit cost prohibitive as there are too many people recieving welfare to make the system break even. I'm not up to speed with New Zealands economic situation (besides knowing you guys have alot of sheep) so my comments are more generic and based solely on what you provided us. I can't really tell what you want us to debate though. All you really say is that if New Zealand doesn't do something to its welfare program it will go broke. That is pretty common to most industrialized countries right now.
Baby boomers are aging and expected to live longer than ever. Due to globalization many traditional lower to lower-middle class jobs are being shipped overseas putting a greater strain on welfare and decreasing tax revenue. This, coupled with the free-market, libertarian, lower taxes opinion that has been sweeping America (and most other countries I think) is decreasing government revenue at a time when they need more revenue.
Due to the free-market, anti-welfare trend of the right which is gaining power in America, welfare programs are reduced putting more people onto the streets looking for jobs that have all been shipped overseas leading to increased competition for the few remaining non-college degree requiring jobs. More people need a job but can't find it, the government isn't providing as much welfare, poverty increases.

A full on capitalist system wouldn't work as well because of capitalism boom-bust cycle. There are other posters here who are far more qualified to comment on this point than I am.

I really don't see any 'right' path, only bad and less-bad. Welfare states should do better if they can survive the baby boomers due to declining birthrates. Half of this post probably doesn't make much sense because I don't really have anything to argue about. As Traitorfish sort of pointed out, most of your 'failures' of welfare states seems to be more failures of the NZ form. I don't think the UK is having as many problems but I could be mistaken. The paper I get tends to gloss over foreign issues. I really need to watch more BBC World News.
 
The point is the welfare state is unsustainable and here at least actually created itself to some extent. Its mostly the liberals/left here that push it and it feeds on itself. The welfare queen that deliberately gets pregnant doesn't exist as such as the extra $$$ in most cases won't actually pay for the kid (unless the money doesn't reach the kid) but people on the DPB can and do have more children. If you lose your job or get divourced welfare is fine but for some it is a lifestyle across generations.

If you were 18 and no job it was your parents responsability to support you and NZ didn't really have people starving in the streets even in the great depression. The libertarian free market ideal is fatally flawed IMHO and basically leads to corporate welfare. The lack of regulation in the US contributed to the subprime crisis which doesn't really exist here.
 
There is one better example of full employment, the United States during the 1920s during the unusually laissez-faire Harding and Coolidge administrations. This was also after recovering from a world war though.



I say move to geoism (aka geonomics, geo-libertaianism, geo-classical liberalism, etc) and range voting.
 
Funny how systems work differently in different nations. Sounds like New Zealand is going down the drain. I'll tell you an other story though:

Denmark is a social democracy and even the right wing parties want it to stay that way. We're an odd nation, in that we have the highest taxes in the world, but also the highest economic freedom. We don't have to worry so much, because the Government pays our education (Even college), if we get sick or become injured the docter and the hospitals are free, if we lose our jobs we get money from the State and when we grow old we are taken care of.
The reason this system works is that while health care and education is quite good, welfare and government retirement isn't. It's enough to survive, but you will be poor. This means that while no body get's left behind, people don't want to live on the governments expense either.

The system is often called flexicurity, composed of the two words flexibility and security, because the government will help me, should I lose my job, and thus the unions wont demand all kinds of job security. This means that I can get fired real easily if I don't do my job right. I don't need job security, because I have Government security. Basically, this means that workers shift jobs often, and find jobs that they're actually qualified for. No paying for a worker who you'd rather replace with someone else here. As a result, productivity actually increases.

We also have problems with an ageing population, and we might have to change our system a bit, but overall everyone here agrees that while some changes will always have to be done, the very idea behind the system works very well. Our insanely high taxes gives us, and here I really mean "us", not just "me", a high quality of life. Now Im well aware that different system work for different nations, but I would never, ever live in a country without universal health care.
 
Zardnaar said:
In general I believe in capitalism. No its not perfect and yes someone is going to probably get exploited somewhere but so be it.
That's a pretty disgusting viewpoint to have.
 
Scandinanvia countries are often used by the left here as an example. They ignore one important factor of geography. Scandinavia has the european market to trade with. IN order to compete with the world New Zealand has to offer its products at a competitive prive and that price has to include shipping them elsewhere.

Most Scandinavian countries are also more heavily industrialised and have more natural resources than NZ- oil in Norway, iron in Sweden etc. Denmark has a geographic advantage over NZ in market access. We have a geographic advantage over getting invaded by Germans:) A larger poupation at higher densitiy also leads to other advantages as well in regards to infrastructure- more people to pay for it, less distance to build it.

The left here hates it when you point that out.
 
You always need welfare. There has been forms of welfare in England and the UK for centuries. All the way back to Queen Elizabeth the firsts reign there have been distinctions made between the deserving poor and undeserving poor even proto-keynesian economics were used to employ the poor.

The thing I don't understand is that a modern worker creates more wealth and it is more productive then a worker decades ago. Therefore more tax revenue is made and so the welfare benefits for elderly people is met. To economists where am I going wrong?
 
Scandinanvia countries are often used by the left here as an example. They ignore one important factor of geography. Scandinavia has the european market to trade with. IN order to compete with the world New Zealand has to offer its products at a competitive prive and that price has to include shipping them elsewhere.

Most Scandinavian countries are also more heavily industrialised and have more natural resources than NZ- oil in Norway, iron in Sweden etc. Denmark has a geographic advantage over NZ in market access. We have a geographic advantage over getting invaded by Germans:) A larger poupation at higher densitiy also leads to other advantages as well in regards to infrastructure- more people to pay for it, less distance to build it.

The left here hates it when you point that out.
Pretty good arguments for not implementing our system in NZ :) But do you agree that at least with health care, even NZ should have for everyone?
 
That's a pretty disgusting viewpoint to have.

Its called "reality" and its been the way things have always happened and always will. I can't change it so why worry about it? Capitalism despite its flaws has dragged more people out of poverty and is less exploitive than every other political and economic suystem we have tried. Everyone poting here at civ fanatics has benefitted from someone getting exploited somewhere form the clothers you wear, the PC you use to post here, the car you drive or the plastic that makes up your keyboard.
 
Well, here's the thing. Scandanavia has tons of natural resources(especially Norway with its oil) to support such systems.

The most important factor however(besides the European union) is that all Scandavian countries have low population density which favors a socialist type system. France systems tries to be like the Scandanavian countries, but its failing. Its not because of poor implementation. Its just because they don't have the natural resources or the low population to sustain it. If france only had 6 million people and tons of oil, I bet it would work there too.
 
Its called "reality" and its been the way things have always happened and always will.
That's a cop-out if I've ever heard one. Capitalism has not existed forever.

I can't change it so why worry about it? Capitalism despite its flaws has dragged more people out of poverty and is less exploitive than every other political and economic suystem we have tried.
Socialism has beat it the few times it was tried.

Everyone poting here at civ fanatics has benefitted from someone getting exploited somewhere form the clothers you wear, the PC you use to post here, the car you drive or the plastic that makes up your keyboard.
And plantation owners used to benefit from owning slaves, your point?
 
Less people to share resources with.
But there are also less people producing said resources.
I sort of graced this issue with my statement about NZ GDP. The three major economic indexs place New Zealand at either 52 or 54. Comprably most European economies are in the top ten or twenty.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
Having a large welfare system has a hard time working when the population isn't very affluent for tax revenue.

Its like Marx said, for socialism to work, societies have to achive a certain level of industry. THe CIA world factbook argues that your free market system has done more for the rich than the poor. Apparently your economy was also driven by a credit boom not unlike ours and your GDP remains low due to little external demand.
CIA World Factbook said:
Over the past 20 years the government has transformed New Zealand from an agrarian economy dependent on concessionary British market access to a more industrialized, free market economy that can compete globally. This dynamic growth has boosted real incomes - but left behind some at the bottom of the ladder - and broadened and deepened the technological capabilities of the industrial sector. Per capita income rose for ten consecutive years until 2007 in purchasing power parity terms, but fell in 2008-09. Debt-driven consumer spending drove robust growth in the first half of the decade, helping fuel a large balance of payments deficit that posed a challenge for economic managers. Inflationary pressures caused the central bank to raise its key rate steadily from January 2004 until it was among the highest in the OECD in 2007-08; international capital inflows attracted to the high rates further strengthened the currency and housing market, however, aggravating the current account deficit. The economy fell into recession before the start of the global financial crisis and contracted for five consecutive quarters in 2008-09. In line with global peers, the central bank cut interest rates aggressively and the government developed fiscal stimulus measures. The economy posted a 1.4% decline in 2009, but pulled out of recession late in the year. Nevertheless, key trade sectors remain vulnerable to weak external demand. The government plans to raise productivity growth and develop infrastructure, while reining in government spending.
It doesn't seem to be as much the systems fault as it is your level of economic development. That said, I'm no economist and my knowledge of NZ is small, so my interpretation is likely wrong.
 
And before capialism existed you had a very small noble class and a huge number of exploited serfs or a tribal structure which was essentially the same. All of the socialist countires still need capitalism to pay for their social spending, and in most cases they can only afford it due to a variety of factors espicially in Scandinavia's case of low population and high resources.

Where has socialism triumphed?
 
So it's a kind of double edge sword.

And yes, we all wish we had Norway's oil resources.

In that case they can get the advantages of a low population and few of the disadvantages. NZ infrastructure is poor as the population density is even lower than most Scandinavian countries, we don't have close proximity to Europe, no large natural resources and we haven't had centuries to build infrastructure.

In essence the most sucessful socialist countries as such have numeorus advantages that most of the world doesn't have. Holding up these countires as a great exampe of socialism that works is a flawed arguement as it ignores multiple factors why it can work, and even then most of them are going to have problems soon as well.
 
And before capialism existed you had a very small noble class and a huge number of exploited serfs or a tribal structure which was essentially the same.
Exactly, and we're still moving forward.

All of the socialist countires still need capitalism to pay for their social spending, and in most cases they can only afford it due to a variety of factors espicially in Scandinavia's case of low population and high resources.
You don't know what socialism is if you think any of the Scandinavian countries are even remotely socialist.

Where has socialism triumphed?
Anarchist Catalonia to name the best example.
 
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