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Welfare and perverse incentives
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| MrJiveBoJingles |
Welfare systems take money from people who work and give it to people who don't, with the intention of helping out people who don't have jobs.
Some people claim that such systems set up "perverse incentives" in the following ways:
1. Under a welfare system, whether you work or do nothing has no bearing on whether you can stay alive, therefore fewer people will work. As fewer people work, more taxes are needed to support the increased number of people on welfare. These heavier taxes mean less income for those who work, hence they further diminish the monetary difference between working and not working, which causes yet more people to quit work, ad infinitum.
2. In the case of old age pensions, the welfare system (by providing "free" money) effectively encourages people to stop working as early as possible, and makes less serious the problem of caring for your parents in their old age. This means that relations between the generations tend to deteriorate, since it's easier to ignore family ties if you think that they'll never be necessary for anyone's survival.
3. The welfare system provides more money to single parents than to wedded or coupled parents, thus subsidizing the creation of single-parent homes.
4. By giving money to those with incapacitating physical or mental illness, welfare encourages people to fabricate illnesses and exaggerate the seriousness of existing illnesses. This puts a strain on the medical system, which necessitates higher taxes, which lead to the effects noted in (1).
5. By decreasing the incomes of working people and acting as a de facto charity, a welfare system encourages people to give less to private charities.
How valid do you think these criticisms are? |
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| gehzumteufel |
the welfare system in the USA is a joke. my family was on it at one time. i can tell you it has so many problems, at least in california, its ridiculous.
first off, the more you work the less you get. well when your in a ty situation that you cant afford your bills while working just enough to keep all your welfare money, how are you supposed to GET OFF welfare!?
so basically the more you make they diminish your welfare benefits accordingly. which just puts you back in the same situation. its really a lose-lose situation. sucks |
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| Fibonacci |
| Somebody leave their homework until the last minute? :thepirate :thepirate |
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| pkcRAISTLIN |
| there is an element of truth to some of your points, but essentially its still over-simplified and skewed in one particular direction. if this thread is still going when im at work tomorrow, i might be bothered to get into it. but yeah, those criticisms certainly float around. |
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| Beat Blog |
BoJingles, please, I beg you.
Just take a philosophy course.
:tongue3 |
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| narcism |
| you have a valid point on some of the issues, but i believe the age of retirement in australia is being increased to 60 something and there is talk of cutting a pension all together so people are now working to save enough money to live off for retirement |
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| Beat Blog |
| quote: | Originally posted by narcism
you have a valid point on some of the issues, but i believe the age of retirement in australia is being increased to 60 something and there is talk of cutting a pension all together so people are now working to save enough money to live off for retirement |
The pension IS being cut in Australia.
Not sure of the exact date, but super is being phased in while pension is going out.
Still, the government has to protect people from themselves, because when people receive $200,000 in super they go "great!" and buy a new car/boat/whatever.
Apparently super payouts will now be drip fed week by week like a pension is now, only you actually earn it yourself. |
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| Darkarbiter |
| quote: | Originally posted by Beat Blog
The pension IS being cut in Australia.
Not sure of the exact date, but super is being phased in while pension is going out.
Still, the government has to protect people from themselves, because when people receive $200,000 in super they go "great!" and buy a new car/boat/whatever.
Apparently super payouts will now be drip fed week by week like a pension is now, only you actually earn it yourself. |
What if your scheduled to die at a certain date and you wanna spend the money? Do they give it to you then? |
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| MrJiveBoJingles |
| quote: | Originally posted by gehzumteufel
first off, the more you work the less you get. |
That's kind of inevitable, isn't it? Think about if it were otherwise:
Say welfare is set up so that you get $10,000 year if you have either no job or any job that makes less than $10,000 a year. You start at a wage that will get you $5,000 a year and work your way up. As you hit $9,999, you are still getting the additional $10,000 from welfare, so you're receiving $19,999. Then say you get a raise, which bumps up your job from $9,999 to $12,000 a year. But then you lose your welfare benefits, so your annual income drops from $19,999 to $12,000.
So I think there has to be some system of diminishing benefits, not just a straight drop-off, otherwise there would be little incentive for people to make more than the "cutoff point" income. Maybe I'm missing something, though. |
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| MrJiveBoJingles |
| As far as the criticisms go, I think they may have some weight to them, but a lot of people overemphasize how serious they are. I think that a welfare system is ultimately sustainable simply because most people want a lot more stuff than they can get with a welfare-level income. |
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| MrJiveBoJingles |
| quote: | Originally posted by Beat Blog
BoJingles, please, I beg you.
Just take a philosophy course. |
I've taken a bunch. |
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| gehzumteufel |
| quote: | Originally posted by MrJiveBoJingles
That's kind of inevitable, isn't it? Think about if it were otherwise:
Say welfare is set up so that you get $10,000 year if you have either no job or any job that makes less than $10,000 a year. You start at a wage that will get you $5,000 a year and work your way up. As you hit $9,999, you are still getting the additional $10,000 from welfare, so you're receiving $19,999. Then say you get a raise, which bumps up your job from $9,999 to $12,000 a year. But then you lose your welfare benefits, so your annual income drops from $19,999 to $12,000.
So I think there has to be some system of diminishing benefits, not just a straight drop-off, otherwise there would be little incentive for people to make more than the "cutoff point" income. Maybe I'm missing something, though. |
well i dont disagree that there needs to be a sliding scale for diminishing benefits. it is necessary but the income limits are set in ty places. as a former welfare kid i can attest to it. |
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