Tag Archives: welfare state

Forget the Greek Crisis, Immigration Will Divide Europe Against Itself, by Ryan McMaken

From Ryan McMaken, at mises.org:

Europe has complex immigration rules. As the EU web site shows, there are multiple layers of immigration regulations encompassing both the local national level and the EU level.

But, as the recent influx of refugees and economic migrants has shown, the EU government is able to flex its muscle in an ad hoc fashion in the service of compelling member states to accept the migrants and refugees. The “quota plan” being forwarded by the EU government would divide up migrants and refugees among the EU member states, and, of course, over time, these migrants would qualify for those member states’ taxpayer funded public benefits. In Germany, for example, officials “estimate that as many as 460,000 more people could be entitled [next year] to social benefits.”

Big Countries vs. Little Ones

The proposal could become a mandate if approved by a “qualified majority” of EU member governments, a type of majority that is weighed in favor of the larger members. Most of those larger members are in favor. If adopted, however, one doesn’t need to be exceptionally perceptive to see how mandates apposed on dissenting member states could be a source of significant division among member states, and especially, their populations.

Writing in the UK independent yesterday, John Lichfield avers:

North vs south; east vs west; Britain vs the rest; German leadership or German dominance. The refugee crisis is like a diabolical stress test devised to expose simultaneously all the moral and political fault lines of the European Union.

Germany leads to way in calling for more migrants. While part of it is no doubt Germany’s ongoing attempt to rehabilitate itself from its fascist past, there may be other considerations as well. Claire Groden in Fortune notes:

Germany has one of the world’s most rapidly aging and shrinking populations. With one of the world’s lowest birthrates, the country relies on immigration to plug a growing workforce hole. According to one expert quoted in Deutsche Welle last year, the German economy needs to attract 1.5 million skilled migrants to stabilize the state pension system as more Germans retire…According to current official estimates, every third German could be over 65 by 2060, leaving two workers to support each retiree.

Indeed, demographic issues such as these are surely part of the calculus for member states.The German government has likely weighted the benefits of new young workers against the possibility against the cost of those 460,000 new residents. But for other countries less desperate to save an overextended public pension system, they see mostly costs when it comes to more migrants and refugees.There is a real divide here between Western Europe (especially Germany and Italy) and Eastern Europe (especially Poland and Slovakia) in terms of the percentage of the population that is over 65.

But the divide between different member states, as described by Lichfield, surely goes well beyond this. There are issues of relative wealth to deal with as well. The Germans are rich compared to the Poles, for example, who have already announced they will take refugees but no economic migrants.

To continue reading: Immigration Will Divide Europe Against Itself

Europe’s Refugee Crisis——Thank You Washington And NATO, by Pater Tenebrarum

For wealthier countries, open borders and the welfare state cannot coexist. No surprise that the refugees headed to Europe want to go to the countries with the most generous benefits. From Pater Tenebrarum at davidstockmanscontracorner.com:

Stumped Politicians

Europe’s welfare states are currently flooded with refugees. Many of these refugees are fleeing the chaos of assorted civil wars in the Middle East, primarily in Syria, Libya and Northern Iraq. Naturally, it would be utterly inhumane to simply send such refugees back to where they have come from. How could one possibly look oneself in the mirror after sending people back to territories controlled by ISIS, or bombarded with barrel bombs by Assad’s air force?

This has Europe’s political class in a bind. The migration of people would pose no problem in a free society of property owners. Every property owner could decide for himself whether to accept refugees. In a free society communitarian enclaves would surely exist as well, and it is absolutely certain that private charity efforts would be orders of magnitude greater than in a society in which the State has arrogated all social responsibility to itself. It is hardly conceivable that migration would ever become a major bone of contention in such a society. It is quite different in welfare States with a severely hampered market economy.

In such states, migration will always be cause for highly emotional disagreements, because citizens know they will have to pay for it all involuntarily – and the costs are exceedingly large. The political and bureaucratic classes, who themselves are parasitizing society’s wealth creators, are of course not directly affected by the decisions they are taking in this context. The eurocrats employed in Brussels will continue to receive their generous salaries and perks, no matter what. However, a number of politicians are likely to face problems in domestic elections, and as we will discuss further below, the outcomes won’t necessarily be desirable. While the political and bureaucratic classes are unlikely to lose out, for a number of reasons it is absolutely certain that the citizenry at large will.

To continue reading: Europe’s Refugee Crisis

Why Europe Stagnates——-The Work Versus Welfare Tradeoff, Michael D. Tanner and Charles Hughes

It’s hard to quarrel with facts, so dedicated welfare statists will simply have to ignore the following facts. From Michael D. Tanner and Charles Hughes at the Cato Institute, cato.org:

If welfare benefits become too generous, they can create a significant incentive that encourages recipients to remain “on the dole” rather than to seek employment. Benefits in European Union (EU) countries vary widely, but in many of them, benefits are high relative to what an individual could expect to earn from a low-wage or entry-level job. For example, for a single parent with two children in 2013—

• Welfare benefits in nine EU countries exceeded €15,000 ($18,200) per year. In six countries, benefits exceeded €20,000 ($24,300). Denmark offers the most generous benefit package, valued at €31,709 ($38,558).
In nine countries, welfare benefits exceeded the minimum wage in that country.
Benefits in 11 countries exceeded half of the net income for someone earning the average wage in that country, and in 6 countries it exceeded 60 percent of the net average wage income.
• In Austria, Croatia, and Denmark, the effective marginal tax rate for someone leaving welfare for work was nearly 100 percent, meaning that a person would gain virtually no additional income from working. In another 16 countries, individuals would face an effective marginal tax rate in excess of 50 percent.
Benefits in the United States fit comfortably into the mainstream of welfare states. Excluding Medicaid, the United States would rank 10th among the EU nations analyzed, more generous than France and slightly less generous than Sweden. Thirty-five states offer a package more generous than the mean benefit package offered in the European countries analyzed.

Many European countries have recognized the problem and have begun to reform their welfare systems to create a better transition from welfare to work. In fact, the United States is falling behind some European countries with regard to welfare reform.

Countries that are serious about reducing welfare dependency and rewarding work should consider strengthening work requirements, establishing time limits for participation, and tightening eligibility. Perhaps more important, countries should examine the level of benefits available and the effective marginal tax rates their welfare systems create, with an eye toward reducing disincentives and encouraging work.

http://www.cato.org/publications/policy-analysis/work-versus-welfare-trade-europe

Free Shitters of America, from the Lonely Libertarian

From the Lonely Libertarian, via theburningplatform.com:

Twilight Of The Euro Welfare State, by Holman W. Jenkins, Jr.

The bell is tolling for Europe’s, and sooner or later everyone else’s, welfare states, regardless of how the Greek situation turns out. From Holman W. Jenkins, Jr., at The Wall Street Journal, via davidstockmanscontracorner.com:

Journalists have strained to apply their good guy-bad guy conventions to the Greek crisis. But are the bad guys the greedy, wastrel Greeks? Or are the bad guys the imperious, demanding Germans?

In fact, this narrative is a poor construction. What we’re seeing is less a story of good guy-bad guy than a terminal falling out among Europe’s club of welfare states over the inevitable problem that eventually other people’s money (in Margaret Thatcher’s phrase) runs out.

The Greek combination of welfarism-plus-cronyism, with a large helping of outright corruption, has long relied on other people’s money from abroad to make ends meet. But if the terms imposed by fellow Europeans for fresh loans-cum-aid have lately seemed intolerable to Greek voters, they still took the availability of fresh loans for granted. This week they are learning their right to their neighbors’ money is not automatic after all—and yet, for reasons we’ll get to, don’t be surprised if there’s an 11th-hour bailout.

Let us not kid ourselves, the way many Europeans are kidding themselves, that Greece is entirely unique. Portugal, Italy and Spain—“core” European welfare states—already have made the same transition to dependence on external “other people’s money” to uphold their welfare systems.

Their version of other people’s money is Mario Draghi’s implicit promise to tax all Europeans with future inflation (a promise that remains implicit at this point) to keep their welfare states afloat. If not for the European Central Bank’s promise, these governments likely would already be in the same position as Greece—unable to finance their deficits.

As long as Mario Draghi is on the job, there should have been no dramatic, visible “contagion” from the Greek crisis. And there hasn’t been, for the same reason there was none from the Cyprus crisis two years earlier. There is no “surprise” involved: The markets had already fully internalized that Greece and Cyprus were outside the circle of Mario’s magic guarantee, so there is no reason their default need be seen as heralding other defaults.

But the fundamental long-term problem still remains: How will France and Italy especially (the key too-big-to-fail economies) find their way back to reliance on internal taxation plus voluntary, market-based lending to keep their welfare states up and running? Is this even possible in a democratic political system with large, calcified interest groups? Then again, if European states are already maximizing their option to avoid reform, might not the feared triumph of populist parties in future elections actually be a good thing, producing a crisis that forces action?

To continue reading: Twilight Of The Euro Welfare State

In the Name of Tolerance, Kill the Curmudgeons, by Robert Gore

Game of Thrones features beheadings, hangings, torture, incineration, parricide, war, rape, incest, betrayal, and intrigue, among other untoward depictions. Refreshingly, the aspirants to the Iron Throne do not pretend they seek it for the public interest, common good, or the children. Those contenders with some nobility among the admixture of their motives acknowledge their ambition—it’s good to be King (or Queen)—and the ignoble have the courage of their own ruthless rottenness.

This naked drive for power, shorn of hypocrisy, stands in welcome contrast to contemporary politics. Between now and November of 2016, we’ll hear countless speeches and interviews from a dozen plus candidates claiming—while wiping away a tear or two—that they are running to Restore America’s Greatness, or Take Back America, or Fulfill America’s Promise, or some such Madison Avenue-conceived, poll-driven, focus-group-tested drivel. Any candidate who admitted that he or she sought the presidency because the American government has treasure, power, and empire that puts Alexander, Caesar, Khan, Napoleon, and Hitler combined to shame and yes, by God, it’s good to be King (or Queen), would be disqualified immediately. Instead, all must swear to make like Glinda the Good Witch and use their power—should they be chosen to lead the great people of this great nation—only for the Benefit of Humanity. That anyone can stomach this revolting nonsense is astounding, but millions do because of the central tenet of American politics: You can get away with anything as long as you say you’re doing it for somebody else.

Facebook, the company that made “like” a noun, epitomizes America, 2015. While human nature hasn’t changed a whit over the millennia, almost everyone wants to hide the worser demons of their natures, accumulating actual likes on Facebook and figurative ones in every other avenue of social interaction. Oh sure, if you poke around the Internet you can kind find plenty of naysayers, bubble-busters, and other curmudgeons, but even many of those misanthropes hide behind aliases. Nice people don’t journey to such dark corners. “Nice” is the vapid kissing cousin of “like.”

One can be labelled “nice” merely by keeping one’s mouth shut and nodding at the appropriate times. What’s a Facebook like worth when there is no “dislike”? The only word in the English language more insipid than “like” and “nice” is “cute,” a distinction achieved upon birth by virtually all mammalian offspring and many reptilian, amphibious, and bird species’ offspring as well. It is especially important for political and entertainment celebrities, their stock-in-trade popularity, to be considered nice and likable, which is why most of them acquire causes once they’re in the limelight. Never mind the bodies they stepped over on their climb to the top, the lies, backstabbing, criminality, debauchery, addictions, and transparent phoniness; they are deeply concerned about global warming, or income inequality, or the plight of the denizens of some obscure corner of the planet, or something equally worthy.

Declarations of unmet social needs have preceded every expansion of the welfare state and of course, such needs can only be met by removing money from some people’s pockets and putting it other people’s pockets. The pickpockets claim the mantle of “nice,” or more grandiosely, “humanitarian,” while protests from the pick-pocketed prove that they’re selfish and mean, the evil opposite of nice. That pursuit of happiness thing implies a certain selfishness, so it has been modified. You can marry someone of the same sex if that floats your boat. (Gay marriage isn’t just nice, it’s rainbow nice!). If you’d be happy keeping what you’ve earned, forget about it. You’re selfish and mean, and it’s a good thing Facebook doesn’t have a thumbs down, or you’d get a bunch of them. Besides, letting you keep what you earn would pull the rug out from under Obamacare, which the Supreme Court just twisted itself into a linguistic pretzel to save.

Nice as we are to each other at home (except to the selfish, the naysayers, the bubble-busters, and the curmudgeons) we outdo ourselves in war. Not since the Civil War has the US fought on its home territory. Since then, all its wars have been fought to save someone in some foreign land against some terrible scourge. Weirdly, oftentimes even the people we’re saving don’t want us there, and gratitude for our efforts is lacking. Oftentimes, so too is success. The misanthropes in our midst might say that our efforts have usually made the situation worse. They certainly have costed a lot of money and killed a lot of people, although that is cancelled out by the purity of our motives, which excuses us from conducting honest assessments of our failures and allows us to produce more of them.

Only the blackest of hearts question the motives of the pure. Those black hearts note that money involuntarily extracted from selfish bastards doesn’t just meet unmet social needs and make the world safe for democracy and the American Way of Life. It buys votes; funds bloated medical-care, welfare, agricultural, educational, and military-industrial-intelligence complexes, and pays the salaries of a swarm of micromanaging bureaucrats who get to make life miserable for the rest of us. Even with all the money the government extracts in pursuit of its unquestionably worthy goals, with such a big heart it cannot help but live beyond its means. A host of connected, but worthy, Wall Street types make well-deserved oodles of money using borrowed funds at ultra-cheap rates to speculate on the debt and interest rate machinations of the government and its central bank. Only the misanthropic could object to such a charitable endeavor.

There is only one problem with our rubber room, Barney the Dinosaur world: reality is sometimes not nice. As Greece and Puerto Rico demonstrate, credit markets can turn off the spigot and governments can go bankrupt, even when they are stocked with good people and the money is to be used for worthy purposes. It’s a funny thing about many not-so-nice people: they’re often the ones who know how to produce things. When the nice people—for the best of reasons, of course—make it difficult to produce, the not-so-nice produce no more than is necessary to keep themselves and their loved ones (even the not-so-nice have loved ones) alive. Selfish, you may say, but they have skills other than being likable—for which they often have nothing but contempt—and they use them. They may not much care if the whole system collapses, because they can take care of themselves, and if you want something from them, you’d better have something of value to offer in return.

So push them far enough, and the not-so-nice drop out…or rebel. The Confederate flag is a symbol of racism, which we all abhor. It is also a symbol of secession and rebellion, which may be a bigger part of why it is abhorred. In our Age of Tolerance, those sentiments are intolerable. The US was founded on secession and rebellion; they were once as essential to the American character as self-reliance and individualism (now known as antisocial selfishness). It would be the latest in a long string of mistakes from our benevolent powers that be if they assumed that spirit was dead and not just dormant. The better bet is that it will be awakened when their goo-goo flotilla of inoffensive banality, speech codes, trigger warnings, political correctness, and spineless conformity crashes on the shoals of dire but prescient warnings dismissed and hard truths left unspoken.

NICE IS BORING; THIS NOVEL IS NOT.

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AMAZON

KINDLE

NOOK

American Exceptionalism and the Entitlement State, by Nicholas Eberstadt

This long article from Nicholas Eberstadt at nationalaffairs.com is better skimmed than read. Although Mr. Eberstadt is badly in need of a more ruthless editor, the article is a good take on the entitlement state, and the American populace’s growing dependence on the government. From the one-graph-is-worth-a-thousand-words file:

http://www.nationalaffairs.com/publications/detail/american-exceptionalism-and-the-entitlement-state

For the graph and article: American Exceptionalism and the Entitlement State

The Death Of A Nation: Japanese Births Drop To Lowest Ever, Deaths Hit All Time High, from Zero Hedge

This may be how welfare states die, literally dying away as people forego having children they know are going to end up being slaves to the aging beneficiary class. From Zero Hedge:

Supporters and opponents of Abenomics may debate the metaphorical death of Japanese society as a result of the terminal hyper-Keynesian, hyper-monetarist policies implemented by Abe and Kuroda for the past 2 years until they are blue in the face, but when it comes to the literal death of Japan, there is no debate: as the FT succinctly puts it “deaths outnumbered births in Japan last year by the widest margin on record, underscoring the scale of the challenge facing the government as it tries to ensure a dwindling pool of workers can support growing
ranks of pensioners.”

Indeed, while Japan may or may not surive the collapse in the Yen, which will send the Nikkei225 soaring although nobody will be able to enjoy this unprecedented paper wealth because nobody can afford to eat, drive or heat their house, and all Japanese companies will be long bankrupt, it now looks almost certain that the death of Japanese society will not be due to a runaway printer, but due to, well, death itself.

To read the rest of the article: http://www.zerohedge.com/news/2015-01-02/death-nation-japanese-births-drop-lowest-ever-deaths-hit-all-time-high