Do things need to get worse before America will wake up and smell what is cooking?

[eddie_dane]

Originally Posted by supermonkey

Not on my private island. Beware my army of trained ninja assassin monkeys!!

I'm rowing over with a box of bananas and scotch.

[Er-El]

Originally Posted by Da_Rude_Baboon

They want to reduce the government to the smallest entity possible, remove the welfare state and have a completely free market economy? I'll give one example of why I think this is simplistic and wrong.

In a free market economy the more in demand a commodity is the more expensive it is. It is widely reported that the UK currently has about 1 million fewer homes than we need which keeps prices artificially high. We have a low income worker who has just been told he does not have to pay tax any more. Great more money! Unfortunately he lives in a local authority house subsidised by the government and now that the welfare state is gone he has to pay the market value to buy or rent the house. Oh dear as housing is in demand he now has to pay more for his house so less money to save for a pension. Health care is now in the hands of insurance companies so he better keep on paying those premiums in case he or a family member gets sick. That's less money to save and put towards a pension. In our free market economy Tesco goes on a spending spree and becomes a bigger monopoly than it is and starts raising food prices. Bugger more of those tax savings are being spent elsewhere just to survive. Oh no! Here comes a harsh winter and energy prices sky rocket! Now he's too old to work and does not have a pension and cant afford his rent. What happens with no welfare state to help?

Simplistic and extreme example but it as simplistic as lpuk.

Nope they want to devolve welfare to councils, leaving them to ration welfare for those most deserving of support, and reduce peoples' dependency over time. The "government will honour all existing commitments". And they don't want to JUST suddenly switch to an insurance health care system with no government intervention, but the goal is to eventually have a compulsory medical savings account system, and only when the people can afford it. It would be irrational to make a lightswitch transformation. The alternative doesn't always have to mean America's system, which btw is a terrible example, but I'm pointing more towards what they have in Singapore.

You've made some valid points except you've overlooked one thing: demand. When prices go up, people will look for alternatives, e.g. renting a cheaper a home, buying their food from Morrisons rathern than Tesco.
And how is it Tesco are able to become a bigger monopoly? When the smaller supermarkets have it harder to compete, and the even smaller independent shops have more barriers for entry into the market. Supermarkets in this country are actually a decent example of how free markets favour the consumer, compared to other industries where it isn't allowed to function as well. Quite often it's the government who lead to monopolies (of course not always because they're unavoidable) as well as scarcity, whether it's through anti-competitive regulations (perhaps lobbied to favour the bigger corporation) or high tax.

[Da_Rude_Baboon]

I did not suggest the changes would be made over night. The "government will honour all existing commitments". How can you do that and still make the changes they are suggesting? Compulsory medical savings account sounds like another way of saying tax to me.

A shortage of homes drives prices up. Building a million more houses solves that problem but with a greatly reduced government who now looks after the planning and building regulations and who pays for it? Ultimately it looks like a lot of work for a paper exercise. You do not pay tax to the government, you just pay it to some one else instead and hope that the market left to its own devices will benefit the consumer.

Tesco is held back from a complete monopoly by the government. If you make it a truly free market what will stop them? You can only shop at Morrison's, or ASDA etc when they are available but if Tesco were left to its own devices it would drive the competition away. Look at its well documented strategy of 'land banking' to prevent competitors from opening supermarkets and the way it aggressively targets local stores by under cutting them with loss leaders until they go out of business. We already have 'Tesco Towns' in the UK where they have a monopoly it is widely agreed to be very detrimental to the community. Supermarket price wars are all ready seriously hurting UK agriculture and our dairy industry is a prime example. The consumer gets cheap milk but at what cost to the country and the animals producing the milk?

Eddie will be able to trounce me in this argument, but IMO a free market keeps prices low but it doesn't care about the cost of keeping prices low. I expect the argument is its up to the consumer to decide.

[BRAWL]

Originally Posted by Er-El

Nope they want to devolve welfare to councils, leaving them to ration welfare for those most deserving of support, and reduce peoples' dependency over time.

Sorry to butt in. Actually as councils we're having the control taken off us. Their new idea of Universal Credit is to give all welfare powers to HMRC.

Scary huh, the taxman will be in charge of everything soon enough.

[eddie_dane]

Originally Posted by Da_Rude_Baboon

A shortage of homes drives prices up. Building a million more houses solves that problem but with a greatly reduced government who now looks after the planning and building regulations and who pays for it? Ultimately it looks like a lot of work for a paper exercise. You do not pay tax to the government, you just pay it to some one else instead and hope that the market left to its own devices will benefit the consumer.

There is a difference between removing building restrictions and outright abolition of building regulations. It's not a all-or-nothing proposition. But when you restrict land usage, building heights, green space, rent controls (which is a product of the previous factors), etc etc you artificially increase the costs involved. London has been a world class city for centuries, it did not spontaneously sprout in the 1970's when most of the current artificial restrictions were placed. You ask who will regulate? I ask who regulated prior to that? New York is no different. I could make an argument that all limitations on building could be removed since history is on my side but I also concede that people may not be comfortable with that level of unrestricted freedom. But, every limitation comes at a cost that cannot be eliminated.

As to accommodating existing arrangements, it's totally possible and similar proposals have been made here in the States for decades. Generally speaking is that you acknowledge that the current scheme is flawed/doomed. It is economically beneficial to pay out to everyone who has historically paid-in but you draw a line in the sand and say that everyone who is currently paying in, will start using a new system. It's the only realistic and responsible means to replace an entrenched system that people have been making long-term plans and have paid into. Of course, the current US systems like Social Security are not plans that people have invested in only to be paid back later. Current workers are paying for current beneficiaries and future beneficiaries depend on the future payers to receive their benefits.

Savings accounts have a remarkably encouraging results. Whole Foods here in the states use them for their employees and it seems to be working very well. I agree with you, the compulsary nature of it does wreak of taxation, and in a sense, you are right. The key difference is who controls the money and a critical shift in the transaction between patient and medical care provider. Patients make the decisions on how the money is being spent which has a powerful effect. The current relationship between insured patients and medical care providers is disjointed causing all sorts of pricing and payment problems.

[Er-El]

Originally Posted by BRAWL

Sorry to butt in. Actually as councils we're having the control taken off us. Their new idea of Universal Credit is to give all welfare powers to HMRC.

Scary huh, the taxman will be in charge of everything soon enough.

True that. Just to clarify though, I wasn't advocating current government reforms. Far from it.

Originally Posted by Da_Rude_Baboon

I did not suggest the changes would be made over night. The "government will honour all existing commitments". How can you do that and still make the changes they are suggesting? Compulsory medical savings account sounds like another way of saying tax to me.

OK well at least we're clear about one thing now. But what I meant was some of the ways in which the current government is reducing the benefit is quite fraudulent, because both parties agreed to those terms in advance, so it seems wrong to me that they would sudddenly deceive those people.
However, when it comes to NEW claimants, the state (whether it's central government or the councils) do have to start being progressively stricter with handouts because I do believe it encourages a culture of dependency, and people find themselves trapped only marginally above the poverty line.
Secondly, I do think the councils would do a better job of rationing support for the most vulnerable as they would have a better understanding of their local community (whether it's a wealthy or not, or whatever) than central government agencies. Welfare as a safety net, not a hammock.

The 'Compulsory' part of the medical savings account scheme might in essence be the same as taxation, but it would be the last step before making it optional and trusting people to make the right decision for themselves. I think it would be a vital transitional step, because it would reveal the fact that people can be self-reliant and don't need to held by the hand by the state.
The whole scheme in general also avoids the problems of both an insurance market and the NHS, because people would be the consumer, rather than the insurance company being the consumer on their behalf.

Most importantly, I think we need to move away from this notion that there is a fixed amount of wealth, a pre-destined amount 'poor' people, and when the rich get richer it's at always at the cost of the poor getting poorer. In fact when the relatively poorest are being stealth taxed to no end and fighting a constant battle against inflation, it is this which creates a bigger wealth gap.