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This is pretty long, sorry about that, but please persevere.

If you could pay 50 to 60% of your income in taxes in return for all your retirement benefits, unemployment benefits, childcare, paid time off, health care for life and perhaps a few other goodies like college, would you make that choice?

No doubt, many people would answer yes, as they have in other countries. In Scandinavia, people seem to like this system. In Sweden with the second highest tax burden in the world, the median voter is a women who works for the public sector and around two-thirds of the electorate draws most of their income from the state either as an employee or from the benefits collected. On the other hand, as one

Swede said, “the only downside is that our taxes also have to pay for a very large and cumbersome public sector that lags a long way behind Sweden’s private sector in terms of productivity. One has to wonder if some of those taxes could be put to more productive use, but productivity and innovation is not what this is not the topic at hand..

Of course, it is relative. Sweden’s’ debt as a percentage of GDP is 36.5% while in the US it is as follows:

GDP in Billions Debt as % of GDP

2007 13807.5 65.24

2008 14280.7 69.93

2009 14291 88.90

2010 14902 94.47

If you looked at these numbers in isolation one might conclude that the US is the bigger welfare state. However, Sweden has 9 million people and few, if any world obligations. Perhaps they are on to something, just stay in Happy Valley, and make steel, cell phones and furniture that takes six hours to put together. All this socialism may get you something though, the life expectancy is Sweden is 80.86 and in the US currently 78.11, or could it be all the fish?

Now for those who did answer yes, what would that make you? It would make you an “interest group just like unions, environmentalists, gun enthusiasts and employer organizations. Why does that matter, well as an interest group you would be competing with all other such groups for more of what you want. You would want politicians to be responsive to your demands, you would in fact, want them to give you more and most likely knowing that you vote them into or out of office, they would be responsive to your desires.

Over time, you become dependent on the government for many important things and your focus turns from personal responsibility to dependency. When things do not go right or are no longer affordable you may become upset, you may even march in the streets or perhaps go on strike. In the process you become more and more like everyone else, there is less and less point to striving to be different because no matter what you do your basic needs are taken care of by the government and, of course, you always pay that 50% to 60% of income in taxes.

As you seek more and more “free stuff from the government, politicians are increasingly interested in keeping you happy in the short run and as is usual do so with short-term solutions while long-term costs and problems grow. Keep in mind that the main goal of government is to get re-elected or otherwise stay in power. The main objective of bureaucrats is to keep their jobs in anonymity.

The common view is that all these benefits are “free when provided by the government. How many times have you heard someone use the phrase “free health care? However, they are not free; they are now in the magical land of “government with the typical inefficiency and mismanagement that always goes with it.

Regardless of any misgivings, there are still many people who find the welfare state appealing, but what happens when a population so dependent on government finds itself with leaders who are not so nice who seek power over service or have goals beyond their own country? How quickly do the checks and balance work? How quickly are citizens willing to put their welfare at risk?

Is it the job of government to “provide for its citizens? Alternatively, is it the job of government to organize and manage those things that are best done equally for all citizens such as roads, defense, security, emergency services, education and oversight of businesses that do affect the health and well-being of all citizens? Is it the job of government to remove barriers to inequality heaped on man by man and to assure a fair playing field for opportunity?

So, what is the point of all this? The point is that the US is on the road to a system with citizens more and more dependent on government, which in turn will be more and more dependent on taxes, which in turn means that the citizens will be more demanding of the services they get with those taxes because they are more and more dependent on those services.

If that is what you want, that is fine. If you would like more control over the use of the fruits of your labor than it is not so fine. Frankly, if all the world becomes like Sweden (nothing against the Swedes mind you I am part Swedish), where do the high stakes risk takers, innovators entrepreneurs go? Where do the people who want to keep the value they create go, perhaps China? Contrary to current popular opinion, in my view (and in the view of many prominent and Nobel winning economists), capitalism has not failed. Capitalism has done far more good for far more people than can be counted, not perfectly of course and not always fairly, but in the long run the results are positive.

Let the games begin. If you are getting the kind of change you voted for, be happy!

I think this is an interesting post and it deserves a longish answer in return. I will get back to you about it, because even in "happy valley" socialist Europe you have to work hard to make a living that doesn't involve poverty; and that's what I am doing, so I will get back to this one.

Over time, you become dependent on the government for many important things and your focus turns from personal responsibility to dependency. When things do not go right or are no longer affordable you may become upset, you may even march in the streets or perhaps go on strike. In the process you become more and more like everyone else, there is less and less point to striving to be different because no matter what you do your basic needs are taken care of by the government and, of course, you always pay that 50% to 60% of income in taxes.

As you seek more and more “free stuff from the government, politicians are increasingly interested in keeping you happy in the short run and as is usual do so with short-term solutions while long-term costs and problems grow. Keep in mind that the main goal of government is to get re-elected or otherwise stay in power. The main objective of bureaucrats is to keep their jobs in anonymity.

The common view is that all these benefits are “free when provided by the government. How many times have you heard someone use the phrase “free health care? However, they are not free; they are now in the magical land of “government with the typical inefficiency and mismanagement that always goes with it.


For me this seems to be where I come adrift from you: Yes, some people behave as you say - in America as Europe, if the comments I've read on this site are to be believed. But not all. And the people who do behave this way are highly unlikely to be the innovators and wealth creators you refer to. Note your own comment that the private sector in Sweden is much more efficient and productive than the public sector - I take from that that there is, even in Sweden, a place for the wealth creator and innovator. Sweden is not known for the poverty of its citizens. I'm not sure how they are coping with the present storm, but I haven't heard they are in trouble.

Governments are about being re-elected and bureaucrats are about anonymous power. Yes, some of them, some of the time. That's where we the people come in: I suspect Brown will lose the next election, no matter how well he does, because people over here are saying, for a wide variety of (often contradictory!) reasons that they've been in power long enough and it's time for a change. You've just done the same in the USA. To be fair, I must point out that the only high ranking Civil Servant I knew was a dedicated man who worked very long hours on thoroughly worthwhile projects. A true professional. So they aren't all bad.

Welfare is not "free" and although it is often referred to as such in the press most of us are aware of that. It is designed to be "free at the point of delivery" but we are well aware that our taxes are what pay for it: The National Health Service exists because the vast majority of ordinary working folk in this country are prepared to pay taxes to have it there. (This isn't to say there aren't endless arguments about how much and what for :wah:). Democracy in action - the welfare we have is the will of our people. Same is true of you and yours. But both are subject to change.

with the typical inefficiency and mismanagement that always goes with it.


Um, aren't we talking about the banking sector here?;)

Truth is, people are people and you find good and bad ones in both systems. I suspect it comes down how well those people are managed, and manage themselves....Hmmm. At which point we're talking about things like culture and duty. Need to take a pause here!

The concept of "public service" took a battering in the Thatcher years, and in what I might perhaps call the Union years that preceded them, when a lot of the sort of abuses you refer to did occur.

But I think the concept is still there. Nowadays, after the sheer greed years we need to take more care that a sense of duty to more than your own wallet is present - in business and the public sector. It is no more acceptable to trash the international trade system to secure yourself a bigger bonus than to take bribes to give planning permission, for example.

On the other hand, I have no problem with you taking risks as long as the innocent and uninvolved are not caught up in the conequences of a resulting failure.

So how do we effectively introduce an ethical system into management, what should that ethical system be, and how do we maintain it once created?

Or should the free market simply be left to outrageously reward the unscrupulous?

posted by quinns commentary

If you looked at these numbers in isolation one might conclude that the US is the bigger welfare state. However, Sweden has 9 million people and few, if any world obligations. Perhaps they are on to something, just stay in Happy Valley, and make steel, cell phones and furniture that takes six hours to put together. All this socialism may get you something though, the life expectancy is Sweden is 80.86 and in the US currently 78.11, or could it be all the fish?


Course if you only spend enough on the military to make yourself too big a mouthful for any would be attacker you have more to spend on welfare,

If that is what you want, that is fine. If you would like more control over the use of the fruits of your labor than it is not so fine. Frankly, if all the world becomes like Sweden (nothing against the Swedes mind you I am part Swedish), where do the high stakes risk takers, innovators entrepreneurs go? Where do the people who want to keep the value they create go, perhaps China? Contrary to current popular opinion, in my view (and in the view of many prominent and Nobel winning economists), capitalism has not failed. Capitalism has done far more good for far more people than can be counted, not perfectly of course and not always fairly, but in the long run the results are positive.


Sweden has a capitalist economy but a socialist welfare state. the two are not incompatible.



Taxes, Income Tax, Tax Rates. Finance, Economy - The WorldWide-Tax.Com



I assume you also have sales taxes in the states-that's basically what VAT is.

gmc;1168616 wrote: posted by quinns commentary



Course if you only spend enough on the military to make yourself too big a mouthful for any would be attacker you have more to spend on welfare,



Sweden has a capitalist economy but a socialist welfare state. the two are not incompatible.



Taxes, Income Tax, Tax Rates. Finance, Economy - The WorldWide-Tax.Com



I assume you also have sales taxes in the states-that's basically what VAT is.


But a large percentage of the population works for the state.

But a large percentage of the population works for the state.


So?

Do it right and it can work.

Okay, I promised to get back to this one.

I think you are mixing a couple of issues here.

1. First there is the one about the redistribution of wealth in a society.

2. Then there is the one about how you actually create wealth to redistribute in the first place because you can't redistribute what you don't have.

3. Then there is the issue of fiscal rectitude in how you actually govern a nation economically.

4. Then there is the issue of the commitments as the world's leading geopolitical power, that the US has taken on since 1945 and how that impacts on America internally.

5. Finally there is the philosophical issue of what is in the interests of the liberty of the individual in terms of how the society they live in is economically and politically organized (a big question of the ages).

I'll answer each in turn.

1. To my mind it seems imperative in any society (which is a collection of individuals) is that the rewards of having a collective society is that each individual member of that society feels valued and rewarded to some extent, equal to the contribution they make toward the shared burden of organizing how we live and looking after ourselves. Thats the concept of equity. No society will last that does not provide some sense of membership and ownership to the majority of those who work to maintain that society.

Obviously, no society can be devised where all is shared equally, no more than the roles people have within society are equal, however, the concept of a Republic is that there are inalienable rights maintained under law, that all citizens share regardless of economic or political position, by dint of being citizens. However, in modern times we have taken for granted the right to citizenship just by the fact that we breath, when in fact the right to citizenship was in the past encumbent on certain conditions, people no longer place value on the rights that were won for them, and instead just seem them as natural entitlements, granted by god or something.

I guess in Europe the philosophy is that derived from Rosseau's ideas regarding "the social contract" in that it is encumbent on the members of a society to remember that their position or their wealth are a result of them living within the support of a society and it in their own interest and the interest of equity that they give due contribution and allegiance to that society. This idea exists in America also, though it is expressed in a somewhat different form, more about individual contribution to "give something back" to society whereas over here its seen as a function of government to make sure than some sort of social justice prevails.

2. The second question is one regarding how you give people the incentive to innovate, work hard, and create wealth. Of course everyone over 21 realizes that governments don't create wealth, they gather the wealth a society generates, and are supposed to use it to protect and improve the conditions of that society or nation (in theory). In Europe we have a Capitalist economy as in America, however most European nations have higher direct taxation and they use a lot of this money for public services, social welfare payments, and pension schemes. The question is, does this put a brake on people's desire to get on and make money and create new businesses and wealth?

My answer would be no, if you look at the EU, it is the world's largest single economy, it has many of the world's leading companies, and lots of bright educated hungry people who are very interested in making money and getting on. If the European model was the disaster that right-wing free-maketeers make out, this wouldn't be the case. There are economic arguments about the degree to which different economies grow etc, but generally I think that the European model gets the balance more or less right between social capital and actual Capital itself.

3. Obviously in recent times there has been a lot of talk about this, and most Western governments have been living beyond their means to one extent or another. Some however are better than others, and always its vital that those in power limit their ambitions based on the resources available. And thats the case whether the money is being used to fund global geopolitical hegemony, or lavish social welfare systems and public services. Obviously the numbers you have quoted speak for themselves about which government has been more responsible about borrowing in recent times.

4. America has been the world's single most powerful, wealth, and militarily powerful nation since 1945. Inevitably, that position has resulted over time with the US being massively involved across the globe in terms of economic interests, military interventions, alliances, emnities, etc etc. As the British found in the early 20th century, with supreme power, comes supreme responsibilities and very, very high costs.

The only real question is what sort of posture the US wishes to maintain in the world and what its prepared to pay for it. The facility to borrow to maintain its geopolitical position will no longer be viable, but that doesn't mean the US has to give up global leadership, just perhaps that it should be more wise in how it uses its resources in the future. What does seem clear to me, is that many, many Americans seem to make no link between their own domestic lives in the US, the news from abroad they may get to hear, and the positions its country takes in the world on various issues. If America wants to remain the best, strongest, and most powerful nation that will have to change, and the internal naval gazing will have to stop.

Being a European, I tend to have an equal belief that what is good for society (in general) tends to be good for the individual, but that when a question of liberty versus expediency arises you should always err on the side of liberty.

Galbally;1169102 wrote: 1. To my mind it seems imperative in any society (which is a collection of individuals) is that the rewards of having a collective society is that each individual member of that society feels valued and rewarded to some extent, equal to the contribution they make toward the shared burden of organizing how we live and looking after ourselves. Thats the concept of equity. No society will last that does not provide some sense of membership and ownership to the majority of those who work to maintain that society.

Obviously, no society can be devised where all is shared equally, no more than the roles people have within society are equal, however, the concept of a Republic is that there are inalienable rights maintained under law, that all citizens share regardless of economic or political position, by dint of being citizens. However, in modern times we have taken for granted the right to citizenship just by the fact that we breath, when in fact the right to citizenship was in the past encumbent on certain conditions, people no longer place value on the rights that were won for them, and instead just seem them as natural entitlements, granted by god or something.

I guess in Europe the philosophy is that derived from Rosseau's ideas regarding "the social contract" in that it is encumbent on the members of a society to remember that their position or their wealth are a result of them living within the support of a society and it in their own interest and the interest of equity that they give due contribution and allegiance to that society. This idea exists in America also, though it is expressed in a somewhat different form, more about individual contribution to "give something back" to society whereas over here its seen as a function of government to make sure than some sort of social justice prevails.


Gland you broke up your response, but I'm not sure I am up the the task, but we will try.

Can't argue with any of this and as you know I have never argued that there are people in any society who need help from that society through no fault of their own and there always will be such people.

Galbally;1169104 wrote: 2. The second question is one regarding how you give people the incentive to innovate, work hard, and create wealth. Of course everyone over 21 realizes that governments don't create wealth, they gather the wealth a society generates, and are supposed to use it to protect and improve the conditions of that society or nation (in theory). In Europe we have a Capitalist economy as in America, however most European nations have higher direct taxation and they use a lot of this money for public services, social welfare payments, and pension schemes. The question is, does this put a brake on people's desire to get on and make money and create new businesses and wealth?

My answer would be no, if you look at the EU, it is the world's largest single economy, it has many of the world's leading companies, and lots of bright educated hungry people who are very interested in making money and getting on. If the European model was the disaster that right-wing free-maketeers make out, this wouldn't be the case. There are economic arguments about the degree to which different economies grow etc, but generally I think that the European model gets the balance more or less right between social capital and actual Capital itself.


Of course, you have a point, but one can only wonder how much better it might be without the high taxes and high dependence on the government. Is it productive to have a more or less job for life policy and marching in the street when there are layoffs required for the long term good of an organization? If is in everyone's best interest to have workers report to work and be paid for doing nothing (as I know they do at at least one Fiat plant in Sicily. This policy with the UWA is one of the reasons that GM is in so much trouble. On the other hand, why would workers support changing that, they are dependent on such social welfare.

Galbally;1169106 wrote: 3. Obviously in recent times there has been a lot of talk about this, and most Western governments have been living beyond their means to one extent or another. Some however are better than others, and always its vital that those in power limit their ambitions based on the resources available. And thats the case whether the money is being used to fund global geopolitical hegemony, or lavish social welfare systems and public services. Obviously the numbers you have quoted speak for themselves about which government has been more responsible about borrowing in recent times.


No argument here. The US has been very irresponsible and continues to be so and I fear accelerating as well. My concern is where this is all heading. If we don't get our act in order there will be no money to solve many of the very serious long term social problems like Social Security and Medicare. American people don't want the truth and politicians are quite content not providing it. I am bit of a pessimist here. I see a steady decline in the status of the US and a declining ability to be productive, innovate and grow the economy. there will be such a drag on us all in the years ahead to pay for what we are doing now, I can't see how it will work. I hope I am wrong, but a lot of people a lot smarter and more knowledgeable than I am seem to hold the same view.

Galbally;1169108 wrote: 4. America has been the world's single most powerful, wealth, and militarily powerful nation since 1945. Inevitably, that position has resulted over time with the US being massively involved across the globe in terms of economic interests, military interventions, alliances, emnities, etc etc. As the British found in the early 20th century, with supreme power, comes supreme responsibilities and very, very high costs.

The only real question is what sort of posture the US wishes to maintain in the world and what its prepared to pay for it. The facility to borrow to maintain its geopolitical position will no longer be viable, but that doesn't mean the US has to give up global leadership, just perhaps that it should be more wise in how it uses its resources in the future. What does seem clear to me, is that many, many Americans seem to make no link between their own domestic lives in the US, the news from abroad they may get to hear, and the positions its country takes in the world on various issues. If America wants to remain the best, strongest, and most powerful nation that will have to change, and the internal naval gazing will have to stop.


Right again and I have to be honest with you until I started blogging on this site and traveling a bit in Europe I had a very naive and limited view of the rest of the world. You all have opened my eyes and given me a lot to think about. We Americans are arrogant and pampas. Our economic impact is declining and we are in the process of making a long term if not permanent change in our life styles and spending and saving and that will be painful.

But, I know I do not understand why we seem to be the ones taking the brunt of military action in the world. Not talking about Iraq but if there are any wars that are just and necessary for the long term good of the global society, why does America seem to pay a higher price than other counties, especially European countries? It would seem that what is in the best interest of America from a security point of view is in the best interests of European countries as well. Spain, Italy Great Britain have all been attacked by the same element of society that did 9/11 and yet not only don't I see a response I see easy collapse under such pressure.

QUINNSCOMMENTARY;1169681 wrote: Right again and I have to be honest with you until I started blogging on this site and traveling a bit in Europe I had a very naive and limited view of the rest of the world. You all have opened my eyes and given me a lot to think about. We Americans are arrogant and pampas. Our economic impact is declining and we are in the process of making a long term if not permanent change in our life styles and spending and saving and that will be painful.

But, I know I do not understand why we seem to be the ones taking the brunt of military action in the world. Not talking about Iraq but if there are any wars that are just and necessary for the long term good of the global society, why does America seem to pay a higher price than other counties, especially European countries? It would seem that what is in the best interest of America from a security point of view is in the best interests of European countries as well. Spain, Italy Great Britain have all been attacked by the same element of society that did 9/11 and yet not only don't I see a response I see easy collapse under such pressure.


Its late and I can't answer all of your points, which are well made. I will say that I totally agree with you, that Europeans need to understand that the days of being able to lecture Americans about morality, while being comfortably protected by being in a military alliance with the US are over as well.

Most European governments already understand that we will either have collective Western Security or we will have none; and this means that Europe is going to have to be far more involved militarily in protecting itself, and its American allies. However, the general population are not really fully aware of the reality and think that they will be able to remain comfortable and safe, while also not having to get their hands dirty themselves, this is no longer an option, America cannot do everything and it cannot protect us from what is coming. There is a strong aversion to war in Europe, which is understandable, given our history, but I think we are entering a new era where we either are going to learn that you must on occasion fight for what you have, or it will be taken from you.

QUINNSCOMMENTARY;1168710 wrote: But a large percentage of the population works for the state.


So what? Admittedly it can to too far that way as at the of the day you do need some way to generate wealth. A large percentage of Americans also work for the state or rely on state bodies for their business but you don't perceive it that way-just look at the size and importance of your defence industries. What is the military of not a state owned industry?

In a UK context we are just finding out why a service economy relying heavily on financial services is a very bad idea. It's not the public sector that has got us in to this mess but a perverted view of what industry actually is. The banks can help but at the end of the day it is not bankers that generate real wealth in the economy.

But, I know I do not understand why we seem to be the ones taking the brunt of military action in the world. Not talking about Iraq but if there are any wars that are just and necessary for the long term good of the global society, why does America seem to pay a higher price than other counties, especially European countries?


Different perceptions of what military action is necessary for the long term good of society. Warfare is a last final resort when all else fails. The notion that you can have limited war or a just war is not one that has a great deal of credibility in Europe. IMO

posted by galbally

There is a strong aversion to war in Europe, which is understandable, given our history, but I think we are entering a new era where we either are going to learn that you must on occasion fight for what you have, or it will be taken from you.




Indeed there is a strong aversion and there are also many who take a preference for not going to war as being a sign of weakness in a culture just as many who believe being tolerant is also weak and namby pamby. I perceive it rather as an appreciation that going to war is not a limited option and warfare for narrow geopolitical benefits is an asinine thing to do. Any war in europe will eventually be total in scope people are intelligent enough to realise that and are not taken in by politicians rattling sabres.