Austrian Economics and the lazy welfare queen

[Peegee]

Consider a marginal government subsidy given either through welfare or negative income tax. Either is valid as both are equally destructive. In the example, the citizen on subsidy receives the market equivalent of eleven dollars per hour. The citizen's market value is irrelevant, but a comparison of various hypothetical value to society can illustrate why the moral agent is lazy.

If the subsidy is worth eleven dollars per hour but the moral agent is worth 10 dollars per hour (the moral agent is uneducated, or unskilled, or young) then there is absolutely no incentive to work as the return on effort results in a loss in revenue.

If the subsidy is worth eleven dollars per hour but the moral agent is worth 13 dollars per hour, then there is still less incentive to work. The agent considers the benefit of employment versus unemployment, and the net benefit is 2 dollars per hour. In most cases this means the moral agent loses money by engaging in employment.

Welfare decreases the utility gained by working, causing people to shift towards more leisure time while still satisfying higher demand priorities. In short, welfare makes any person who receives it, ceteris paribus, "lazy".

[Bunny]

Oh.

You're back.

[Pike]

Peegee I thought you left the internet for good after Ron Paul wasn't elected Supreme Leader of the Known Universe this last November.

I'm keeping this thread in General Chat so we can troll it. (and you)

[Shorty]

Oh, pg. You silly man.

also hi

[Madame Adequate]

Yeah but on the other hand, the evidence shows a guaranteed minimum income is a great idea which doesn't negatively impact the incentive to work, except in college students and single moms, both of whom have better things to be doing than slaving away for minimum wage anyway. In fact, rather than making everyone 'lazy' people ended up working harder because they were able to actually train for jobs they wanted rather than grinding away all their energy just to put food on the table. Turns out what motivates people isn't money, it's satisfaction.

The moral of the story is that welfare should be given to everyone.

The other moral of the story is that even if you adjudge welfare to be evil, letting people become homeless and starve to death is considerably moreso.

The third moral of the story is that paying for all the security, police, prisons, unwanted children, addiction clinics, and so forth which become required after the fact is a lot more expensive than preventing this stuff in the first place. If libertardians want to keep as much of their money as possible they should be avowed social democrats, because it's a lot cheaper in the long run and there will be more people who actually have money to pay for things.

The fourth moral of the story is that PG still has absolutely no idea how the world works and shouldn't be trusted to give advice on painting your nails, let alone economic policies.

[Tigmafuzz]

welfare makes any person who receives it, ceteris paribus, "lazy".

no u

[Peegee]

What did anything of anything I said have anything to do with public policy? I merely explained what will happen when minimum wage and welfare is enforced. Nowhere did I say 'do not use minimum wage' and 'welfare and negative income tax' should be avoided. I only said it was destructive and then proceeded to explain why.

Have you perhaps used a really valid point and i'm impressed by your thinking. (that I'm a libertarian) and argued against it instead of the substance of the post itself?

The cited document where minimum wage did not increase unemployment happened for only two reasons: because the minimum wage imposed by the government was below the market equilibrium of supply and demand, or because people simply decided that working was preferable to collecting welfare subsidy, nothing more.

If you're ever willing to discuss this maturely we can continue from that point.

The rest of the post was completely uncalled for, and as a member of 'Staff' (you too, Pike, wtf. Publicly saying you are going to troll me is against the rules) I must publicly point out your incessant need to insult me and tie in 'libertarian' strawmen and the like. If you simply are unable to respond in a constructive manner the marketplace of ideas will and have made their decisions. They really have.

And no, I'm not butthurt - not even surprised.

Yeah but on the other hand, the evidence shows a guaranteed minimum income is a great idea which doesn't negatively impact the incentive to work, except in college students and single moms, both of whom have better things to be doing than slaving away for minimum wage anyway. In fact, rather than making everyone 'lazy' people ended up working harder because they were able to actually train for jobs they wanted rather than grinding away all their energy just to put food on the table. Turns out what motivates people isn't money, it's satisfaction.

The moral of the story is that welfare should be given to everyone.

The other moral of the story is that even if you adjudge welfare to be evil, letting people become homeless and starve to death is considerably moreso.

The third moral of the story is that paying for all the security, police, prisons, unwanted children, addiction clinics, and so forth which become required after the fact is a lot more expensive than preventing this stuff in the first place. If libertardians want to keep as much of their money as possible they should be avowed social democrats, because it's a lot cheaper in the long run and there will be more people who actually have money to pay for things.

The fourth moral of the story is that PG still has absolutely no idea how the world works and shouldn't be trusted to give advice on painting your nails, let alone economic policies.

[Madame Adequate]

I merely explained what will happen when minimum wage and welfare is not enforced. I only said it was not destructive and then proceeded to explain why.

[Pike]

The rest of the post was completely uncalled for, and as a member of 'Staff' (you too, Pike, wtf. Publicly saying you are going to troll me is against the rules)

You made the thread in General Chat, bro. You should have known what you were in for.

[Peegee]

I merely explained what will happen when minimum wage and welfare is not enforced. I only said it was not destructive and then proceeded to explain why.

I C Wut u did dare

Can we therefore conclude that minimum wage is mandatory across al production levels, or only in particular countries? For example should minimum wage be applied to poor countries where children also need to work as the parent to child ratio is too high? Should it have been applied shortly after the industrial revolution in order to prevent child employment?

My first post was clearly in jest and I hardly expected anybody to attack it so readily. Do you perhaps collect largesse from the state? You do, don't you?

Economics is based upon a simple premise: scarcity. Scarcity's very existence has consequences - namely that any scarce good can only be used by one person at a time, and while that does not necessitate [inserted personal experience's definition of] property rights, it does necessitate haves and haves not.

An example to illustrate scarcity without humans follows: we have organisms in an environment. A subset of the organisms mutate an ability to increase their fitness relative to the remainder of the ecosystem. As a consequence to further action, some of the species goes extinct.

The claim of the welfare and minimum wage supporters is that despite any changes in fitness, that scarce resources be allocated toward those who need it. The assumption inherent in this claim is simply that scarcity is not as limited as claimed, or that scarcity does not exist (that the rich people are keeping all this wealth in the form of paper. God if we only had MORE PAPER TO SPEND we would be MORE WEALTHY)

And no that is not a really valid point and i'm impressed by your thinking. that is a thinly veiled explanation of how the economy does not work.

I'm not even done ripping your nonsense into pieces. The secondary reason why minimum wage and welfare was successful in any scenario was that THE CITY OR STATE WAS ABLE TO AFFORD IT. And I don't mean the central banks printing money and giving it to the banks to loan out to rich people so poor people who can only spend federal reserve notes lose the value of their savings (gasp I'm against the bank?), but whether there's enough to go around.

If we have no money, it doesn't matter if we print more money to give to you. Using inflated money to buy things only results in a mad dash by everybody to buy things until there's no more to be bought or the price goes up again. Blame inflation, and central banks. Don't blame greedy people hiding jew gold like Cartman. Seriously the idea that savers hurt the economy...dear God has economics been so grossly misunderstood?

A final explanation on scarcity follows instead of what this thread should have been: a series of troll posts saying how it's awesome to receive largesse from the state because then people can afford to buy toys and junk food and video games and cell phones. Oh I didn't even make the thread about how capitalism has given us the best gadgets

In practice a socialised service increases the demand for the product to everybody who potentially could want it. Economics defines 'demand' as the ability to pay for a product or service. Whether demand is paid for by the act of theft or the act of voluntary exchange using money or barter, Say's law compels you to acknowledge that the repayment of the product must be made by productive acts.

In other words, if you cannot afford a Lamborghini and will not act to try to steal it / get it another way, you effectively have no demand for the car. You may say 'it would be sweet if I could drive one' but will never act on that imaginary end.

By socialising a good, the demand for the product increases. However the supply for a socialised good is still subject to scarcity. For health care, that scarcity comes largely in the form of manpower - there are simply not enough doctors in most countries with socialised healthcare to deal with everybody at once. This is why the wait time for healthcare in countries (like mine, Canada) are so high for certain services.

[Shorty]

pg: returns and in 14 hours, this is what happens

[Peegee]

It's not my fault. I expected Pike to go I SPENT ALL MY MONEY ON VIDEO GAMES AND MOUNTAIN DEW U MAD BRO???

and then i would play along and go 'FFUUUUUU PIKE HOW DARE YOU LIKE DIFFERENT THINGS WHY ISN'T YOUR HIERARCHY OF WANTS AND NEEDS THE SAME AS MINEE????'

Then I would use Pike as a scapegoat for why socialism doesn't work and everybody would be going 'oh that pg.mp3'

Instead look what happened. Now I have to talk about boring economics.

[Shorty]

You began talking about them in the first post of this thread, silly!

It's teasing, you crazy bean. You know I love you <3

[Pike]

It's not my fault. I expected Pike to go I SPENT ALL MY MONEY ON VIDEO GAMES AND MOUNTAIN DEW U MAD BRO???

I don't have any money right now brah

work keeps cutting my hours and my W-2s aren't here yet so I can't even get my refund. (which I will in fact spend on video games and Mountain Dew)

[Peegee]

no I didn't.

ilu2

It's not my fault. I expected Pike to go I SPENT ALL MY MONEY ON VIDEO GAMES AND MOUNTAIN DEW U MAD BRO???

I don't have any money right now brah

work keeps cutting my hours and my W-2s aren't here yet so I can't even get my refund. (which I will in fact spend on video games and Mountain Dew)

'FFUUUUUU PIKE HOW DARE YOU LIKE DIFFERENT THINGS WHY ISN'T YOUR HIERARCHY OF WANTS AND NEEDS THE SAME AS MINEE????

SEE THIS IS WHY SOCIALISM WON'T WORK PIKE AND I LIKE DIFFERENT THINGS HUX COME UP WITH A SYSTEM OF DISTRIBUTION OF GOODS THAT HAS ECONOMIC CALCULATION BUILT INTO IT AND IS FAIR AND JUST AND ADDRESSES THE VIDEO GAMES THAT PIKE AND I DON'T LIKE BUT HAVE TO SHARE