Austrian Economics vs. Keynesian Economics in Axis and Allies

For welfare, the incentive to work is to earn more, since unemployment benefits are less I think than MW.

For MW, I’m not sure that’s empirically true, and I think different studies conflict with each other.

Less government is all well and good, but of course, we need a gov’t for the military, infrastructure, ans, as some argue, health care, economic crises, and a social saftey net

Not if welfare is set at too high a point - it is a catch-22.

For many parts of the country, the standard of living is low enough that welfare is a comparable substitute. Think about it - Welfare pays $1500 a month, while a job pays $2300 (both examples).

After taxes, transportation costs, time involved in commuting, AND time spent working is factored in - which would you rather do?

In many cases, welfare pays MORE than a comparable job that welfare recipients could earn. I am speaking from personal experience, by the way… I have met several people who have turned down job offers to remain on welfare.

We agree on the basics of Government - Military, Infrastructure. The rest is a pure power grab.

I see. But on the other hand, since there is a natural unempoyment of 5-6%, if you remove too much, people will stay poor. The challenge is finding the correct amount, and this is subject to change over time.

There will always be temporary unemployment - people changing jobs, getting more education, temporary layoffs. The key is to minimize permanent unemployment, which is devastating to an economy.

Feel free to message me at any point if you have any questions about any economic issue - the subject is extremely important and affects each one of us, every day of our lives.

I think we agree that we need some government and some welfare, we just disagree on how much. It’s interesting that many people whose beliefs seem very different(e.g. conservatives and liberals) agree on things, but disagree on the degree.

I disagree. ANY government welfare is just doing what private individuals should be doing. It is charity. But when government does it means bigger bureaucracy and more wasted money, plus the government is less involved in deciding who really needs help (if they are more involved, it just means MORE money spent on desk workers and such) since it is so large scale. Plus when charity is run by the government, it gets viewed as a right, rather than a gift. People no longer see a need to fix their situation and just depend on the government. Also, welfare violates the rights of citizens. It forces people to “donate” to “charity” whether they like it or not in the same way the Social security violates people’s property rights by forcing them to pay for other people’s retirements.
Welfare is essentially the ends of a path of selfishness. People no longer want to help others by giving to charity or other ways, so they depend on the government to do it. The people that need help then demand it from the government rather than working to solve their problems.

The government is there to administer the money so that donations made in California can get to Louisiana.

Some people can’t fix the situation; i.e. they can’t get a job no matter how hard they try. They don’t just sit around doing nothing.

Let me ask you: how does a poor person solve his illness if he can’t afford health care?

Also, you say private individuals SHOULD be giving help. I completely agree with that. Unfortunately, they don’t and thus we have to force them to do so.

@calvinhobbesliker:

The government is there to administer the money so that donations made in California can get to Louisiana.

Or rather into a bureaucrat’s pocket.
@calvinhobbesliker:

Some people can’t fix the situation; i.e. they can’t get a job no matter how hard they try. They don’t just sit around doing nothing.

As much as I think they should find something better to do, even the people that beg at street corners are doing something. And they seem to be getting by. Many people say can’t when they are really just too proud to take a minimum-wage job. I have worked one - it is not fun, but you got to do what you got to do.
@calvinhobbesliker:

Let me ask you: how does a poor person solve his illness if he can’t afford health care?

There are people that have diseases that they cannot get cured, not because there is no cure, but because the procedure costs ridiculously too much. If the government were to pay to get everyone out of their wheelchairs everyone would go broke (or more accurately, the government would collapse from debt) I think there are expensive treatments to spinal issues that the average person cannot afford. Where do we draw the line? Right at the start. People can get inexpensive drugs at places like Wal-mart and Costco. Even if they couldn’t get everything they needed, it still wouldn’t help for the government to get into health care. History (and Europe) has shown us that the more the government gives away health care, the less the people get. Take England for example. Even for time-urgent procedures, people often have to wait in 6 month waiting lists (or even waiting lists to get on the waiting list - yes, I’m serious). This can result in loss of limb use, extended severe pain, and even possibly death. Why does this happen? Because the people demanded that the government pay for their health care so the doctors are all busy with people that do not really need to go to the doctor.
@calvinhobbesliker:

Also, you say private individuals SHOULD be giving help. I completely agree with that. Unfortunately, they don’t and thus we have to force them to do so.

Who are you to determine that it should be someone else’s money to solve poverty rather than your own? Even were welfare a good thing, supporting it is a waste of time and money. You would do better to rally people to donate to help the poor than to rally people to vote to get the government to take from others to give to the poor. Your one voice and your actions giving and working to help the poor will do more than your one voice supporting welfare. When it comes down to it, supporting welfare is not all that compassionate as is portrayed. It is really just another form of selfishness. If the over 50% of people that support welfare were instead to actually do something to help the poor, we would have no “need” for welfare. However, they would rather force others to “help” the poor and use the government as their excuse for not doing anything much like Scrooge in “A Christmas Carol” -

“At this festive season of the year, Mr. Scrooge,” said the gentleman, taking up a pen, “it is more than usually desirable that we should make some slight provision for the poor and destitute, who suffer greatly at the present time. Many thousands are in want of common necessaries; hundreds of thousands are in want of common comforts, sir.”
“Are there no prisons?” asked Scrooge.
“Plenty of prisons,” said the gentleman, laying down the pen again.
“And the Union workhouses?” demanded Scrooge. “Are they still in operation?”
“They are. Still,” returned the gentleman, “I wish I could say they were not.”
“The Treadmill and the Poor Law are in full vigour, then?” said Scrooge.
“Both very busy, sir.”
“Oh! I was afraid, from what you said at first, that something had occurred to stop them in their useful course,” said Scrooge. “I’m very glad to hear it.”
“Under the impression that they scarcely furnish Christian cheer of mind or body to the multitude,” returned the gentleman, “a few of us are endeavouring to raise a fund to buy the Poor some meat and drink, and means of warmth. We choose this time, because it is a time, of all others, when Want is keenly felt, and Abundance rejoices. What shall I put you down for?”
“Nothing!” replied Scrooge.
“You wish to be anonymous?”
“I wish to be left alone,” said Scrooge. “Since you ask me what I wish, gentlemen, that is my answer. I don’t make merry myself at Christmas, and I can’t afford to make idle people merry. I help to support the establishments I have mentioned: they cost enough: and those who are badly off must go there.”
“Many can’t go there; and many would rather die.”
“If they would rather die,” said Scrooge, “they had better do it, and decrease the surplus population. … It’s enough for a man to understand his own business, and not to interfere with other people’s. Mine occupies me constantly. Good afternoon, gentlemen!”

Welfare is just an excuse for people not to help the poor. It is merely a way to ease people’s conscience so they won’t feel bad about the people starving around them. Your signature says, “while they prate of economic laws, men and women are starving.” But I say to you, while you prate about welfare being the answer, men and women are starving. What are you doing to help them?

Wel, when I get a job(I’m 16), I’ll be paying taxes for the welfare.

And the waiting list thing. No they don’t. They can prioritize. More urgent procedures are done 1st. In the UK, I think 93% like their health care.

Apparently, 50% support welfare, but I’m the only one on AA.org that will defend it? Something is wrong in this picture.

I have a question, wilson. Are you an anarchist?

Also, about the gov’t collapsing from debt if they provide HC,

it might work if we scale down are military spending which is larger than the next 14 nations’ combined.
Our gov’t is 13 trillion of dollars in debt, it hasn’t collapsed yet(probably due to Keynesian influences which allow it to defecit spend).

@calvinhobbesliker:

Also, about the gov’t collapsing from debt if they provide HC,

it might work if we scale down are military spending which is larger than the next 14 nations’ combined.
Our gov’t is 13 trillion of dollars in debt, it hasn’t collapsed yet(probably due to Keynesian influences which allow it to defecit spend).

Hasn’t collapsed yet

They thought the Titanic was unsinkable - they thought the Hindenburg was a great idea - they thought the Internet boom was going to lead to unlimited growth.

Just because something hasn’t happened yet doesn’t mean it won’t. By the way, your second comment is meaningless. Rephrased, it reads:

The drunk driver hasn’t hit anyone on the road yet. This is probably due to his alcoholic tendencies which allow him to drink.

What?

Questions to ponder:

1. What is the ultimate goal of welfare?

2. How do you prevent people from becoming addicted to welfare?

3. How do you prevent politicians from using welfare to buy votes?

4. How do you transform people accustomed to welfare to a working, productive job?

Interesting questions
1. To provide a minimal living condition for all people
2. This is similar to 4. This should be that welfare would give you less than a MW job, but still enough to live with.
3. What exactly is wrong with that? I need this clarification before I answer.

I’m saying the Keynesian spending can PROLONG a collapse, not prevent it. I don’t think we should defecit spend all the time, like we do now.

IL saw this and moved it instead of deleting it

@calvinhobbesliker:

Apparently, 50% support welfare, but I’m the only one on AA.org that will defend it? Something is wrong in this picture.

I think this shows my point. Welfare is based on selfishness. People don’t support welfare because they think it is best for the country. They do it because they don’t want their individual benefits taken away. Politicians offer welfare to as many people as possible to buy their votes and then hide (or lie about in the case of Obama) the tax/debt cost of the programs.

So people wont support it because they don’t believe in it. They just want to keep their benefits so they wont oppose it. I assume you support it because you are at that age where school teachers and society has told you that welfare is good and you just believe them, but you haven’t seen the effects (half of your paycheck taken away, or rather half of the money taken away before it makes the paycheck - welfare is all about the secrecy. You don’t show people the real cost).

@reloader-1:

3. How do you prevent politicians from using welfare to buy votes?

@calvinhobbesliker:

3. What exactly is wrong with that? I need this clarification before I answer.

Are you familiar with the cycle of democracy?
http://www.wrisley.com/cycle.htm

Hmmmm……  Quite the discussion.

Kind of enjoyed the video, Taiko

Never ceases to amaze me how much World War II and its after-effects define the world we live in, and how most people seem to already have no clue about WWII, economics (as has been said here) or government…  And yet nearly everyone (in America) can vote…

Oh, and in reference to a previous comment - American voters don’t really pick their candidates either.  They can be involved in helping them get picked, but it is still largely the parties who are guiding/controlling who the candidates will be who appear on the ballot.  And for many races (president, congressman) there are only 2 real choices.  Democrat.  Republican.

Regarding economics - I have a business degree from a US university, so have had at least 3 courses in economics.  Here’s what I took away from my classes (not what was taught, necessarily - but what I concluded):

1.  Economies are so complicated that, really, even the most brilliant economic minds don’t really know what to do.  There are too many effects at the same time, times change, attitudes and public perception changes, etc etc.
(Continued on new post - scrolling issues…)

(Continuation of previous post, thanks to glitch)

2.  You learn some of the most powerful theories of economics in the first week.  In fact, I learned these in my high school class in the first week.  There is no such thing as a free lunch (basically, everything has a cost).  And the laws of supply/demand and how they affect price.

3.  Governments printing more money is a bad thing.

4.  The Federal Reserve is powerful, somewhat unaccountable to government, and is just plain scary.  And see #1 - no one really knows what they’re doing because they don’t really understand the economy.

5.  More economic activity is a good thing (Keynsian, I guess).  When my goverment gave me a check for $1,800 in 2008 for basically being married with 2 kids, I did what they wanted me to and stimulated the economy (hello, 50" flatscreen TV) and boy, am I glad I did.

6.  It’s really hard to make a living with an economics degree other than being a teacher, to teach economics to other poor unsuspecting souls.

7.  Minimum wage and most other government meddling in the natural laws of economics is counter-productive, or bad.  Price fixing (minimum wage) interferes with the beauty of free markets.

Disclaimer - I’m not making points that I’ll argue or justify.  As I said, these were just things I took away from my economics classes

As far as welfare - The US government currently is transferring wealth from some citizens to others (and back) at a staggering rate.  It’s not just welfare.  It’s through taxes, social security, welfare, and many other ways.  It is common for people making $15-$20 per hour, assuming married with kids, to pay $0 federal income tax.  And the crazy thing is, that most people don’t even realize it.  Anyway, apparently the US government is really good at keeping a high-tech razzle dazzle armed forces, and redistributing wealth from one person to another, and putting people in prison.  Oh, and making lots of rules for everyone to live by.

@calvinhobbesliker:

I have a question, wilson. Are you an anarchist?

You take from a post about helping the poor that I am an anarchist? Seriously?  :|

@calvinhobbesliker:

Also, about the gov’t collapsing from debt if they provide HC,

it might work if we scale down are military spending which is larger than the next 14 nations’ combined.
Our gov’t is 13 trillion of dollars in debt, it hasn’t collapsed yet(probably due to Keynesian influences which allow it to defecit spend).

Our military spending is nothing compared to our welfare spending.
Keynesian influences may delay collapse, but they just make the collapse worse (or prolong it and leave us with a huge debt in the case of the new deal)

sigh at the risk of sounding like a conspiracy theorist, here is why the US has not collapsed yet. Normally nations collapse when their debt reaches about 50% of their GDP; Greece was less than that when it collapsed/had the EU take over. Guess how high the US is? The US debt is now over 100% of the US GDP. Why have we not collapsed? Because the rest of the world is buying our debt. Oil, gold, currency exchange (I am not totally sure on the last 2), and many other things are based on the US dollar. If the US economy collapses, oil nations, nations that produce products for the US (like China), and all the nations that already have US debt would be in big trouble (debt is worthless of the currency is worthless). So other nations are basically forced to buy our debt, because if we go down, they are going down. However, it won’t last forever. Eventually, they will stop buying our debt (unless they persist until our debt crashes more than just the US) and unless we have learned to limit our spending, the US economy will collapse. Then China will go, since all the debt they bought off us will be worthless and it will continue like dominoes - a world depression like none other. We may delay it through more Keynesian tactics, but it will happen and the longer it is delayed, the worse it will be. Keynesian economics is like cleaning your room by throwing everything under your bed. Eventually, you will have to clean it, and the longer you wait, the worse it will be.

@ gamerman - I am including social security, medicaid, income tax on a curve, etc. in most of my usage of the word welfare.
As for your flatscreen tv, getting the $1800 is not a good thing. Assuming you are middle class, you will likely have to pay more than that in taxes to pay for giving all those people $1800. Or it is just $1800 * (large fraction of population of US) more debt. That is $1800 of debt that is to be left for your grandchildren to take care of. Imagine telling your grandchild as he gets born, "You were about $10,000 dollars in debt (their portion of the national debt) but now because of this flatscreen, you owe an additional $1800; good luck.