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Thursday, June 30, 2011

Who Benefits from the Benefit System Insanity?

   Anecdotal instance. Among the various ways our benefits system is crazy is that women working over 16 hours get their children's nursery costs paid for. That may be defensible itself, though I suspect that nursery costs are unaffordable purely because of the weight of government regulation, so this subsidy exists to hide a government cost - the net effect to the average recipient being zero or negative but the cost to the taxpayer for both regulators and subsidisers being substantial. However what I have found is that the nursery care is given for the full week, even if the recipient is working only 16 hours!

  So while full time workers are only getting enough to cover the time they need, or less if they or more likely they and their husband, earn a close to average wage, the person on 16 hours, will get the same giving them plenty of entirely free time to go to the hairdresser.

   This is part of a wider problem. While a good welfare system is something a wealthy modern society can provide the complexity and duplication of the system leads to both injustice and very socially damaging incentives.

    If you subsidise anything you will get more of it. This applies to apples, oranges, medical care, windmills and illegitimacy. Our benefit system strongly encourages people, particularly those at the bottom of society, not to get married; not to live with the parent of their children; often not to work; and to take no responsibility for anything. Can society blame those who follow the signals the state has given them? Is any of this in the long term interest of the children, or even of the benefit recipients.

    Many years ago when the Liberal Democrats were a party of ideas (mainly in my father's time) they were supporters of putting all benefits together in 1 negative income tax.
In economics, a negative income tax (abbreviated NIT) is a progressive income tax system where people earning below a certain amount receive supplemental pay from the government instead of paying taxes to the government. Such a system has been discussed by economists but never fully implemented.
     I don't believe they ever officially found an excuse to drop it but it is no longer mentioned. Perhaps the reason it has never been implemented is because THE PURPOSE OF GOVERNMENT IS TO PAY GOVERNMENT WORKERS AND THEIR ALLIES; which means the real purpose of government is to collect the money to pay government workers and their allies and a benefits system which is unnecessarily complicated, bureaucratic an duplicating is exactly what is needed if the purpose is to pay government workers.

     Perhaps there is some other reason. If so at least one of the politicians I am forwarding this to will be able to say what it is. We shall see.

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I had never heard of the concept of NIT burt it is thought provoking. As you say, the reason government is so complex and bureaucratic is to obfuscate and create crapppy jobs for drones.
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