Burton - "Welfare keeps the economy ticking"

nesf

Tea drinker wrote: »

She's still banging the drum.


and

I just don't get it her argument.

http://www.irishtimes.com/business/economy/ireland/cutting-welfare-by-440m-would-deflate-economy-burton-1.1473557

There is the argument that money you take in in tax and then give out as welfare is more likely to be spent in the economy than if you hadn't gathered it in taxation. It's somewhat more likely to be saved not spent and with the current credit famine money in banks isn't being lent out in large amounts which means saved money doesn't generate as much economic activity as it would in more normal economic times.

All fine. The thing is, taxes aren't being cut to cut this welfare spend, we're just going to borrow less money in order in exchange for this cut. This complicates it hugely, because less money borrowed means smaller repayments, which means less money leaving the economy after it's been gathered by taxation. More money borrowed today means less money available for spending next year. So, it's not as simple a picture as the first paragraph.

Sand

I think arguing the merits of Burton's argument is missing the point. Burton (and Labour) want to increase or preserve social welfare spending. Their arguments will vary with economic conditions - if the fiscal situation is rosy, then increasing social welfare becomes a matter of social justice. If the fiscal situation is dire, then its a Keynesian stimulus. But for every day there's an argument for increasing social welfare.

The only constant is that Burton and Labour want to increase social welfare so they can buy votes. That Burton's claims about a stimulus effect are nonsense isn't important - its just an excuse to avoid reform of social welfare. That's the key point.

spank_inferno

Sand wrote: »

I think arguing the merits of Burton's argument is missing the point. Burton (and Labour) want to increase or preserve social welfare spending. Their arguments will vary with economic conditions - if the fiscal situation is rosy, then increasing social welfare becomes a matter of social justice. If the fiscal situation is dire, then its a Keynesian stimulus. But for every day there's an argument for increasing social welfare.

The only constant is that Burton and Labour want to increase social welfare so they can buy votes. That Burton's claims about a stimulus effect are nonsense isn't important - its just an excuse to avoid reform of social welfare. That's the key point.

Sure it may be about votes.... however "reform" (ie: reducing) doesn't help those dependent on it.

considering the 'dole' makes up less than 1/4 of the total S/W budget, wholesale "reform" will hurt all people.

nesf

spank_inferno wrote: »

considering the 'dole' makes up less than 1/4 of the total S/W budget, wholesale "reform" will hurt all people.

I was curious about the numbers so some of the big spenders in the Social Protection budget (13 Billion total):

Jobseeker's Allowance: 3 Billion
Penions (State Non-Contributory): 950 million
One Parent Family: 979 Million
Disability: 1.1 Billion
Child Benefit 1.9 Billion
Rent Supplement: 400 Million
Community Employment: 350 Million

Admin for the Dept: 500 Million


Jobseeker's is a far large piece of that pie than any other program.

Under a broader look at the department's spending (which includes other pension payments), all forms of pension cost us 6.4 Billion with is over 1 billion larger than our total spend on Working Age Income Supports (which would include the dole, Single Parent's etc).


Details and the other programs on page 71 here: http://budget.gov.ie/Budgets/2013/Documents/Expenditure%20Report%202013%20Part%20IV.pdf

Farmer Pudsey

spank_inferno wrote: »

Sure it may be about votes.... however "reform" (ie: reducing) doesn't help those dependent on it.

considering the 'dole' makes up less than 1/4 of the total S/W budget, wholesale "reform" will hurt all people.

It is the ''dole'' part that has the most effect on the economy. It along with the high rate of people receiving disability, carers and single parent allowance discourage some sections from looking for or accepting low paid work. The benefits often meant that it pays people to work the system especially at certain stages of life. If you can have a comfortable lifestyle from cradle to grave then why work.

For instance the difference between contributory and non contributory is minimal so there is no incentive to work even for than if you are on a low income. The way if you are on welfare that you are looked after is a huge disincentive to look for work even if it is available.

hmmm

nesf wrote: »

Admin for the Dept: 500 Million

Dear god.

GCU Flexible Demeanour

nesf wrote: »

I was curious about the numbers so some of the big spenders in the Social Protection budget (13 Billion total):

Jobseeker's Allowance: 3 Billion
Penions (State Non-Contributory): 950 million
One Parent Family: 979 Million
Disability: 1.1 Billion
Child Benefit 1.9 Billion
Rent Supplement: 400 Million
Community Employment: 350 Million

Admin for the Dept: 500 Million


Jobseeker's is a far large piece of that pie than any other program.

Under a broader look at the department's spending (which includes other pension payments), all forms of pension cost us 6.4 Billion with is over 1 billion larger than our total spend on Working Age Income Supports (which would include the dole, Single Parent's etc).


Details and the other programs on page 71 here: http://budget.gov.ie/Budgets/2013/Documents/Expenditure%20Report%202013%20Part%20IV.pdf

That's the net budget (i.e what's paid out of tax, not inclusive of the Social Insurance Fund.)

The Social Insurance Fund adds about another €6 billion. DSP total spend is about €20 billion. Largest single item is the Social Insurance Pension, which costs €3.8 billion (or about 20% of gross spend.)

carpejugulum

Unpaid court fines will not be deducted from welfare

However proposed legislation published on Friday shows that money will only be deducted from wages or occupational pensions but not from benefits.
...
It said this was due to the cost of administering the deduction of fines, and because social welfare rules meant only around €2 a week could be deducted.

Why did they not change the "rules"?

hmmm

The 1.1 billion for disability jumps out at me, along with the outrageous cost of running the department. I know in the UK there have been major crackdowns on those claiming disability - in parts of the country large percentages of the population were registered as disabled (note, I've no problem with payments to the genuine cases).

As for the one parent family payment, well, I won't get started.

nesf

GCU Flexible Demeanour wrote: »

That's the net budget (i.e what's paid out of tax, not inclusive of the Social Insurance Fund.)

The Social Insurance Fund adds about another €6 billion. DSP total spend is about €20 billion. Largest single item is the Social Insurance Pension, which costs €3.8 billion (or about 20% of gross spend.)

Yeah I mentioned that at the bottom with the reference to pensions.

nesf

hmmm wrote: »

The 1.1 billion for disability jumps out at me, along with the outrageous cost of running the department. I know in the UK there have been major crackdowns on those claiming disability - in parts of the country large percentages of the population were registered as disabled (note, I've no problem with payments to the genuine cases).

As for the one parent family payment, well, I won't get started.

I've heard some true horror stories about that. They got a private company to do the interviewing for it, at least one nurse came forward as a whistleblower. She'd worked as a psychiatric nurse for over a decade, she had strict instructions not to mark any patient as depressed (and thus eligible) if they smiled during the interview. She said she was looking at people, that she knew from her previous work experience, were quite profoundly depressed, yet because a slight smile appeared when their family pet was mentioned she had to mark as ineligible. There were other nonsensical requirements mentioned by her but I forget them.

nice_guy80

nesf wrote: »

I've heard some true horror stories about that. They got a private company to do the interviewing for it, at least one nurse came forward as a whistleblower. She'd worked as a psychiatric nurse for over a decade, she had strict instructions not to mark any patient as depressed (and thus eligible) if they smiled during the interview. She said she was looking at people, that she knew from her previous work experience, were quite profoundly depressed, yet because a slight smile appeared when their family pet was mentioned she had to mark as ineligible. There were other nonsensical requirements mentioned by her but I forget them.

one parent family - widespread abuse.

disability - what qualifies?

nesf

nice_guy80 wrote: »

one parent family - widespread abuse.

disability - what qualifies?

Varies a lot. I know one guy who was on disability, now on Invalidity, who has spent around six months of the year in psychiatric hospital every year for the past decade. I really have no problem with him getting a payment.

Conversely I've heard anecdotal stories about "bad backs." Don't know of any of these cases personally though, so I can't really say. It'd be naive to think there isn't some level of abuse going on.

maninasia

hmmm wrote: »

The 1.1 billion for disability jumps out at me, along with the outrageous cost of running the department. I know in the UK there have been major crackdowns on those claiming disability - in parts of the country large percentages of the population were registered as disabled (note, I've no problem with payments to the genuine cases).

As for the one parent family payment, well, I won't get started.

The Mystery of Disability...

http://www.davidmcwilliams.ie/2013/04/04/the-mystery-of-disability

nesf

maninasia wrote: »

The Mystery of Disability...

http://www.davidmcwilliams.ie/2013/04/04/the-mystery-of-disability

Odd that he doesn't mention that some increase in "emotional" disability would be expected during a recession caused in part by financial overstretching on behalf of the general populace (huge debts can very easily land a person with serious psychological problems).

OMD

maninasia wrote: »

The Mystery of Disability...

http://www.davidmcwilliams.ie/2013/04/04/the-mystery-of-disability

He also fails to comment that the biggest increase in disability was between 1996 and 2002

KyussBishop

Tea drinker wrote: »

She's still banging the drum.


and

I just don't get it her argument.

http://www.irishtimes.com/business/economy/ireland/cutting-welfare-by-440m-would-deflate-economy-burton-1.1473557

nesf wrote: »

There is the argument that money you take in in tax and then give out as welfare is more likely to be spent in the economy than if you hadn't gathered it in taxation. It's somewhat more likely to be saved not spent and with the current credit famine money in banks isn't being lent out in large amounts which means saved money doesn't generate as much economic activity as it would in more normal economic times.

All fine. The thing is, taxes aren't being cut to cut this welfare spend, we're just going to borrow less money in order in exchange for this cut. This complicates it hugely, because less money borrowed means smaller repayments, which means less money leaving the economy after it's been gathered by taxation. More money borrowed today means less money available for spending next year. So, it's not as simple a picture as the first paragraph.

The argument is really simple: Cuts from public spending reduce the flow of money into the private economy, and dampen private activity.

We need both tax cuts and increases in public spending to get out of the crisis - we can not do that without EU help, because of our current debt yields and treaty obligations.

The solution is already known, the political will within Europe isn't there; Yanis Varoufakis has done an excellent job updating his 'modest proposal', detailing how Europe can do this:
http://yanisvaroufakis.eu/euro-crisis/modest-proposal/

Public spending doesn't automatically equal increased taxes, there are plenty of sustainable options available, just none in Ireland's control.


It's not a question of what's economically possible (it's all possible economically - Europe has all the resources it needs to provide excellent public services, and in general to end the crisis), it's a question of how little Europe gives a toss, about fixing the social issues being caused, by the massive negligent mismanagement of the Euro.


In the end the solutions are actually incredibly simple, but they are clouded by economic theory that doesn't even describe the monetary system correctly (nevermind banks or debt), and ideologues who want to keep the crisis going.

maninasia

nesf wrote: »

Odd that he doesn't mention that some increase in "emotional" disability would be expected during a recession caused in part by financial overstretching on behalf of the general populace (huge debts can very easily land a person with serious psychological problems).

He says he doesn't know what caused it. There are probably some legitimate reasons for the increase, at the same time an increase of disability claims of this scale is suspect.

Burton is a tax and spend politician, which is fairly obvious coming from the Labour camp, that's what they do. They like to tax one group and dole out the largesse to others. It helps to keep them in power and satisfy their core support base.
It may 'stimulate' the economy, in the same manner of gorging on 3 big macs and extra fries may stimulate your bowels.

Farmer Pudsey

If you can get on disability it is muck more rewarding than unemployment. For those with real severe disability these rules are needed. However if you are on disability you are allowed 50K in capital that will not be assessed. The first 120 of earnings are also not assessed. From 120-350 50% is assessed and over 350 all is assessed.

This means that for a single person they can earn over 400 euro before they lose all there allowance. If they work partime they can earn 120 giving them an income of 300/week. before they start to lose. If you are selfemployed you can also draw it under these conditions. You also can qualify for living alone allowance, fuel allowance, free travel etc

nice_guy80

would love to see a breakdown of figures as to the different types of disability

and also by region.

ie are there more people unable to work due to disability in Laois, than say Sligo. Would make for interesting reading.

carpejugulum

Isn't it ironic that mindless consumerism is today's socialists' only policy?

It's about time Labour came up with a solution that doesn't just take money from one group and gives it to another to spend it and something something jobs.

Or to at least stop blocking these solutions.

golfwallah

Isn’t it just great – how a political leader in this little bankrupt country of ours can propose yet more welfare spending as a solution to our economic woes!

Let’s face it, Ireland is broke, living beyond its means and is only kept going through massive borrowings, that will have to be repaid from taxes levied on present and future citizens for years to come. Easy to increase borrowings, spend on keeping a large segment of the population on your side through welfare payments. The problem is, it’s not so easy to repay. And the alternative of default, write-down or repudiation of our loans .... well those options have even nastier downsides.

It’s one thing to increase borrowings for productive activity that will enable us to repay debts in the future but quite another to do so just to prop up day to day spending that has not been earned. That we simply cannot afford it seems totally unacceptable to Minister Burton – the politics of promise (that you don’t have to work for a living in Ireland these days).

As the OP has said, maybe we should go the whole hog and become communists – where the only certainty is an equal share of misery for all.

I think it’s time for some honest straight talking from our politicians rather than the continuing charade of promising a free lunch to stay in power. When will we ever learn?