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middle class welfare (Read 4298 times)
freediver
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middle class welfare
Jun 5th, 2008 at 2:16pm
 
The term 'middle class welfare' has been thrown around a lot over the last few years. Rather than indicating a resurgence of class politics, it reflects an understanding of the role of welfare. Wealthy people (who understand economics) are just as opposed to welfare for themselves as are the traditional recipients.

Government handouts are in general bad for the econonomy, because of the waste they cause and because they tend to skew the economy. The government takes large sums of money from people, wastes a significant portion on bureaucracy, then hands the money back with strings attached. The economy is skewed by the strings attached to the handout, which basically make it like money, but less useful (imagine the government giving you a $50 voucher to spend at maccas instead of $50). They also remove or change a lot of the incentives that underpin market forces.

Handouts are usually justified in one of two ways. They can be justified on the basis that they correct market failures (eg funding research, building roads etc - the sort of thing that a free market would not perform very efficiently). They can also be justified on moral grounds. This is what coveres most of what is typically considered a handout - eg welfare. It is justified because people think it is immoral to let some people to live in squalor or to suffer bad health while the majority of the population has money to waste. They are prepared to sacrifice the economy for these greater causes.

Middle class welfare fails both of these tests. It is not immoral to let someone earning $100 000 go without solar panels, a tank, a baby bonus etc. It is not immoral to force people to rent a house if they cannot afford to buy one.

The reason that even the wealthy tend to (or at least should) oppose handouts that are directed at them is because they would much prefer to not be taxed in the first place than to have the government take their money, waste a lot of it, then hand it back with strings attached. Politicians often get away with it because people think of it as free money and fail to realise the implications to their tax bill. Either that, or they selfishly think of it as a handout 'just this once', which they favour because they are on the recieving end of it while the cost is spread among the broader community.
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deepthought
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Re: middle class welfare
Reply #1 - Jun 5th, 2008 at 3:55pm
 
freediver wrote on Jun 5th, 2008 at 2:16pm:
The term 'middle class welfare' has been thrown around a lot over the last few years. Rather than indicating a resurgence of class politics, it reflects an understanding of the role of welfare. Wealthy people (who understand economics) are just as opposed to welfare for themselves as are the traditional recipients.

Government handouts are in general bad for the econonomy, because of the waste they cause and because they tend to skew the economy. The government takes large sums of money from people, wastes a significant portion on bureaucracy, then hands the money back with strings attached. The economy is skewed by the strings attached to the handout, which basically make it like money, but less useful (imagine the government giving you a $50 voucher to spend at maccas instead of $50). They also remove or change a lot of the incentives that underpin market forces.

Handouts are usually justified in one of two ways. They can be justified on the basis that they correct market failures (eg funding research, building roads etc - the sort of thing that a free market would not perform very efficiently). They can also be justified on moral grounds. This is what coveres most of what is typically considered a handout - eg welfare. It is justified because people think it is immoral to let some people to live in squalor or to suffer bad health while the majority of the population has money to waste. They are prepared to sacrifice the economy for these greater causes.

Middle class welfare fails both of these tests. It is not immoral to let someone earning $100 000 go without solar panels, a tank, a baby bonus etc. It is not immoral to force people to rent a house if they cannot afford to buy one.

The reason that even the wealthy tend to (or at least should) oppose handouts that are directed at them is because they would much prefer to not be taxed in the first place than to have the government take their money, waste a lot of it, then hand it back with strings attached. Politicians often get away with it because people think of it as free money and fail to realise the implications to their tax bill. Either that, or they selfishly think of it as a handout 'just this once', which they favour because they are on the recieving end of it while the cost is spread among the broader community.


Would you be so kind as to define 'middle class' please.
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deepthought
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Re: middle class welfare
Reply #2 - Jun 5th, 2008 at 5:33pm
 
deepthought wrote on Jun 5th, 2008 at 3:55pm:
freediver wrote on Jun 5th, 2008 at 2:16pm:
The term 'middle class welfare' has been thrown around a lot over the last few years. Rather than indicating a resurgence of class politics, it reflects an understanding of the role of welfare. Wealthy people (who understand economics) are just as opposed to welfare for themselves as are the traditional recipients.

Government handouts are in general bad for the econonomy, because of the waste they cause and because they tend to skew the economy. The government takes large sums of money from people, wastes a significant portion on bureaucracy, then hands the money back with strings attached. The economy is skewed by the strings attached to the handout, which basically make it like money, but less useful (imagine the government giving you a $50 voucher to spend at maccas instead of $50). They also remove or change a lot of the incentives that underpin market forces.

Handouts are usually justified in one of two ways. They can be justified on the basis that they correct market failures (eg funding research, building roads etc - the sort of thing that a free market would not perform very efficiently). They can also be justified on moral grounds. This is what coveres most of what is typically considered a handout - eg welfare. It is justified because people think it is immoral to let some people to live in squalor or to suffer bad health while the majority of the population has money to waste. They are prepared to sacrifice the economy for these greater causes.

Middle class welfare fails both of these tests. It is not immoral to let someone earning $100 000 go without solar panels, a tank, a baby bonus etc. It is not immoral to force people to rent a house if they cannot afford to buy one.

The reason that even the wealthy tend to (or at least should) oppose handouts that are directed at them is because they would much prefer to not be taxed in the first place than to have the government take their money, waste a lot of it, then hand it back with strings attached. Politicians often get away with it because people think of it as free money and fail to realise the implications to their tax bill. Either that, or they selfishly think of it as a handout 'just this once', which they favour because they are on the recieving end of it while the cost is spread among the broader community.


Would you be so kind as to define 'middle class' please.



freediver?  Don't want to discuss your post?
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mantra
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Re: middle class welfare
Reply #3 - Jun 5th, 2008 at 6:00pm
 
I know you asked FD - DT, but I'll have a shot.  Middle class would be those workers on maybe $100,000 pa to $250,000 (house & mortgage).   Those on $50,000 to $100,000 (cottage/unit & mortgage) would be lower middle class.  Those on under $50,000 (renting) would be the working poor and those under $20,000 would probably be dirt poor.

The upper middle class would be those on $250,000 to $400,000 and anything over that could be classified as elite.

I hope that answers your question.   Cheesy



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deepthought
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Re: middle class welfare
Reply #4 - Jun 5th, 2008 at 6:34pm
 
mantra wrote on Jun 5th, 2008 at 6:00pm:
I know you asked FD - DT, but I'll have a shot.  Middle class would be those workers on maybe $100,000 pa to $250,000 (house & mortgage).   Those on $50,000 to $100,000 (cottage/unit & mortgage) would be lower middle class.  Those on under $50,000 (renting) would be the working poor and those under $20,000 would probably be dirt poor.

The upper middle class would be those on $250,000 to $400,000 and anything over that could be classified as elite.

I hope that answers your question.   Cheesy



Thanks mate.  I have no idea if this accords with freediver's notion though but assuming it does because he has gone vewy vewy quiet, how do you feel about those on, say, $100,000 not getting benefits like family benefit, baby bonus, child care allowances etc while those on, say, $99,000 getting it all and quite possibly pushing them into the middle class category by virtue of the 'welfare'?
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pope urban 2
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Re: middle class welfare
Reply #5 - Jun 6th, 2008 at 12:36am
 
I think you cant put it in sheer money terms, where you live is the big thing, $100,000 is a lot in the sticks but it aint much in Sydney and Melbourne.
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Re: middle class welfare
Reply #6 - Jun 6th, 2008 at 7:39am
 
pope urban 2 wrote on Jun 6th, 2008 at 12:36am:
I think you cant put it in sheer money terms, where you live is the big thing, $100,000 is a lot in the sticks but it aint much in Sydney and Melbourne.


And how you earn your $100K, I guess. There's a few junkies around who bring in $100,000 and live in a shithouse claiming the dole because it all goes back up their arms.

Not that they'd be declaring income anyway, of course.... or buying solar panels.

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« Last Edit: Jun 6th, 2008 at 8:50am by NorthOfNorth »  

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Re: middle class welfare
Reply #7 - Jun 6th, 2008 at 1:51pm
 
If you are paying tax on your income, you shouldn't be getting handouts as well. The government should just charge you less tax instead. It can get a bit complicated if someone has a few kids, but I'd draw the line at $50 000.
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deepthought
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Re: middle class welfare
Reply #8 - Jun 6th, 2008 at 2:34pm
 
freediver wrote on Jun 6th, 2008 at 1:51pm:
If you are paying tax on your income, you shouldn't be getting handouts as well. The government should just charge you less tax instead. It can get a bit complicated if someone has a few kids, but I'd draw the line at $50 000.


So anyone who earns more than $50k is middle class and should not receive any benefit of any kind?  No baby bonus, first home buyer grant, child care, family benefit etc?
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Re: middle class welfare
Reply #9 - Jun 6th, 2008 at 2:41pm
 
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deepthought
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Re: middle class welfare
Reply #10 - Jun 6th, 2008 at 3:56pm
 
freediver wrote on Jun 6th, 2008 at 2:41pm:


You're not willing to give a yes or no answer to the question?

So anyone who earns more than $50k is middle class and should not receive any benefit of any kind?
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mantra
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Re: middle class welfare
Reply #11 - Jun 6th, 2008 at 4:00pm
 
Quote:
So anyone who earns more than $50k is middle class and should not receive any benefit of any kind?  No baby bonus, first home buyer grant, child care, family benefit etc?


You could make an exception for the first home buyer's grant and child care to encourage women back into the workforce, but as far as the rest of the bribes Howard handed out - they weren't necessary and just gave many of the recipients a chance to over indulge in luxury items.

Most of us survived very well without all the handouts prior to the Howard government - although our local council did give us a tree for each birth and I thought that was pretty generous.

We only had about a $120 billion personal debt in 1996 - now it's $600 billion.  

The handouts have only encouraged people to live beyond their means and driven the cost of living up to ridiculous levels.  Now handouts have come to be expected as a right - when welfare originally was only used for the very needy.

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Re: middle class welfare
Reply #12 - Jun 6th, 2008 at 4:07pm
 
Mantra why would you make an exception for the FHOG? Surely renters are more in need of assistance than people who can afford to buy a house.
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Re: middle class welfare
Reply #13 - Jun 6th, 2008 at 4:09pm
 
mantra wrote on Jun 6th, 2008 at 4:00pm:
Quote:
So anyone who earns more than $50k is middle class and should not receive any benefit of any kind?  No baby bonus, first home buyer grant, child care, family benefit etc?


You could make an exception for the first home buyer's grant and child care to encourage women back into the workforce, but as far as the rest of the bribes Howard handed out - they weren't necessary and just gave many of the recipients a chance to over indulge in luxury items.

Most of us survived very well without all the handouts prior to the Howard government - although our local council did give us a tree for each birth and I thought that was pretty generous.

We only had about a $120 billion personal debt in 1996 - now it's $600 billion.  

The handouts have only encouraged people to live beyond their means and driven the cost of living up to ridiculous levels.  Now handouts have come to be expected as a right - when welfare originally was only used for the very needy.



Hard to argue with any of that from my perspective.

I wouldn't consider my boss, who is on about $250k, "middle-class".  Myself, well, maybe.  I certainly don't think I am entitled to any welfare though...
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Re: middle class welfare
Reply #14 - Jun 6th, 2008 at 4:28pm
 
Quote:
Mantra why would you make an exception for the FHOG?


It must help in some way with legal costs etc - but houses and associated costs were pushed up dramatically when Howard doubled it for a while and finance companies have just been accepting the grant only as a deposit.  We could live without it if we had to.  People need to change their way of thinking and start waiting and planning for the things they want.

Yes renters are oten the victims and some people will never have the opportunity to own a house.  Centrelink gives assistance to those under a certain income - so it should continue for those who need it.

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