Free market and global competition require a strong social safety net. Agree?

[yllus]

I saw this tweet from David Frum a couple of days ago:

Facts are: the right response to global competition is a thicker system of social provision inside the US, eg Romneycare

I haven't read much about this "fact" yet (but am attempting to), but it struck a chord within me. It makes sense: You need that constructive/destructive power of capitalism to be unhindered as it makes and remakes industries to be better and better. At the same time, you need to factor in the human element and the knowledge that progress often means putting large swaths of the population out of work.

Currently through a mix of legislation and unionization, we hinder this "creative destruction" because change inevitably means job losses. However, with a stronger social safety net, we could let loose a bit more and not have to worry about the job element as much. Any thoughts?

 

[a777pilot]

A safety net is fine but it seems more like it has become a hammock.

 

[MooseNSquirrel]

Ive got your man for you:

http://en.wikipedia.org/wiki/Ken_Galbraith

I highly recommend reading the following:

http://en.wikipedia.org/wiki/The_Great_Crash,_1929

Krugman and Friedman are harsh critics of Galbraith, but given our recent economic troubles, he's probably laughing in his grave.

 

[Atreus21]

Provided we can afford it, maybe.

 

[sm625]

Disagree.

The stronger the safety net, the more incentive there is to fall into it.

But even more importantly is the effect of risk/reward on the psyche. With a safety net you may take more risk, but there is a much greater chance of failure. The risk you take without a safety net comes from greater confidence and more planning. Better ideas and stronger execution are the result. This has been documented quite well in the realm of psychology.

People dont dump billions of their own money into companies like Solyndra if it is actually their own money...

 

[Infohawk]

It depends on the details and there are other considerations.

It's not enough to give people some state income. Most people want to work and feel useful. With free trade, it doesn't seem like there will be enough jobs in the West until wages reach equilibrium with the third world.

Other issues are that trade with totalitarian dictatorships is inherently bad and that shifting entire industries to said dictatorships is dangerous from a national security standpoint.

Of course, the libertarian solution is self-destructive and simply unrealistic.

 

[QuantumPion]

Most people want to work and feel useful.

Reality proves you wrong. There is a level of safety net where given the choice, a large fraction, possibly a majority, of the population would chose to live a life on welfare/unemployment/disability than work for a living. We are at that level now.

 

[Infohawk]

Reality proves you wrong. There is a level of safety net where given the choice, a large fraction, possibly a majority, of the population would chose to live a life on welfare/unemployment/disability than work for a living. We are at that level now.

There are exceptions, but I don't think most people are choosing unemployment or disability over working. There aren't enough jobs now. Is it really that hard to believe that most people use support programs because they have to?

 

[sandorski]

This became a necessity the day we moved from an Agricultural based Economy.

 

[a777pilot]

To paraphrase Milton Friedman: When you pay people to be poor, you will have lots of poor people.

 

[QuantumPion]

There are exceptions, but I don't think most people are choosing unemployment or disability over working. There aren't enough jobs now. Is it really that hard to believe that most people use support programs because they have to?

Yes, because as the numbers show, most people are magically able to find a job right when their benefits expire. Give people 99 weeks of unemployment and they will stay unemployed for 99 weeks.

 

[Infohawk]

Yes, because as the numbers show, most people are magically able to find a job right when their benefits expire. Give people 99 weeks of unemployment and they will stay unemployed for 99 weeks.

What are these numbers? What about the ones that don't "magically" find a job?

 

[Incorruptible]

These social safety nets are a giant waste of money and must be ended, they only hurt people

 

[DaveSimmons]

No one wants to pick apples. But with 2+ years of paid vacation via my tax dollars and deficit spending, no one has to.

I agree that it makes sense to have some kind of safety net, but I disagree with the left on how all-enveloping it needs to be.

 

[Jaskalas]

Free market and global competition require a strong social safety net. Agree?

The stronger our safety net, the more expensive our workers are. With expensive labor we continue to lose any chance of competing with Chinese labor, or other nations with third world conditions, no safety net, and cheap labor.

Our safety net drives consumer prices, which drives outsourcing.

 

[Infohawk]

The stronger our safety net, the more expensive our workers are. With expensive labor we continue to lose any chance of competing with Chinese labor, or other nations with third world conditions, no safety net, and cheap labor.

Our safety net drives consumer prices, which drives outsourcing.

Are you willing to take one of those cheap labor jobs? Why would anyone want to reduce their standard of living that dramatically as long as any alternatives exist?

 

[feralkid]

Reality proves you wrong. There is a level of safety net where given the choice, a large fraction, possibly a majority, of the population would chose to live a life on welfare/unemployment/disability than work for a living. We are at that level now.

Unfortunately, given the choice, a large fraction, possibly a majority, of the population would choose to believe this lie.

 

[Phokus]

Disagree.

The stronger the safety net, the more incentive there is to fall into it.

But even more importantly is the effect of risk/reward on the psyche. With a safety net you may take more risk, but there is a much greater chance of failure. The risk you take without a safety net comes from greater confidence and more planning. Better ideas and stronger execution are the result. This has been documented quite well in the realm of psychology.

People dont dump billions of their own money into companies like Solyndra if it is actually their own money...

If we had universal healthcare when i got out of college, i (and many others) would have strongly considered starting my own business. But because that option wasn't available, and i wasn't going to risk catastrophic health consequences, i went to work for industry instead.

 

[JockoJohnson]

Are you willing to take one of those cheap labor jobs? Why would anyone want to reduce their standard of living that dramatically as long as any alternatives exist?

Exactly. When the alternative is to live off of unemployment or welfare, why would I want to work a job that pays less. Either remove the safety net or make it harder to be on welfare/unemployment. Lower payout for welfare, shorten term for unemployment.

 

[Genx87]

Are you willing to take one of those cheap labor jobs? Why would anyone want to reduce their standard of living that dramatically as long as any alternatives exist?

Arent we already lowering our standards of living by putting people on welfare rolls instead of facing reality? I see a problem with our country that people believe because they are American they deserve a 20+ dollar an hour job regardless of economic benefit. So the issue becomes. Do we as a nation want to fund these expectations via a welfare state? Or let reality bring wages down and have people work? We all acknowledge we cant compete in a global market for labor overpaying people.

 

[Infohawk]

Arent we already lowering our standards of living by putting people on welfare rolls instead of facing reality? I see a problem with our country that people believe because they are American they deserve a 20+ dollar an hour job regardless of economic benefit. So the issue becomes. Do we as a nation want to fund these expectations via a welfare state? Or let reality bring wages down and have people work? We all acknowledge we cant compete in a global market for labor overpaying people.

I'd still like my question answered. My hunch is that the people advocating this think they are safe from having to work for pennies.

On your points, I don't believe those are our only two choices although if I have to choose between your choices, I think the option with safety nets is preferable. I don't believe we have to trade with dictatorships, but if we do the costs should be spread to all citizens, not just

 

[Genx87]

If we had universal healthcare when i got out of college, i (and many others) would have strongly considered starting my own business. But because that option wasn't available, and i wasn't going to risk catastrophic health consequences, i went to work for industry instead.

Do you have a pre condition? When I got out of college and didnt have a job because the internet crash + 911 made it tough finding a tech job. I had the opportunity to purchase a 500 dollar deductible plan that cost me 78 bucks\month at the age of 23 through blue cross blue shield.

Claiming this stopped you from starting a business seems odd to me. Especially since you would have used that expense as a write off from the business.

 

[Genx87]

I'd still like my question answered. My hunch is that the people advocating this think they are safe from having to work for pennies.

On your points, I don't believe those are our only two choices although if I have to choose between your choices, I think the option with safety nets is preferable. I don't believe we have to trade with dictatorships, but if we do the costs should be spread to all citizens, not just

I am not advocating anything. I honestly dont have an answer. But realize there are tough decisions we as a country need to make when it comes to competing on a global scale. We can try to hide our markets from the reality of the situation via subsidizing them or let them compete.

 

[Infohawk]

We can try to hide our markets from the reality of the situation via subsidizing them or let them compete.

There are tough choices, but it's not only about safety nets vs. no safety nets. Or we could limit trade with certain countries. We didn't trade with China post-war and yet the economy was roaring.

 

[Phokus]

Do you have a pre condition? When I got out of college and didnt have a job because the internet crash + 911 made it tough finding a tech job. I had the opportunity to purchase a 500 dollar deductible plan that cost me 78 bucks\month at the age of 23 through blue cross blue shield.

Claiming this stopped you from starting a business seems odd to me. Especially since you would have used that expense as a write off from the business.

Yes, i had mild asthma in college (although it cleared up later in adulthood) and that's a pre-existing condition for many plans. With universal healthcare, nobody with pre-existing conditions would be excluded.

And besides that, when you start a business from scratch, you're eating ramen noodles, even $78 a month is a lot at first, much less paying a $500 deductible.