9 ms·

I know i pay for these things through taxes, but i think in the end it's cheaper if we handle this through a tax system. No huge corporations looking to improve

by ako 10y ago

I know i pay for these things through taxes, but i think in the end it's cheaper if we handle this through a tax system. No huge corporations looking to improve their profits at the cost of service to customers. I like to think of western-europe as an all-in or full-service country. Maybe you pay a bit more, but you get way better service, and by not having to decide and buy yourself you're left with more of what's really important: free time. Most of what is state provided is fairly high quality: from health-care, to education to infrastructure our government does a pretty good job.

candiodari 10y ago
Australia has exceptional demographics that make this possible - for the moment. It won't last, for the same reason it won't in Europe. But, you get to gloat for quite a while as an Australian, it'll last decades longer than in Europe, where unemployment makes the current situation untenable. To put it bluntly: Australia has a participation rate of 65%, dropping slowly (ie. pretty much perfectly stable for the past, frankly, almost the past century). Europe has a participation rate of 55%. Now you might think that's not a big difference, but it's the difference between 1 worker paying for 50% of a non-worker versus 1 worker paying for 80% of a non-worker. That means the life of close to 2 people needs to be financed from one job in the EU, whereas in Australia it's just slightly over 1. Keep in mind that there is even more leverage, as people who are only employed to take care of the elderly, the young, ... make up a significant part of the workforce and shouldn't be counted as employed for this purpose (a geriatrician, a teacher, a nurse, ... is paid from taxes to take care of non-workers, that means he doesn't contribute to the economy). Therefore the numbers in Australia, are about 1 for 1 (ie. tax rate of just shy of ~50%), in Europe the numbers are really about 1 for 3 (ie. total tax rate of slightly over ~75%) But even in Australia it's essentially over. Australians should have started to have way more kids about a decade ago to prevent what's now pretty much inevitable. Although once again Australia gets to sit back and watch what happens in other economies before it's forced to take action itself, like in the financial crisis. It should do well. Doesn't change the outcome though : taxes in Australia will have to rise to halve your post-tax income over the next 2-3 decades. In Europe ... let's not go there, taxing at 100% would not allow for enough economic activity to support the pensions and healthcare at the current level of provided care. Dedicating all economic activity in the EU to just that single purpose is ... not enough. Therefore, elderly care and health care will have to scale down, a LOT (and may God help them if Trump follows through on forcing Europe into defense spending). The basic problem is, the lower the working population gets the more massive the advances in productivity (the economic kind) have to be. There is a slight issue with that: http://www.tradingeconomics.com/european-union/productivity http://www.tradingeconomics.com/european-union/productivity (I've had healthcare in both Europe and Australia though. Let me tell you, Europe is better. Though I guess it does greatly vary based on the exact location)
- PrimalDual 10y ago
  I think the story of not having enough young people to pay for older people is missing a bit of evidence. Especially since if labor were scarce we would be seeing increases in wages, inflation and a tight labor market. Instead we have the exact opposite. Really the economy's limiting reactant for the past few years has been demand not labor especially considering that a 2x improvement on productivity is not that big if we consider that worker productivity has been increasing much faster than that over the same period of time. How governments fund their programs is an issue but relative scarcity of labor (or resources) in the economy isn't one of them. This is especially true in europe where lack of inflation has been a real issue for so long.
  - candiodari 10y ago
    Ever since the 2000 crisis labour has been abundant. So we can't even use the labour capacity we have (not enough jobs for everybody). But that is one perspective. It very much depends on viewpoint even here. On one hand Obama and the government are lying : there certainly aren't enough jobs to go around, and so many people are desperate for work. They do tend to "have work", so the government is not technically lying, but they have part-time jobs that they would very much like to replace with a full time job. A simplification that has been valid for pretty much the entire 20th century has been that a given labourer has a given productivity. So I assume that if we have 2 young people for every 1 old person or child, for example, that the economy would work to make that actually happen. This is not guaranteed, of course, but historically this worked. As for the productivity measure you mention, that's not what I've seen in the data. Productivity measurements rose for most of the 20th century, then flattened across the world starting around 1985 or so. There has been little to no productivity rise in the US since 2000, and most of the world is worse off, with the notable exception of China and some smaller parts of Asia. Lack of inflation rises are masked more than a little bit by government fudging. By the inflation measures of the 1980s we've consistently seen 3-4% inflation in Europe (except in the south). The measure currently used in the US is called "PCE deflator". You should look up why it's called that.

by ako 10y ago

candiodari 10y ago

Australia has exceptional demographics that make this possible - for the moment. It won't last, for the same reason it won't in Europe. But, you get to gloat for quite a while as an Australian, it'll last decades longer than in Europe, where unemployment makes the current situation untenable. To put it bluntly: Australia has a participation rate of 65%, dropping slowly (ie. pretty much perfectly stable for the past, frankly, almost the past century). Europe has a participation rate of 55%. Now you might think that's not a big difference, but it's the difference between 1 worker paying for 50% of a non-worker versus 1 worker paying for 80% of a non-worker. That means the life of close to 2 people needs to be financed from one job in the EU, whereas in Australia it's just slightly over 1. Keep in mind that there is even more leverage, as people who are only employed to take care of the elderly, the young, ... make up a significant part of the workforce and shouldn't be counted as employed for this purpose (a geriatrician, a teacher, a nurse, ... is paid from taxes to take care of non-workers, that means he doesn't contribute to the economy). Therefore the numbers in Australia, are about 1 for 1 (ie. tax rate of just shy of ~50%), in Europe the numbers are really about 1 for 3 (ie. total tax rate of slightly over ~75%) But even in Australia it's essentially over. Australians should have started to have way more kids about a decade ago to prevent what's now pretty much inevitable. Although once again Australia gets to sit back and watch what happens in other economies before it's forced to take action itself, like in the financial crisis. It should do well. Doesn't change the outcome though : taxes in Australia will have to rise to halve your post-tax income over the next 2-3 decades. In Europe ... let's not go there, taxing at 100% would not allow for enough economic activity to support the pensions and healthcare at the current level of provided care. Dedicating all economic activity in the EU to just that single purpose is ... not enough. Therefore, elderly care and health care will have to scale down, a LOT (and may God help them if Trump follows through on forcing Europe into defense spending). The basic problem is, the lower the working population gets the more massive the advances in productivity (the economic kind) have to be. There is a slight issue with that: http://www.tradingeconomics.com/european-union/productivity http://www.tradingeconomics.com/european-union/productivity (I've had healthcare in both Europe and Australia though. Let me tell you, Europe is better. Though I guess it does greatly vary based on the exact location)

PrimalDual 10y ago
I think the story of not having enough young people to pay for older people is missing a bit of evidence. Especially since if labor were scarce we would be seeing increases in wages, inflation and a tight labor market. Instead we have the exact opposite. Really the economy's limiting reactant for the past few years has been demand not labor especially considering that a 2x improvement on productivity is not that big if we consider that worker productivity has been increasing much faster than that over the same period of time. How governments fund their programs is an issue but relative scarcity of labor (or resources) in the economy isn't one of them. This is especially true in europe where lack of inflation has been a real issue for so long.
- candiodari 10y ago
  Ever since the 2000 crisis labour has been abundant. So we can't even use the labour capacity we have (not enough jobs for everybody). But that is one perspective. It very much depends on viewpoint even here. On one hand Obama and the government are lying : there certainly aren't enough jobs to go around, and so many people are desperate for work. They do tend to "have work", so the government is not technically lying, but they have part-time jobs that they would very much like to replace with a full time job. A simplification that has been valid for pretty much the entire 20th century has been that a given labourer has a given productivity. So I assume that if we have 2 young people for every 1 old person or child, for example, that the economy would work to make that actually happen. This is not guaranteed, of course, but historically this worked. As for the productivity measure you mention, that's not what I've seen in the data. Productivity measurements rose for most of the 20th century, then flattened across the world starting around 1985 or so. There has been little to no productivity rise in the US since 2000, and most of the world is worse off, with the notable exception of China and some smaller parts of Asia. Lack of inflation rises are masked more than a little bit by government fudging. By the inflation measures of the 1980s we've consistently seen 3-4% inflation in Europe (except in the south). The measure currently used in the US is called "PCE deflator". You should look up why it's called that.