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Living in Serbia is cheap. Most people have extensive families. If they run out of work, they can move back to the countryside, to live with their father or gra

Living in Serbia is cheap. Most people have extensive families. If they run out of work, they can move back to the countryside, to live with their father or grandmother. Charities can also fill in the gaps. The question is whether Serbia wants an advanced economy, with individual and corporate transparency and opportunity, or a stagnant welfare state.

mantas 6y ago
If Serbia is not a very interesting exception, the intergenerational links are (sadly) fracturing day by day. While that may have worked a decade ago, that sure won't work a decade or two from now. And social system shall plan for what is coming. While at it, we could also change pension system. If your kids emigrate (or you didn't have any), then you get only half of the minimum payout :)
- ArkanExplorer 6y ago
  The primary expense of living in the West is rent and housing - due to mass immigration driving up populations beyond their natural size (given that fertility rates are sub-replacement in practically every Western country). By contrast the primary expense of living in the 'East' is food and energy. For many people, housing is practically or exactly free. The Serbian population is already down about a million people from its peak: https://www.populationpyramid.net/serbia/2019/ https://www.populationpyramid.net/serbia/2019/ There is a lot of cheap real-estate out there outside cities. What might make more sense is to have food kitchens and standardised subsidised housing for the poor and out of work. This kind of work could be done super-efficiently at a national level. The other factor is that things like pension and welfare expenses are basically known expenses. It doesn't make sense to charge a % of consumption or income (thereby disincentivizing both of them). Just share the burden across everyone of working age with a poll tax, and to the rich with a property tax (with a credit for the number of children under age 16, to avoid penalizing families). You can find other externalities to tax like drugs, road use, and fossil fuels. The USA, UK, Scandinavia, Australia have embraced these kind of transparent and simple taxes, and their societies are much wealthier because of them.
  - Acinyx 6y ago
    > The USA, UK, Scandinavia, Australia have embraced these kind of transparent and simple taxes, and their societies are much wealthier because of them. Eh, scandinavia doesn't use poll taxes but all have progressive tax rates (Just like the rest of northern Europe)? And AFAIK the UK and US also use progressive tax rates?
  - notahacker 6y ago
    > The USA, UK, Scandinavia, Australia have embraced these kind of transparent and simple taxes, and their societies are much wealthier because of them. This is nonsense. All of these states have complex and much higher rates of income tax than Serbia, plus consumption taxes. The UK tried a poll tax once and there were riots, up to a third of people refused to pay and it was one of the main reasons a Prime Minister of 11 years lost her job to someone who promised to replace it. And that was a relatively low one just to fund local services with a reduced rate for registered unemployed. Of all the potential income tax alternatives it is undoubtedly the worst. It makes far more sense to distribute the burden of paying for pensions according to current ability to afford it than to force people to pay money they don't have into a scheme which simply promises to give it back decades later if they're still alive.
    - ArkanExplorer 6y ago
      VAT is just a poll tax by stealth. Instead of charging you directly, we will increase the price of all of the goods and services you consume, distorting and adding a huge bureaucratic layer to the economy as a result. Secondarily we will print money to finance Government spending, and you will 'pay' for it through inflation. Meanwhile the rich can avoid VAT by purchasing expensive personal electronics and cars through their companies and getting rebated, and see their asset portfolios increase in value thanks to the money printing. If the psychological element of paying poll taxes is too extreme, just replace them with land taxes with credits for each citizen living there and large credits for children under 16. At least you can link the payment to the consumption of a resource (housing) and penalty if you don't pay (confiscation or the application of a lien). Of course land value taxes are unpopular in European countries with a huge class of landed gentry...
- hkt 6y ago
  Parents lose pensions because their kids leave?
  - mantas 6y ago
    If OP wants to drop welfare and switch to extended-family-provided safety net...
- visarga 6y ago
  > While at it, we could also change pension system. If your kids emigrate (or you didn't have any), then you get only half of the minimum payout :) That's why I don't trust the pension system - too many people opining what we should do with the money. Let's borrow from the budget to pay pensions, or let's borrow from pensions to fix the budget, or let's invest pensions in stocks (which might crush), or let's raise the age, or let's add new rules. I just want to save some money for old age, I don't want my savings to be redistributed 20 years from now by some new rules just invented. If I can't be sure of the pension then it's not fulfilling its role as an assurance that I'll be prepared when the time comes.
hkt 6y ago
FYI, the UK has a welfare state that works fine for many people. So do many other Western countries. It seems to me that you're presenting a false dichotomy here - one which appears to be based on your own ideological view of the world, rather than evidence.
- redis_mlc 6y ago
  FYI, Europe threw away their welfare states when they allowed unemployed African economic migrants into their countries. A country cannot just add 5%-10% in population dependent on welfare and still pay for their obligations to legal residents. Looking forward to the news when the bill comes due. Big up to Poland and Hungary for their foresight in building border fences to enforce legal immigration.

mantas 6y ago

If Serbia is not a very interesting exception, the intergenerational links are (sadly) fracturing day by day. While that may have worked a decade ago, that sure won't work a decade or two from now. And social system shall plan for what is coming. While at it, we could also change pension system. If your kids emigrate (or you didn't have any), then you get only half of the minimum payout :)

ArkanExplorer 6y ago
The primary expense of living in the West is rent and housing - due to mass immigration driving up populations beyond their natural size (given that fertility rates are sub-replacement in practically every Western country). By contrast the primary expense of living in the 'East' is food and energy. For many people, housing is practically or exactly free. The Serbian population is already down about a million people from its peak: https://www.populationpyramid.net/serbia/2019/ https://www.populationpyramid.net/serbia/2019/ There is a lot of cheap real-estate out there outside cities. What might make more sense is to have food kitchens and standardised subsidised housing for the poor and out of work. This kind of work could be done super-efficiently at a national level. The other factor is that things like pension and welfare expenses are basically known expenses. It doesn't make sense to charge a % of consumption or income (thereby disincentivizing both of them). Just share the burden across everyone of working age with a poll tax, and to the rich with a property tax (with a credit for the number of children under age 16, to avoid penalizing families). You can find other externalities to tax like drugs, road use, and fossil fuels. The USA, UK, Scandinavia, Australia have embraced these kind of transparent and simple taxes, and their societies are much wealthier because of them.
- Acinyx 6y ago
  > The USA, UK, Scandinavia, Australia have embraced these kind of transparent and simple taxes, and their societies are much wealthier because of them. Eh, scandinavia doesn't use poll taxes but all have progressive tax rates (Just like the rest of northern Europe)? And AFAIK the UK and US also use progressive tax rates?
- notahacker 6y ago
  > The USA, UK, Scandinavia, Australia have embraced these kind of transparent and simple taxes, and their societies are much wealthier because of them. This is nonsense. All of these states have complex and much higher rates of income tax than Serbia, plus consumption taxes. The UK tried a poll tax once and there were riots, up to a third of people refused to pay and it was one of the main reasons a Prime Minister of 11 years lost her job to someone who promised to replace it. And that was a relatively low one just to fund local services with a reduced rate for registered unemployed. Of all the potential income tax alternatives it is undoubtedly the worst. It makes far more sense to distribute the burden of paying for pensions according to current ability to afford it than to force people to pay money they don't have into a scheme which simply promises to give it back decades later if they're still alive.
  - ArkanExplorer 6y ago
    VAT is just a poll tax by stealth. Instead of charging you directly, we will increase the price of all of the goods and services you consume, distorting and adding a huge bureaucratic layer to the economy as a result. Secondarily we will print money to finance Government spending, and you will 'pay' for it through inflation. Meanwhile the rich can avoid VAT by purchasing expensive personal electronics and cars through their companies and getting rebated, and see their asset portfolios increase in value thanks to the money printing. If the psychological element of paying poll taxes is too extreme, just replace them with land taxes with credits for each citizen living there and large credits for children under 16. At least you can link the payment to the consumption of a resource (housing) and penalty if you don't pay (confiscation or the application of a lien). Of course land value taxes are unpopular in European countries with a huge class of landed gentry...
hkt 6y ago
Parents lose pensions because their kids leave?
- mantas 6y ago
  If OP wants to drop welfare and switch to extended-family-provided safety net...
visarga 6y ago
> While at it, we could also change pension system. If your kids emigrate (or you didn't have any), then you get only half of the minimum payout :) That's why I don't trust the pension system - too many people opining what we should do with the money. Let's borrow from the budget to pay pensions, or let's borrow from pensions to fix the budget, or let's invest pensions in stocks (which might crush), or let's raise the age, or let's add new rules. I just want to save some money for old age, I don't want my savings to be redistributed 20 years from now by some new rules just invented. If I can't be sure of the pension then it's not fulfilling its role as an assurance that I'll be prepared when the time comes.

hkt 6y ago

FYI, the UK has a welfare state that works fine for many people. So do many other Western countries. It seems to me that you're presenting a false dichotomy here - one which appears to be based on your own ideological view of the world, rather than evidence.

redis_mlc 6y ago
FYI, Europe threw away their welfare states when they allowed unemployed African economic migrants into their countries. A country cannot just add 5%-10% in population dependent on welfare and still pay for their obligations to legal residents. Looking forward to the news when the bill comes due. Big up to Poland and Hungary for their foresight in building border fences to enforce legal immigration.