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It's crazy how so many people don't get this basic economic fact and think public welfare in EU just rains from the sky for free. No, EU welfare state is not so

It's crazy how so many people don't get this basic economic fact and think public welfare in EU just rains from the sky for free. No, EU welfare state is not some magical hack nobody else thought of, it's just paid from the working class' wages and then redistributed to those in need. Without innovations and highly profitable industries generating well paying working class jobs, with what will you pay for that welfare and quality of life? Billionaires and corporations certainly aren't gonna pay for it out if their profits, so the working class has to. But if the working class has no more high paying wages anymore due to stagnating growth , then your welfare budget also goes bye-bye. You can't just vote yourself more welfare and higher public sector salaries and pensions out of thin air without an economic growth to back that up. I mean, you technically can, but it doesn't end well as was proven every single time this was tried.

kiba 2y ago
Well paying job just mean that the primary distribution mechanism of wealth is through having a job, rather than only creating only jobs that are necessary. That's grossly inefficient. I rather pay people to stay at home rather than gunk up our industries with make-work, or worse actively making things worse. Innovation is important sure, but also efficient use of resources, including cramping down on negative externalities. That increases welfare and quality of life, ideally with no need to spend an extra dollar.
- Cumpiler69 2y ago
  That's some idealistic stuff that's not gonna happen. The real world doesn't work like that. Yeah it's ineficient but it's the one we got right now. You're not gonna change it with your comments and beliefs. Meanwhile rent is due next month and you need to pay up by using these "ineficient" mechanisms set in place by powers higher than you.
  - kiba 2y ago
    Idealistic? So what? I am just pointing out the contradiction of people's thought. I perfectly know well it's not how things should work but how it works right now, but if people believed silly things I am going to point it out. You are welcome to point out flaws in my thinking.
- AnimalMuppet 2y ago
  Stop thinking in terms of dollars. Think in terms of stuff - that's the actual wealth. You can move dollars around with or without jobs, but somebody has to make the stuff. Someone has to grow the food. Otherwise, you have dollars but not food, and you can't eat dollars. So the thing about jobs is, we really need jobs that actually produce stuff. We don't just need jobs, we need somebody to create the wealth. First it has to exist, then we can worry about how it gets distributed. So if you have a bunch of people who are not necessary, then the best thing to do is not to let them starve (which is also immoral), nor to give them pointless jobs (which is soul-destroying), but to find something useful for them to do.
  - bluecheese452 2y ago
    We have had the capacity to produce more stuff than we can consume for almost a century now. Take cars for example. We could easily produce one for every man woman and child. If someone can’t afford a car it isn’t because we can’t make it, it is because we have decided not to make it. This isn’t a production problem, it is a social problem.
    - Workaccount2 2y ago
      >If someone can’t afford a car it isn’t because we can’t make it, it is because we have decided not to make it. Its because the person making the car doesn't want to make one for someone who isn't making something of equal value in return. It makes them a sucker for being the one to make the car. You cannot legislate, policy change, indoctrinate, or force your way around this. It's why all attempts to do so always have failed. Every single time. Always. The only way to create actual value is to put in actual work.
    - kiba 2y ago
      We can't afford to make a car for every single person. It's catastrophic to our urban fabric.
sofixa 2y ago
> Without innovations and highly profitable industries generating well paying working class jobs, with what will you pay for that welfare and quality of life I don't think anyone is seriously claiming that there is no innovation whatsoever in the EU. Falling behind the US doesn't mean there is absolutely nothing. I think a lot of people in the EU would be fine with being 3rd on "productivity" if it was enough to maintain a high standard of living and decent competitiveness.
- Cumpiler69 2y ago
  >I don't think anyone is seriously claiming that there is no innovation whatsoever in the EU. I never said that. Please follow HN rules and reply to the strongest interpretation of one's argument, not the weakest. The EU economy was at the same level as the US economy 15-20 years ago., now it's only half the US. The EU missed out on all the major technological innovations in that time and therefore missed out on a lot of income for welfare while welfare expenses only grew due to ageing population and increasing cost of living. >Falling behind the US doesn't mean there is absolutely nothing. No, it means less money for welfare. Especially with an ever increasing ageing population. If you want to take care of all of those people at a high quality of life, it's gonna cost you, and we don't have that kind of money anymore. So you either get Europeans to accept slowly sliding into poverty due to declining welfare and rising CoL, OR, you need to bring in more money to the state somehow. Previously it was done in Europe via slavery and theft through colonialism, but since that conveyor belt of free money is gone and what's left to bring in more money is innovation in highly profitable high-growth industries where EU is almost absent. No, ASML, Airbus and some struggling German mittlestand companies can't support a whole continent like they did in the 1980's. >I think a lot of people in the EU would be fine with being 3rd on "productivity" if it was enough to maintain a high standard of living and decent competitiveness. They would be fine, if those losses would come out of the pockets of tax dodging corporations, but they're not, they're being eaten up by the working class and the taxpayer who still expects the same welfare quality like in the good ol' days when the EU economy was as strong as the US. Do you you see how this level of welfare is unsustainable without matching economic growth?
  - 2y ago
criddell 2y ago
> I mean, you technically can, but it doesn't end well as was proven every single time this was tried. Arguably, Japan has been doing this for two or three generations now. Despite a crazy debt, quality of life in Japan is still pretty great.
- CapricornNoble 2y ago
  There's a saying in economics: "There are four types of economies: developed, developing, Argentina, and Japan." One must be very careful drawing conclusions for other societies based on Japan as a sole example. I somewhat agree that Japan illustrates that massive infrastructure investment, combined with diligence in maintaining functioning societal systems, does in fact yield a high quality of life that appears sustainable even if the metrics of economic growth look terrible. That's because GDP as a measure of "quality of life" is a shitty indicator IMO, but that's a whole 'nother rabbit hole to go down...
- Workaccount2 2y ago
  Japan is a monoculture that acts almost like one big family. Economic rules and values kinda go out the window similar to the way they do when you are selling your brother your old car or repairing your grandmother's sink.
- handzhiev 2y ago
  Everyone who has been to Japan in the last 20 years or so could argue about the quality of life. Japan is not quite "shiny" and people are not rich.
ta1243 2y ago
> It's crazy how so many people don't get this basic economic fact and think public welfare in EU just rains from the sky for free. No, EU welfare state is not some magical hack nobody else thought of, it's just paid from the working class' wages and then redistributed to those in need. If the US took the entire medicare/medicaid budget and split it evenly per person it would be left with more money than the UK spends on healthcare. Its not just how much you spend, its how much you waste.

kiba 2y ago

Well paying job just mean that the primary distribution mechanism of wealth is through having a job, rather than only creating only jobs that are necessary. That's grossly inefficient. I rather pay people to stay at home rather than gunk up our industries with make-work, or worse actively making things worse. Innovation is important sure, but also efficient use of resources, including cramping down on negative externalities. That increases welfare and quality of life, ideally with no need to spend an extra dollar.

Cumpiler69 2y ago
That's some idealistic stuff that's not gonna happen. The real world doesn't work like that. Yeah it's ineficient but it's the one we got right now. You're not gonna change it with your comments and beliefs. Meanwhile rent is due next month and you need to pay up by using these "ineficient" mechanisms set in place by powers higher than you.
- kiba 2y ago
  Idealistic? So what? I am just pointing out the contradiction of people's thought. I perfectly know well it's not how things should work but how it works right now, but if people believed silly things I am going to point it out. You are welcome to point out flaws in my thinking.
AnimalMuppet 2y ago
Stop thinking in terms of dollars. Think in terms of stuff - that's the actual wealth. You can move dollars around with or without jobs, but somebody has to make the stuff. Someone has to grow the food. Otherwise, you have dollars but not food, and you can't eat dollars. So the thing about jobs is, we really need jobs that actually produce stuff. We don't just need jobs, we need somebody to create the wealth. First it has to exist, then we can worry about how it gets distributed. So if you have a bunch of people who are not necessary, then the best thing to do is not to let them starve (which is also immoral), nor to give them pointless jobs (which is soul-destroying), but to find something useful for them to do.
- bluecheese452 2y ago
  We have had the capacity to produce more stuff than we can consume for almost a century now. Take cars for example. We could easily produce one for every man woman and child. If someone can’t afford a car it isn’t because we can’t make it, it is because we have decided not to make it. This isn’t a production problem, it is a social problem.
  - Workaccount2 2y ago
    >If someone can’t afford a car it isn’t because we can’t make it, it is because we have decided not to make it. Its because the person making the car doesn't want to make one for someone who isn't making something of equal value in return. It makes them a sucker for being the one to make the car. You cannot legislate, policy change, indoctrinate, or force your way around this. It's why all attempts to do so always have failed. Every single time. Always. The only way to create actual value is to put in actual work.
  - kiba 2y ago
    We can't afford to make a car for every single person. It's catastrophic to our urban fabric.

sofixa 2y ago

> Without innovations and highly profitable industries generating well paying working class jobs, with what will you pay for that welfare and quality of life I don't think anyone is seriously claiming that there is no innovation whatsoever in the EU. Falling behind the US doesn't mean there is absolutely nothing. I think a lot of people in the EU would be fine with being 3rd on "productivity" if it was enough to maintain a high standard of living and decent competitiveness.

Cumpiler69 2y ago
>I don't think anyone is seriously claiming that there is no innovation whatsoever in the EU. I never said that. Please follow HN rules and reply to the strongest interpretation of one's argument, not the weakest. The EU economy was at the same level as the US economy 15-20 years ago., now it's only half the US. The EU missed out on all the major technological innovations in that time and therefore missed out on a lot of income for welfare while welfare expenses only grew due to ageing population and increasing cost of living. >Falling behind the US doesn't mean there is absolutely nothing. No, it means less money for welfare. Especially with an ever increasing ageing population. If you want to take care of all of those people at a high quality of life, it's gonna cost you, and we don't have that kind of money anymore. So you either get Europeans to accept slowly sliding into poverty due to declining welfare and rising CoL, OR, you need to bring in more money to the state somehow. Previously it was done in Europe via slavery and theft through colonialism, but since that conveyor belt of free money is gone and what's left to bring in more money is innovation in highly profitable high-growth industries where EU is almost absent. No, ASML, Airbus and some struggling German mittlestand companies can't support a whole continent like they did in the 1980's. >I think a lot of people in the EU would be fine with being 3rd on "productivity" if it was enough to maintain a high standard of living and decent competitiveness. They would be fine, if those losses would come out of the pockets of tax dodging corporations, but they're not, they're being eaten up by the working class and the taxpayer who still expects the same welfare quality like in the good ol' days when the EU economy was as strong as the US. Do you you see how this level of welfare is unsustainable without matching economic growth?
- 2y ago

criddell 2y ago

> I mean, you technically can, but it doesn't end well as was proven every single time this was tried. Arguably, Japan has been doing this for two or three generations now. Despite a crazy debt, quality of life in Japan is still pretty great.

CapricornNoble 2y ago
There's a saying in economics: "There are four types of economies: developed, developing, Argentina, and Japan." One must be very careful drawing conclusions for other societies based on Japan as a sole example. I somewhat agree that Japan illustrates that massive infrastructure investment, combined with diligence in maintaining functioning societal systems, does in fact yield a high quality of life that appears sustainable even if the metrics of economic growth look terrible. That's because GDP as a measure of "quality of life" is a shitty indicator IMO, but that's a whole 'nother rabbit hole to go down...
Workaccount2 2y ago
Japan is a monoculture that acts almost like one big family. Economic rules and values kinda go out the window similar to the way they do when you are selling your brother your old car or repairing your grandmother's sink.
handzhiev 2y ago
Everyone who has been to Japan in the last 20 years or so could argue about the quality of life. Japan is not quite "shiny" and people are not rich.

ta1243 2y ago

> It's crazy how so many people don't get this basic economic fact and think public welfare in EU just rains from the sky for free. No, EU welfare state is not some magical hack nobody else thought of, it's just paid from the working class' wages and then redistributed to those in need. If the US took the entire medicare/medicaid budget and split it evenly per person it would be left with more money than the UK spends on healthcare. Its not just how much you spend, its how much you waste.