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You've picked on the worst-off countries in western Europe, but tell me about the best-off like Germany or Scandinavian countries. As far as I can tell, they ha

by hnhg 14y ago

You've picked on the worst-off countries in western Europe, but tell me about the best-off like Germany or Scandinavian countries. As far as I can tell, they have pretty generous social welfare schemes but are pretty sound economically. How does that factor into your model? Could it be that other cultural factors are at play?

_delirium 14y ago
I think that may be a hint that he's blaming the wrong things: it's pretty strange to blame the U.S.'s social-welfare system for the country's disparities, when the U.S.'s social-welfare system is so stingy. Social Security is not why the older generation has so much more money, because it's pretty impossible to get rich off a social-security check in the first place (I know elderly who live off social security, and they live at a subsistence level). The well-off older people with huge retirement accounts got them from the private sector and the stock market. What's changed is that the '60s-'90s economic/employment situation is probably not going to repeat itself. My dad had basically a guaranteed-for-life job once he got a college degree, and a generous defined-benefit corporate pension, neither of which really exist anymore. And if you didn't go that route, you could apprentice in a skilled trade and also have a good middle-class job.
- 001sky 14y ago
  The most ossified countries are the ones with the most expensive real-estate (places like urban italy, japan) where the birth rate collapses because the young cant afford to raise/support urban families. The US is now entereing that phase. The older generations are grandfathered (excuse the pun) into cheaper asset bases (10x incrrease in housing pricing in 40 years, etc) so even if they are not making $$ income they are controlling the much of the critial assets. Gen Yxz etx are just increaing their asset values (through externalities) by being young and hip and beautiful and in the neighborhood. That kind of think. On the other hand, the income streams of the younger generatonis look much more like annuity than perpetuity. Iven if you make nice earning for a couple of years, housing/college debt is predicated on 30-50 years of consistent earnings. The consistency of any person X earnings today is pretty unlikely to persist. Even a successful person can be made obsolete in a 5 yrs timespan (say--company is sold, market changes, etc). This is thus leading to entirely odd outcomes as there is a mis-match of earnings/liabilities for personal balance sheets for teh yound. ie, moving jobs/et vs massive debt it takes to run housefold/pay for future kids school, etc. Its also an equity problem for texes. one or two good years get taxed and two or three lean years later, you lost a bit chunk of earnings to takes. if you had smooth earnings, you would pay lower taxs, etc. whereas the older generation is sitting on tax-free capital gain on housing, so low income/low taxed, yet they are conrolling massive asset value. This system is what killed japan culturally. zero percent interest rates will do that to you. so the future looks bright if you think the lottery style outcome is a good one to play, but on average it is losing bet except for those selling tickets.
- jf271 14y ago
  Just look at the US tax code to figure out why most of the money in the hands of old white people. The tax benefits of IRA/401K accounts really favor people who have the guts to cut back on consumption and save over the years.That is all money that didn't get spent. Some say it increased the savings rate but did the increased savings really help the country?
koralatov 14y ago
Based on talking with Norwegians, who are quite numerous in my part of the UK, the relative health of their social welfare schemes compared with the UK's mostly due to a much, much higher level of taxation, and a huge cultural difference regarding levels of entitlement. The `professional' unemployed, for example, don't appear to exist in anything like the same numbers in Norway, which removes a significant source of drain. Early retirement, which was fashionable here for a good number of years, is almost unheard of there. The expected level of pensions in Norway is lower too; here, people employed in the public sector routinely expect their pension to be ~50% of their final salary. Taxation on nearly everything makes it much more expensive than it is over here. One notable example was the sports car of a man I know: here, it cost him about £30k; in Norway, the exact same model would have cost him more than three times as much. (That's an apples-to-apples comparison -- I'm not erroneously comparing a Kroner amount to a Sterling amount.) Another thing he was amazed about was how `cheap' cigarettes and alcohol are in the UK; somewhere between one-half and one-third the price they are in Norway. I don't know enough about Germany to explain their success, but my impression is that it's partially a cultural thing, and partially that they still have a strong, manufacturing-based economy.
- _delirium 14y ago
  This doesn't counter your main point (taxation in Scandinavia is much higher, as part of their social-democratic system), but your specific examples are "sin taxes" and not really intended to raise significant revenue. The Nordic countries all have very high alcohol taxes due to problems with alcoholism, and all of them except Denmark restrict alcohol sales to the state liquor monopoly, which has high prices, and purposely restricted hours to attempt to discourage binge drinking (e.g. the Swedish stores close at 3pm on Fridays, and don't open at all on weekends). There was a strong prohibition movement in the early 20th century, around the same time that the U.S. had one, but in the Nordic countries the tax/monopoly model narrowly won out over outright prohibition. Automobile and cigarette taxes are also there primarily to discourage greater use of those products. The main taxes intended to actually raise revenue are corporate/personal income taxes, and the VAT.
- hnhg 14y ago
  I'm from the UK, recently moved to work in Germany. The tax is high by the standards I'm used to but the infrastructure and quality of life is much better and things are much cheaper to buy (food, rent & many household goods). There are major cultural differences though. Personal debt is frowned up - good luck in trying to use a credit card there and they don't have the culture of borrowing to buy (invest in) real estate in the same way. There is also a subtle sense that sharing resources and participating to make them as good as possible is the logical approach to things, and it feels 'socialist' in a modern sense. I'm struggling to describe it but there is definitely something there when they prioritise what, where and how to spend money that is difficult for Brits to get their head around. Also, I know a fair few Swedes and they all comment that they like our country but it's where they come to slum it and have fun. We were described as 'charmingly rough.'

by hnhg 14y ago

_delirium 14y ago

I think that may be a hint that he's blaming the wrong things: it's pretty strange to blame the U.S.'s social-welfare system for the country's disparities, when the U.S.'s social-welfare system is so stingy. Social Security is not why the older generation has so much more money, because it's pretty impossible to get rich off a social-security check in the first place (I know elderly who live off social security, and they live at a subsistence level). The well-off older people with huge retirement accounts got them from the private sector and the stock market. What's changed is that the '60s-'90s economic/employment situation is probably not going to repeat itself. My dad had basically a guaranteed-for-life job once he got a college degree, and a generous defined-benefit corporate pension, neither of which really exist anymore. And if you didn't go that route, you could apprentice in a skilled trade and also have a good middle-class job.

001sky 14y ago
The most ossified countries are the ones with the most expensive real-estate (places like urban italy, japan) where the birth rate collapses because the young cant afford to raise/support urban families. The US is now entereing that phase. The older generations are grandfathered (excuse the pun) into cheaper asset bases (10x incrrease in housing pricing in 40 years, etc) so even if they are not making $$ income they are controlling the much of the critial assets. Gen Yxz etx are just increaing their asset values (through externalities) by being young and hip and beautiful and in the neighborhood. That kind of think. On the other hand, the income streams of the younger generatonis look much more like annuity than perpetuity. Iven if you make nice earning for a couple of years, housing/college debt is predicated on 30-50 years of consistent earnings. The consistency of any person X earnings today is pretty unlikely to persist. Even a successful person can be made obsolete in a 5 yrs timespan (say--company is sold, market changes, etc). This is thus leading to entirely odd outcomes as there is a mis-match of earnings/liabilities for personal balance sheets for teh yound. ie, moving jobs/et vs massive debt it takes to run housefold/pay for future kids school, etc. Its also an equity problem for texes. one or two good years get taxed and two or three lean years later, you lost a bit chunk of earnings to takes. if you had smooth earnings, you would pay lower taxs, etc. whereas the older generation is sitting on tax-free capital gain on housing, so low income/low taxed, yet they are conrolling massive asset value. This system is what killed japan culturally. zero percent interest rates will do that to you. so the future looks bright if you think the lottery style outcome is a good one to play, but on average it is losing bet except for those selling tickets.
jf271 14y ago
Just look at the US tax code to figure out why most of the money in the hands of old white people. The tax benefits of IRA/401K accounts really favor people who have the guts to cut back on consumption and save over the years.That is all money that didn't get spent. Some say it increased the savings rate but did the increased savings really help the country?

koralatov 14y ago

Based on talking with Norwegians, who are quite numerous in my part of the UK, the relative health of their social welfare schemes compared with the UK's mostly due to a much, much higher level of taxation, and a huge cultural difference regarding levels of entitlement. The `professional' unemployed, for example, don't appear to exist in anything like the same numbers in Norway, which removes a significant source of drain. Early retirement, which was fashionable here for a good number of years, is almost unheard of there. The expected level of pensions in Norway is lower too; here, people employed in the public sector routinely expect their pension to be ~50% of their final salary. Taxation on nearly everything makes it much more expensive than it is over here. One notable example was the sports car of a man I know: here, it cost him about £30k; in Norway, the exact same model would have cost him more than three times as much. (That's an apples-to-apples comparison -- I'm not erroneously comparing a Kroner amount to a Sterling amount.) Another thing he was amazed about was how `cheap' cigarettes and alcohol are in the UK; somewhere between one-half and one-third the price they are in Norway. I don't know enough about Germany to explain their success, but my impression is that it's partially a cultural thing, and partially that they still have a strong, manufacturing-based economy.

_delirium 14y ago
This doesn't counter your main point (taxation in Scandinavia is much higher, as part of their social-democratic system), but your specific examples are "sin taxes" and not really intended to raise significant revenue. The Nordic countries all have very high alcohol taxes due to problems with alcoholism, and all of them except Denmark restrict alcohol sales to the state liquor monopoly, which has high prices, and purposely restricted hours to attempt to discourage binge drinking (e.g. the Swedish stores close at 3pm on Fridays, and don't open at all on weekends). There was a strong prohibition movement in the early 20th century, around the same time that the U.S. had one, but in the Nordic countries the tax/monopoly model narrowly won out over outright prohibition. Automobile and cigarette taxes are also there primarily to discourage greater use of those products. The main taxes intended to actually raise revenue are corporate/personal income taxes, and the VAT.
hnhg 14y ago
I'm from the UK, recently moved to work in Germany. The tax is high by the standards I'm used to but the infrastructure and quality of life is much better and things are much cheaper to buy (food, rent & many household goods). There are major cultural differences though. Personal debt is frowned up - good luck in trying to use a credit card there and they don't have the culture of borrowing to buy (invest in) real estate in the same way. There is also a subtle sense that sharing resources and participating to make them as good as possible is the logical approach to things, and it feels 'socialist' in a modern sense. I'm struggling to describe it but there is definitely something there when they prioritise what, where and how to spend money that is difficult for Brits to get their head around. Also, I know a fair few Swedes and they all comment that they like our country but it's where they come to slum it and have fun. We were described as 'charmingly rough.'