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So the core question is, if unemployment is high and wages are low, why not invest? You promote investment by the government later in your post. Yet is it the

So the core question is, if unemployment is high and wages are low, why not invest? You promote investment by the government later in your post. Yet is it the case that all possible private investments will have low rates of return, and only government investment can possibly have a high rate of return? If so, why? (Note that I have no particular objection whatsoever to having the government end welfare/unemployment/etc, and simply provide low wage employment for anyone who wants it building public works of various sorts. But my reasons for supporting this are simply because I favor creating disincentives for idleness, not because I think only the government can engage in productive investment.)

jonathansizz 11y ago
An aside (not necessarily aimed at you): why is taken for granted that the poor must be motivated via the stick (reducing benefits), while in contrast the rich are motivated by carrots (by reducing the top level of income tax, wealth taxes, etc.)? Surely if we tax the rich more, they'll have an incentive to work harder to make up the shortfall? Similarly, if we reduce taxes on the poor, they'll be motivated to work more as they'll be keeping more of what they earn (especially when we consider the much greater marginal value that extra dollars have to them).
- yummyfajitas 11y ago
  In all cases, I favor increasing dUtility/dWork. Currently the utility gains to the poor from increasing work are nearly flat, and often negative. Note the graph in this post, illustrating the disposable income gains both with and without transfers: http://johnhcochrane.blogspot.co.uk/2012/11/taxes-and-cliffs.html http://johnhcochrane.blogspot.co.uk/2012/11/taxes-and-cliffs... Replacing welfare with work would increase this, since incomes would go down without work. In contrast, taxing anyone (rich or poor) would decrease dUtility/dWork. Unconditional wealth transfers also decrease dUtility/dWork due to diminishing marginal gains.
sedachv 11y ago
> Note that I have no particular objection whatsoever to having the government end welfare/unemployment/etc, and simply provide low wage employment for anyone who wants it building public works of various sorts. But my reasons for supporting this are simply because I favor creating disincentives for idleness, not because I think only the government can engage in productive investment. I think we argued about this before. Why do you hate people who choose to spend time as they wish instead of being coerced into unwanted employment? The only thing massive unwanted public infrastructure projects are good for is ruining the environment. Public works policy in Japan is a great example of top quality bridges to nowhere and concrete ditches that no one cares about that also happen to do nothing "for the economy": http://www.nytimes.com/2013/12/09/business/international/a-building-boom-in-japan-has-echoes-from-the-lost-decade.html http://www.nytimes.com/2013/12/09/business/international/a-b... Why not invest the money into things that actually produce results: education and fundamental research? Let's figure out how to get robots to meet our material needs so we can spend more time not working.
- tsotha 11y ago
  >Why do you hate people who choose to spend time as they wish instead of being coerced into unwanted employment? Why should money be taken from my paycheck to support idle people who could be working? In general it's none of my business how people choose to spend their time, but if they expect me to pay their expenses it becomes my business and I have to ask why they can't go to work like I do.
  - sedachv 11y ago
    > Why should money be taken from my paycheck to support idle people who could be working? In general it's none of my business how people choose to spend their time, but if they expect me to pay their expenses it becomes my business and I have to ask why they can't go to work like I do. You mean like retired people drawing a pension?
    - tsotha 11y ago
      It's not the same. People drawing pensions are simply collecting on a benefit they earned earlier in life. In the US, anyway, if you don't pay in to the pension system when you're working you don't get a pension. Also, the exact amount of your check depends on what you paid in. The government take 8% or so of my paycheck every pay cycle, and when I retire I'll collect a pension because I paid for it. That's a whole different world than paying someone because they don't want to work.

jonathansizz 11y ago

An aside (not necessarily aimed at you): why is taken for granted that the poor must be motivated via the stick (reducing benefits), while in contrast the rich are motivated by carrots (by reducing the top level of income tax, wealth taxes, etc.)? Surely if we tax the rich more, they'll have an incentive to work harder to make up the shortfall? Similarly, if we reduce taxes on the poor, they'll be motivated to work more as they'll be keeping more of what they earn (especially when we consider the much greater marginal value that extra dollars have to them).

yummyfajitas 11y ago
In all cases, I favor increasing dUtility/dWork. Currently the utility gains to the poor from increasing work are nearly flat, and often negative. Note the graph in this post, illustrating the disposable income gains both with and without transfers: http://johnhcochrane.blogspot.co.uk/2012/11/taxes-and-cliffs.html http://johnhcochrane.blogspot.co.uk/2012/11/taxes-and-cliffs... Replacing welfare with work would increase this, since incomes would go down without work. In contrast, taxing anyone (rich or poor) would decrease dUtility/dWork. Unconditional wealth transfers also decrease dUtility/dWork due to diminishing marginal gains.

sedachv 11y ago

> Note that I have no particular objection whatsoever to having the government end welfare/unemployment/etc, and simply provide low wage employment for anyone who wants it building public works of various sorts. But my reasons for supporting this are simply because I favor creating disincentives for idleness, not because I think only the government can engage in productive investment. I think we argued about this before. Why do you hate people who choose to spend time as they wish instead of being coerced into unwanted employment? The only thing massive unwanted public infrastructure projects are good for is ruining the environment. Public works policy in Japan is a great example of top quality bridges to nowhere and concrete ditches that no one cares about that also happen to do nothing "for the economy": http://www.nytimes.com/2013/12/09/business/international/a-building-boom-in-japan-has-echoes-from-the-lost-decade.html http://www.nytimes.com/2013/12/09/business/international/a-b... Why not invest the money into things that actually produce results: education and fundamental research? Let's figure out how to get robots to meet our material needs so we can spend more time not working.

tsotha 11y ago
>Why do you hate people who choose to spend time as they wish instead of being coerced into unwanted employment? Why should money be taken from my paycheck to support idle people who could be working? In general it's none of my business how people choose to spend their time, but if they expect me to pay their expenses it becomes my business and I have to ask why they can't go to work like I do.
- sedachv 11y ago
  > Why should money be taken from my paycheck to support idle people who could be working? In general it's none of my business how people choose to spend their time, but if they expect me to pay their expenses it becomes my business and I have to ask why they can't go to work like I do. You mean like retired people drawing a pension?
  - tsotha 11y ago
    It's not the same. People drawing pensions are simply collecting on a benefit they earned earlier in life. In the US, anyway, if you don't pay in to the pension system when you're working you don't get a pension. Also, the exact amount of your check depends on what you paid in. The government take 8% or so of my paycheck every pay cycle, and when I retire I'll collect a pension because I paid for it. That's a whole different world than paying someone because they don't want to work.