Sunday, 18 November 2007

"Who says standards have not risen?"

Rather worrying, near the end of the article we get this...

Nevertheless, the report for the Primary Review concludes that, as a general rule, children do learn to read in primary school. "Most cannot read before they start school and the vast majority of children are able to do so by the time they move to secondary school.

'The vast majority'? Jesus H F***! As long as 80% or 90% can read at age 11, that's OK is it? How on earth are the 10% or 20% who can't read supposed to learn a single thing at secondary school?

14 comments:

Cleanthes said...

Mark

You've pulled your punch:
"by the time they move to secondary school"

That's an absolute scandal in itself. How can they learn a single thing beyond the first year at primary school if they can't read?

Mark Wadsworth said...

A very good point!

Simon Clark - Formerly The Cynical Libertarian said...

I like this argument from Laybuh, let's make them be consistent. So, if the vast majority of people are ok, everything is fine and we don't need to do anything. So we can scrap the welfare state then.

Mark Wadsworth said...

I am a big fan of replacing entire welfare system with a Citien's Income style scheme, but of course, a zero rate of CI is an option that has to be seriously considered!

Simon Clark - Formerly The Cynical Libertarian said...

Welfare should be privatised. How much money is in your welfare account right now? Nothing. All you have is a promise from the government that they'll pay you. All the government needs to do in order to privatise the system is to cash everyone out - give everyone a cash sum using the sums that insurance companies use to turn cash into annuities and do the reverse i.e. annuities into cash.

Then, you could take your cash and walk into an insurance company and take out an identical policy using those same sums, or you could pay more or you could pay less.

Of course, to cash everyone out the government would need to either raise taxes now or borrow. If it borrows, its debt on the books will skyrocket, leading some to believe that this is an expensive route. It is not. The government is already in massive debt, it just doesn't put it on the books because it's sloppy and deceptive. Remember how you have a promise from the government to pay? When you or I promise to pay someone we call it debt and, if we were firms we'd put it on our books as such. The government does not. Debt on the books would explode, but real debt would remain the same.

In theory the government could cash everyone out and then keep cashing every new generation but the stupidity of this should be self evident - one would hope that one cashing out would be the end of it.

Of course, there are some people who this will miss i.e. those born unable to work. I think it overtly cynical of the left to believe that we are not a compassionate enough people to provide for these people voluntarily, especially if we can instantly increase our incomes by 40% and in the long run increase it even more due to the multiplier effect, 40% increased growth etc.

Simon Clark - Formerly The Cynical Libertarian said...

Welfare should be privatised. How much money is in your welfare account right now? Nothing. All you have is a promise from the government that they'll pay you. All the government needs to do in order to privatise the system is to cash everyone out - give everyone a cash sum using the sums that insurance companies use to turn cash into annuities and do the reverse i.e. annuities into cash.

Then, you could take your cash and walk into an insurance company and take out an identical policy using those same sums, or you could pay more or you could pay less.

Of course, to cash everyone out the government would need to either raise taxes now or borrow. If it borrows, its debt on the books will skyrocket, leading some to believe that this is an expensive route. It is not. The government is already in massive debt, it just doesn't put it on the books because it's sloppy and deceptive. Remember how you have a promise from the government to pay? When you or I promise to pay someone we call it debt and, if we were firms we'd put it on our books as such. The government does not. Debt on the books would explode, but real debt would remain the same.

In theory the government could cash everyone out and then keep cashing every new generation but the stupidity of this should be self evident - one would hope that one cashing out would be the end of it.

Of course, there are some people who this will miss i.e. those born unable to work. I think it overtly cynical of the left to believe that we are not a compassionate enough people to provide for these people voluntarily, especially if we can instantly increase our incomes by 40% and in the long run increase it even more due to the multiplier effect, 40% increased growth etc.

Mark Wadsworth said...

Well, I have seriously considered that option and decided it to be unworkable. Scrap the entire welfare system, full stop, is a hyothetical possibility, but 'cashing out' is nuts (except for people close to state pension age, perhaps). If the government gives me cash now I will just have to pay more tax in future to repay myself. So it'd be better to cut taxes.

Either way, I am sticking to the CBI scheme for now.

Simon Clark - Formerly The Cynical Libertarian said...

"If the government gives me cash now I will just have to pay more tax in future to repay myself. So it'd be better to cut taxes."

You would have to do that anyway though.

If you are cashed out now then eventually everyone will pay for that cash give-away.

If you're not cashed out you'll get benefits in x years time and everone will pay for that instead.

Either way, taxes are the same for at least one generation. In the former case, after that one generation, presumably, there'd be no more government welfare and taxes could drop. However, you could theoretically keep on doing that over and over with the same level of taxation - the advantage being much the same as that of vouchers over state schooling, and of course the more accurately portrayed balance sheets.

Mark Wadsworth said...

SC, that sounds a bit mad. It is better to pay people benefits week-by-week or month-by-month, there are a load of people who'd piss the up front cash all up the wall and then come back for more.

Simon Clark - Formerly The Cynical Libertarian said...

If we cash people out then they can choose how to spend their money , Everyone will be perfectly free to take the cash and put it in an insurance fund identical to the state one. Nobody need go without welfare.

If people don't want to buy insurance, why force them to? Everyone has a choice whether to insure their mobile phone or their laptop and such insurance schemes are provided at an appropriate, efficient market rate. Welfare is forced upon people. Additional welfare is also costlier than it would otherwise be as the supply curve has been shifted by the government monopoly i.e. because the government provides most welfare the demand for private welfare is much lower than it would otherwise be. Fixed costs and a lack of economies of scale thus make private welfare inordinately expensive so you have an over provision of welfare on net, but an under provision of high rate welfare for those who want it.

Milton Friedman was the one who first proposed a cash out system, but his original article is down at the moment. Here's an article by Dr. Arnold King explaining what Friedman was saying in his article:

http://econlog.econlib.org/archives/2003/02/milton_friedman.html

Simon Clark - Formerly The Cynical Libertarian said...

I could add that, if you can't accept the idea of people being able to choose to have less welfare of no welfare, you could still require everyone to have welfare or welfare of x quantity. This is still not optimal, but at least it's market based rather than a government monopoly - and it would correct the government's books.

Mark Wadsworth said...

Well, I personally believe that there should be some sort of minimum income, guaranteed by the government and funded by the taxpayer, which would liberate people to e.g. go and study, take maternity leave, care for sick relatives, whatever.

How high should this be? I do not know - current income support rates? Higher? Lower? No idea.

Rather than forcing people to pay money into a compulsory insurance scheme (the only people I trust less than politicians are insurance companies), if there's money to be saved, this should be given back to people as TAX CUTS.

As to economic efficiency, I hate to say this, but HMRC's collection costs for the Big Simple taxes are about 1%, and the admin costs for the Big Simple benefits (child benefit, State pension) are just shy of 1%. I doubt whether any insurance company is that efficient to manage a spread of 2% between income and payouts.

Paying off your mortgage as quick as you can, for example, is the best form of saving. Sticking money in the bank for a rainy is a sensible thing to do. Buying lottery tickets is the worst form of saving, but hey, each to his (or her) own. Handing over large sums of money to insurance companies is totally fucking idiotic.

Simon Clark - Formerly The Cynical Libertarian said...

"Handing over large sums of money to insurance companies is totally fucking idiotic."

Well that's exactly what you do when you pay taxes to fund welfare. It's not a savings account, it's an insurance fund, just a state run one.

A tax cut is exactly what my (well, Friedman's) idea would result in. One generation is cashed out and the next generation gets a tax cut.

I can see the appeal of a minimum income system but why simply give a blanket guarantee if the idea is to enable people to, say, get some education or training? Why not link that minimum income to being in work, education or absolutely definitely positively trying to get into either? Otherwise people can simply refuse to work or learn and get by on that income. THe incentive to get a job goes from 100% of that job's income to a fraction of that i.e. whatever it pays above the minimum income level guaranteed by government. If they value leisure a lot, or dislike work a lot, that will cause them to choose to be unemployed.

Mark Wadsworth said...

It must be unconditional! Any attempt at social engineering will backfire! Or else people will do Noddy training courses and so on, which'd make things WORSE.

I am a libertarian not an authoritarian.

As to incentives, please read the CI booklet on their site for worked examples!

The gimmick is, if you find work - however low paid or short term, you keep ALL your basic income PLUS 67% of what you earn (assuming a flat tax of 33% in their example). Which is a much lower withdrawal rate than under the existing system - for many it is about 100%.

Further, the CI rate suggested in that booklet is not enough to live on, and is not intended to be, it is a top-up for the wages of lower earners.