From: Adam Back <aba@dcs.ex.ac.uk>
Date: Sat, 25 Oct 1997 20:45:24 +0800
To: harka@nycmetro.com
Subject: poverty traps (Re: Saving money)
In-Reply-To: <199710251158.GAA28570@einstein.ssz.com>
Message-ID: <199710251226.NAA01559@server.test.net>
MIME-Version: 1.0
Content-Type: text/plain




Harka <harka@nycmetro.com> writes:
>  -=> Quoting In:tcmay@got.net to Harka <=-
> 
>  In> As I recall your point, it was that most people are a few weeks away
>  In> from running out of money and hence cannot change jobs readily. I was
>  In> saying that a small amount of self-discipline and sacrifice can quite
>  In> easily translate into having a few _months'_ worth of savings.
> 
> That may indeed work for some people, but the argument of
> "self-discipline and sacrifice" usually goes overboard once people
> _other than yourself_ are severely affected by that. "Sorry hun,
> you can't have a new winter-coat. Mommy has to save enough money so
> that she can choose the people she works for. And no...no christmas
> this year either".

That is indeed a sad financial state to be in.  I have trouble
believing it though.  Most of the people at low levels of income
around where I live (people collecting pretty reasonable social
security paychecks) spend lots of their money on such things as:

- drinking at pubs and bars (expensive hobby, alcohol is taxed at
  2000% or whatever, and the publican is making a hearty markup too)

- smoking (again expensive hobby, taxed at 2000% or whatever, likely
  to make you die young, but hey, that's their choice)

- have satellite dishes, cars, fancy consumer electronics collections

So if any kids are being deprived of winter clothes or whatever, it's
not because their parents don't have enough money, it's because their
parents are stupid, or selfish.  At least this is the overwhelming
case in a socialist welfare state like the UK.

If you go to a big city (soft-target-ville), you will see a few people
lying in doorways begging, sleeping on the streets; they're doing it
because they want to, or because they are mentally ill, or whatever.
There is no excuse with social handouts of L45 ($72) per week spending
money, plus rent paid.

>  In> If they won't make these spending tradeoffs and have not even
>  In> a buffer sufficient to carry them through a month or two or
>  In> three, I say screw them.
> 
> How about you adopting a person/family of your choice instead and
> providing them with enough startup-money, so that they can at least
> make an realistic effort to work towards a position of becoming
> financially independent themselves? :)

In the UK we have a "poverty trap".  That is the social security hand
outs are so generous that it would mean a large pay check cut for many
people to go and get a job.  For example, a qualified auto mechanic I
know: for a while he was on the dole: getting L110 spending money,
rent paid, plus fringe benefits (exemption from certain taxations).
He'd have had to be bringing in > L250/week ($400/week) or so to even
make it worth while working once you took into account lost benefits,
and cost of getting to work, and taxation of income etc.  Even then
he'd have been working for an additional hourly rate of about
0.50p/hr.  Yes he'd be self-sufficient, but working for effectively
0.50p/hr isn't much incentive.

>  In> just because Joe Sixpack spent his paycheck on beer
> 
> or on his two daughters...

More frequently on beer, I think you may find.

>  In> Or because Rawandala Brown spent her money on crack
> 
> or supporting her sick mother instead.

In the UK sick mothers get state pensions, sick pay.  Daughters who
have enough wits about them would even get paid by the state to look
after said sick mother.

> Your repeating of government-propaganda about the "abuse of the
> welfare-system" etc. doesn't really cut it as an argument in a
> discussion about the realism of having total financial independence
> and the freedom of choices, that comes with it.

You don't need total financial independence, all you need is a few
months buffer.


I don't really think that most capitalists are cold-hearted bastards,
charity is fine.  But the state is an ineffient mechanism for
providing social security.  And being forced to hand over `charity' at
the point of a gun isn't appreciated.

Adam
-- 
Now officially an EAR violation...
Have *you* exported RSA today? --> http://www.dcs.ex.ac.uk/~aba/rsa/

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