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Is building houses or offices investment?
Richernotbroker
Posted: 29 September 2012 11:47:30(UTC)
#21

Joined: 20/09/2012(UTC)
Posts: 51

Can't remember seeing it, but thanks for the link, it's a slightly different scenario to HG Wells "The Time Machine", i.e. cannibalism in one form or another....yuck!

We're almost getting back to the BSE/scrapie crisis and feeding sheep to sheep!

I think someone said about finding a solution to the economy, but isn't this the nature of our existence, that someone thinks of a good idea, and it works for them, then loads of other people join in, and it works for a while, and then when most of the population join in, it turns into fools gold, that was an aparition of wealth, that when the inevitable crash comes, everyone is mortgaged to the hilt, like many countries now, and that great money making scheme only worked for the first few, just like one giant Ponsi Scheme.

Or like the Alaskan Gold Rush, where it was the companies making the shovels and other things to help the "prospectors", actually did rather well. The ones who got in early did well, but the latecomers failed.

Didn't that happen with the sub-prime mortgages, banks getting their fees, but then finding out that the stratospheric valuations collapse once demand dries up and the ones in early are defaulting.

Should the banks be prosecuted for running a giant Ponsi Scheme, not just Bernie Madoff?
Richernotbroker
Posted: 29 September 2012 13:32:09(UTC)
#22

Joined: 20/09/2012(UTC)
Posts: 51

Going back to your point about unintended consequences breeding, we have made a moral choice to support the poor with the national welfare system, and this has become a right.

The problem with welfare is that unless you protect the system from abuse, either by the claimants, who have a desire to get more money, e.g. some people sign-up for unemployment benefit in several countries - nice little earner!

Or from the people who are in receipt of payments, e.g. landlord, who whack up their rent costs, to get as much out of the system as possible, what should have been there to help people, and it is something we would all support, in being reasonable empathetic creatures, could, and might have been turned into a system that is open to wholesale abuse by the less savoury characters in society.

When building houses, we can all say that a certain standard of living is needed, however, if there are some people who do things, when they are being supported, and say that everyone else has to pay, and take a lower standard of living, it removes the feedback for some people, where they suffer from their actions, which would change their behaviour, or result in them causing their own suffering.

If that suffering is removed entirely, there are no consequences, some people will not learn, and will not act reasonably.

We have to question that if we spend a greater proportion of GDP and wealth on people who abuse the support that they get, then the unintended consequence of that support actually leads to abuse that has to be controlled.

Capping all support at £20,000 per family or whatever level prevents abuse, but again, the provision of housing at a lower cost - affordable homes for the unemployed, should also give benefits to the governments finances, where government money needs to be used more efficiently than it is currently, paying full market rents in some parts of London.

Building houses would be investment in this context, it is improving the efficiency of the welfare state, being able to support needy people for less money.

If those savings could be put into healthcare, then the unemployed themselves would have further gains, but does providing anything for free just lead some people to treat it with contempt, because they do not value something that they have never had to suffer for to pay for it, i.e. bloody hard work to make ends meet, or severely cutting spending when your self-employed income shrinks to half or a quarter of its previous level?

If those savings could reduce taxes to give more to people investing and creating employment, the unemployed would get off benefits sooner.

Perhaps companies that are increasing their workforce should pay lower tax rates than those who have a stable workforce and income, after all, if a major cost is being reduced, shouldn't the government reward the companies that are reducing its costs?

Some money has been put into agencies to "find work", or get people into work. If lower tax rates are given to companies that are expanding their workforce, then you have the positive feedback and incentive to employ more people.
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