Dutch King declares end of welfare state

[Benko]

http://www.euronews.com/2013/09/18/dutc ... are-state/

The King of the Netherlands has informed his country that their welfare state is finished.

King Willem-Alexander, alongside his wife, Queen Maxima, told the Dutch people that they must create their own social and financial safety nets, and that looking to the state for help was a thing of the 20th century.

[RuralEngineer]

This should end well.

[Kshartle]

It was not immediately clear if the 100 million euros spent by the government on maintaining the Royal House, with its castles and parades, would be included in the austerity cuts.

With rulers there are no rules.

Ahahahaha, the king has magical powers that make him immune to reality.

[Kshartle]

If they can actually pull it off expect the deadbeats to move onto Belgium, France and elsewhere to try to leech.

[Ad Orientem]

God save the King!

[Kshartle]

God save the King!

Yes, Zeus save the King! Ahahahaha

At least when Elvis was the King it was for his value.

[RuralEngineer]

I'm not sure if it's like this in the Netherlands or not, but in the U.K. the royal family is also paid a significant annual sum that people bitch incessantly about.  Most either don't know or don't care that these funds are paid for out of monies extracted from property held in trust by the government for the royal family.

From Wikipedia:

Until 1760 the monarch met all official expenses from hereditary revenues, which included the profits of the Crown Estate (the royal property portfolio). King George III agreed to surrender the hereditary revenues of the Crown in return for the Civil List, and this arrangement persists. The Crown Estate is one of the largest property owners in the United Kingdom, with holdings of £7.3 billion in 2011.[4] It is held in trust, and cannot be sold or owned by the Sovereign in a private capacity.[5] In modern times, the profits surrendered from the Crown Estate have exceeded the Civil List and Grants-in-Aid.[2] For example, the Crown Estate produced £200 million for the Treasury in the financial year 2007–8, whereas reported parliamentary funding for the monarch was £40 million during the same period.[6]

In other words, the U.K. public are making out like bandits, unless they feel they deserve to simple seize the royal property outright, in which case I suppose the upkeep of the royals is a bit of a burden.

I assume the situation in the Netherlands is at least somewhat similar with their upkeep being paid for by residual property being held in trust, however, this may not be the case as I couldn't find any good information on it.

[moda0306]

I'm not sure if it's like this in the Netherlands or not, but in the U.K. the royal family is also paid a significant annual sum that people bitch incessantly about.  Most either don't know or don't care that these funds are paid for out of monies extracted from property held in trust by the government for the royal family.

From Wikipedia:

Until 1760 the monarch met all official expenses from hereditary revenues, which included the profits of the Crown Estate (the royal property portfolio). King George III agreed to surrender the hereditary revenues of the Crown in return for the Civil List, and this arrangement persists. The Crown Estate is one of the largest property owners in the United Kingdom, with holdings of £7.3 billion in 2011.[4] It is held in trust, and cannot be sold or owned by the Sovereign in a private capacity.[5] In modern times, the profits surrendered from the Crown Estate have exceeded the Civil List and Grants-in-Aid.[2] For example, the Crown Estate produced £200 million for the Treasury in the financial year 2007–8, whereas reported parliamentary funding for the monarch was £40 million during the same period.[6]

In other words, the U.K. public are making out like bandits, unless they feel they deserve to simple seize the royal property outright, in which case I suppose the upkeep of the royals is a bit of a burden.

I assume the situation in the Netherlands is at least somewhat similar with their upkeep being paid for by residual property being held in trust, however, this may not be the case as I couldn't find any good information on it.

I'd imagine that those vast funds are deemed as being illegitimately owned by the royalty.

[Ad Orientem]

I'm not sure if it's like this in the Netherlands or not, but in the U.K. the royal family is also paid a significant annual sum that people bitch incessantly about.  Most either don't know or don't care that these funds are paid for out of monies extracted from property held in trust by the government for the royal family.

From Wikipedia:

Until 1760 the monarch met all official expenses from hereditary revenues, which included the profits of the Crown Estate (the royal property portfolio). King George III agreed to surrender the hereditary revenues of the Crown in return for the Civil List, and this arrangement persists. The Crown Estate is one of the largest property owners in the United Kingdom, with holdings of £7.3 billion in 2011.[4] It is held in trust, and cannot be sold or owned by the Sovereign in a private capacity.[5] In modern times, the profits surrendered from the Crown Estate have exceeded the Civil List and Grants-in-Aid.[2] For example, the Crown Estate produced £200 million for the Treasury in the financial year 2007–8, whereas reported parliamentary funding for the monarch was £40 million during the same period.[6]

In other words, the U.K. public are making out like bandits, unless they feel they deserve to simple seize the royal property outright, in which case I suppose the upkeep of the royals is a bit of a burden.

I assume the situation in the Netherlands is at least somewhat similar with their upkeep being paid for by residual property being held in trust, however, this may not be the case as I couldn't find any good information on it.

I'd imagine that those vast funds are deemed as being illegitimately owned by the royalty.

On what basis? The only argument I can think of would be that Elizabeth II is the heir to the house of Hanover which is illegitimate.

[moda0306]

I'm not sure if it's like this in the Netherlands or not, but in the U.K. the royal family is also paid a significant annual sum that people bitch incessantly about.  Most either don't know or don't care that these funds are paid for out of monies extracted from property held in trust by the government for the royal family.

From Wikipedia:
In other words, the U.K. public are making out like bandits, unless they feel they deserve to simple seize the royal property outright, in which case I suppose the upkeep of the royals is a bit of a burden.

I assume the situation in the Netherlands is at least somewhat similar with their upkeep being paid for by residual property being held in trust, however, this may not be the case as I couldn't find any good information on it.

I'd imagine that those vast funds are deemed as being illegitimately owned by the royalty.

On what basis? The only argument I can think of would be that Elizabeth II is the heir to the house of Hanover which is illegitimate.

Maybe on the basis of how the wealth was obtained over time?  If it's simply a statist accumulation via taxes and plunder to support a royal class then that could be deemed as illegitimate. 

I don't know. I'm not really educated on this stuff.  I never really got the impression that royalty really earned income by approaching the private sector in a traditional way.

[Ad Orientem]

I'd imagine that those vast funds are deemed as being illegitimately owned by the royalty.

On what basis? The only argument I can think of would be that Elizabeth II is the heir to the house of Hanover which is illegitimate.

Maybe on the basis of how the wealth was obtained over time?  If it's simply a statist accumulation via taxes and plunder to support a royal class then that could be deemed as illegitimate. 

I don't know. I'm not really educated on this stuff.  I never really got the impression that royalty really earned income by approaching the private sector in a traditional way.

The whole concept of wealth earned outside of a capitalist construct as being illegitimate is a very modern and debatable proposition.

[moda0306]

Ad Orientem,

I'm not exactly sure what you're saying... I would definitely agree that anything relating to wealth is pretty debatable.  Wealth, and more importantly the idea that a "state" should defend it for us, is a pretty unnatural concept from a purely ecological/biological perspective.  It's more of a moral/social/societal phenomenon, especially as it gets further and further separated from our sovereign bodies and skill-sets.

So if it is mainly a moral phenomenon, one might say that wealth acquired through an immoral act (force) isn't legitimate.

But this is academic, and I certainly don't want to drag another thread into the meanings of free market capitalism, force, liberty, property, etc.


Though if it is illegitimate, I find it interesting that the biggest welfare recipient imaginable (a king), is ending the welfare state for "moochers."

I'm sure I'll catch hell for that one, though.

[Kshartle]

I find it interesting that the biggest welfare recipient imaginable (a king), is ending the welfare state for "moochers."

I find it hillariously ironic and you stated it well. Welfare is illigitmate because it's not based on voluntary consent but at least if you're going to delve into it, why give all the stolen goods to one dude? 100 million my God.

I guess it only creates the disincentive to work for one guy rather than thousands and so doesn't hurt the economy as much.

[Jan Van]

If they can actually pull it off expect the deadbeats to move onto Belgium, France and elsewhere to try to leech.

So how many people being helped by the welfare state in  the Netherlands are moochers? How may people do you expect to move?

[Kshartle]

If they can actually pull it off expect the deadbeats to move onto Belgium, France and elsewhere to try to leech.

So how many people being helped by the welfare state in  the Netherlands are moochers? How may people do you expect to move?

Many are legislated out of a job. Many have been trapped in poverty. But no doubt many of them scam the system, just like here and just like anywhere there is a system to scam. I have no idea how many that is. 

How many will move? However many don't get jobs and can't find someone else to support them. What's their alternative, starve?

You'll find that many of the members on this forum recognize illegal immigrants coming to America and getting on welfare. Is Europe so different that this would not happen there?

Do the surrounding countries have welfare programs that extend to people crossing their borders and deciding to live there?

[Kshartle]

if i remember correctly (and i may not be) the dutch have very high barriers on immigration, you can move there to study and get educated but getting a job with that diploma is almost impossible,
i have my doubts they will really give up on socialism, ( again if i recall correctly) they are well indoctrinated in the ideology and have had a socialist system of one type or another for more than a few generations..

i don't know how they deal with gypsies and middle eastern immigration i would be curious to find out, other parts of socialist Europe do seem to be under real pressure from high birthrate, non assimilating immigrant groups.

You mean they give them welfare out of the taxes paid by others or debts taken out payable by taxpayers? Is that what you mean by pressure?

[Kshartle]

i have my doubts they will really give up on socialism, ( again if i recall correctly) they are well indoctrinated in the ideology and have had a socialist system of one type or another for more than a few generations..

I think you're right. Does anyone ever give up on it until they run out of other people's money?

[moda0306]

i have my doubts they will really give up on socialism, ( again if i recall correctly) they are well indoctrinated in the ideology and have had a socialist system of one type or another for more than a few generations..

I think you're right. Does anyone ever give up on it until they run out of other people's money?

Can't run out of something you have an infinite amount of.

And the money circulates.  Usually right back to the owners of the means of production again.  Even if we were on the gold standard, we wouldn't "run out."

[Kshartle]

i have my doubts they will really give up on socialism, ( again if i recall correctly) they are well indoctrinated in the ideology and have had a socialist system of one type or another for more than a few generations..

I think you're right. Does anyone ever give up on it until they run out of other people's money?

Can't run out of something you have an infinite amount of.

And the money circulates.  Usually right back to the owners of the means of production again.  Even if we were on the gold standard, we wouldn't "run out."

Touché!

Except that the owners of the means of production keep getting to retain less of their production's value or decide it's easier to ride in the wagon rather than pull it. 

[moda0306]

I think you're right. Does anyone ever give up on it until they run out of other people's money?

Can't run out of something you have an infinite amount of.

And the money circulates.  Usually right back to the owners of the means of production again.  Even if we were on the gold standard, we wouldn't "run out."

Touché!

Except that the owners of the means of production keep getting to retain less of their production's value or decide it's easier to ride in the wagon rather than pull it. 

That truly is the risk.  I love that analogy much better than "running out of money to take." 

What would be some useful indicators that more people are trying to ride the wagon and less pulling?

I'd imagine one indicator would be that the wagon is slowing down considerably due to a lack of pullers.  The equivalent would be decreases in GDP due not to shortages of demand in the face of productive capacity, but shortages of production (pulling the wagon) in the face of high demand (riding in the wagon)... the usual result is sharp inflation.

Or do you think there are other economic indicators we should be identifying?

[Kshartle]

What would be some useful indicators that more people are trying to ride the wagon and less pulling?

I'd imagine one indicator would be that the wagon is slowing down considerably due to a lack of pullers.  The equivalent would be decreases in GDP due not to shortages of demand in the face of productive capacity, but shortages of production (pulling the wagon) in the face of high demand (riding in the wagon)... the usual result is sharp inflation.

Or do you think there are other economic indicators we should be identifying?

I think the ones you pointed out are correct but I think you can add overall labor participation as well as disability claims and, let's call it voluntary welfare rolls. Working age adults capable of working who choose to receive subsidies rather than work. There is a point where this group grows and grows and it has a snowball effect.

William Summer and Browne referred to it as the "forgotten man":

From New Profits from the Monetary Crisis:

"When A takes from B to give to C, the world is well aware of the benevolence of A and the plight of C, but B is the forgotten man. The point isn't that B is being treated unfairly, the point it B isn't going to stand still for this. He'll look for ways to prevent A from stealing from him: avoiding or evading taxes, earning less, moving out of A's jurisdiction; or just start pretending to be C." 

[moda0306]

Kshartle,

I think that's a pertinent point.  But to summarize, there are a couple opinions on what creates this low participation rate...

1) These people are receiving welfare and don't want to work, but still want to consume goods/services, and can, because of welfare.  One would assume that this society would quickly dive into inflation, as working hard becomes unprofitable, and playing hard becomes so easy since it's funded by government.

2) Unemployment (and low workforce participation) is a side effect of a monetized and credit-based economy, where Peter, Paul and Mary may very well have the skills and desire to work, as well for a desire for the other person's skillsets, but because they've got insufficient money in their pocket to engage each other, they are unemployed (unless they can remember how to barter effectively and efficiently enough to remain fully employed).  In this environment, one would imagine willing workers and producers are under capacity, and even though they WANT to work, they can't get enough orders.

We're probably in some combination of the both, but I think the latter is more responsible, and the evidence (low CPI changes) would indicate I might be right.

[Kshartle]

Prices will rise slowly due to the lower participation because the first to be shed are probably the less economically productive people with lower skills. Also, with fewer people working, fewer work-related goods will be consumed: people will drive less so less gas, fewer cars, less nice clothes, work lunches etc. etc.

Also as you guys have pointed out....an economy that is weakening will see less monetary creation from the banks. This will keep prices down in dollar terms, but they are still getting more scarce and standards of living are dropping.

Is it better to go from 40k salary to 50k and see prices go up 20% or go from 40k to 30k and see them stay flat?

Mathematically the former is better.

I'll politely stay away from the topic of whether more money would help the economy   That has been explored once or twice before here.

[moda0306]

Yeah let's keep money out of it... just socialist safety nets.

However your analysis doesn't appear to be sound.  If people not participating are consuming less to the same degree that they are producing less, then where does the welfare come into play.  If you're going to blame a moral hazard caused by welfare, you're describing a scenario where too much demand being given to deadbeats for free is being used to go after less and less productivity due to workers and producers seeing no benefit to produce.  Any time you have more purchasing power going after fewer goods you'll have inflation (once again I'm trying to ignore the fed money creation for now... this is about welfare benefits).

If consumption is way down with production, you really haven't shown the moral hazard is taking place, because on a macro scale, free benefits and punishing producers should change the supply demand dynamic in relation to each other.

[Kshartle]

If people not participating are consuming less to the same degree that they are producing less, then where does the welfare come into play.

It's not the same degree. I don't think I said that. You said you would think according the logic of some that fewer people working would lead to much higher prices because of reduced supply of goods and services. My point is that even though people are producing less there is also, to a lesser degree, reduced consumption and this will keep prices from rising as quickly as they would otherwise.

Unemployed people produce nothing, but also have less money and consume less, unless they're blowing a big stash of savings but that would only be true for an individual, not across a large group. Millions of working poor live paycheck to paycheck or Amscot to Amscot.