Tuesday, August 30, 2016

Government Incentives and Work

From G2A Natural Consequences.  Jerry just responded to a comment by Joel, so I'll bring it to the front where people can see it.
"Government incentives are programs that the government offers to get people to take a certain action. Maybe we can offer incentives for:
- Succeeding in school
- Waiting to have children
- Getting and staying married
- Staying clean and not addicted
- Working 40 hrs a week or more" G2A

Let's talk incentives, then. I'm good with having the discussion. Except for your last one...unless the incentive is a significant amount more paid time off. I don't agree that work is the be-all and end-all of human existence. It's important, but not most important." Joel

"Joel, you are wrong. The only real wealth derives from people working. By using capital we can increase the amount of wealth created per unit of work, but by leaving some people idle we double the negative effect on wealth-- consuming wealth and producing nothing in return. New Wealth= -wealth consumed - wealth not created." Jerry


Anonymous said...

...and the accumulation of wealth is even lower on the totem pole than work, so if work is not the be-all and end-all of our existence, the accumulation of wealth is even less so.


John said...

So if the accumulation of wealth is so unimportant... Why are the Liberals always trying to take wealth from those who learned, worked, saved, invested, etc and give it to those who did not?

Now I agree that there needs to be a balance between work & play, spend & save, etc.

However it is hard to feel sympathy towards those who are broke because they did not want to accumulate wealth... Especially while they are telling you your priorities are all screwed up...

John said...

Thursday I take daughter #2 to U of Wisc Eau Claire, and daughter #1 is already back at Iowa State.

Being a person who learned, worked, saved, invested, etc, I simply sell something and pay their college bills...

So personally I think the accumulation of wealth is a good thing for them and myself. Now I do agree that balance needs to be attained.

Unfortunately I think too many people are living for today and not planning enough for the future. Which is just fine until they start complaining about college costs being too high, not having enough retirement income, etc. And somehow they think the workers MUST help them out of their self chosen predicament.

Anonymous said...

"However it is hard to feel sympathy towards those who are broke because they did not want to accumulate wealth..."

This is where you fail, John. You have assumed that people who don't have money don't WANT to have money. You assume that it is their failing and their failing alone that they are poor or otherwise financially disadvantaged.

"Now I agree that there needs to be a balance between work & play, spend & save, etc."

And I think we are in agreement on all except the ratio on those points.

"...and daughter #1 is already back at Iowa State."

Now this...I will give you credit for raising a daughter who has the sense to pick such a great place to go to college...my Alma Mater.


John said...

I am just responding to your comment.

"the accumulation of wealth is even lower on the totem pole than work, so if work is not the be-all and end-all of our existence, the accumulation of wealth is even less so"

Looks to me like you are saying live for today, and let the government take care of me...

Anonymous said...

"Looks to me like you are saying live for today, and let the government take care of me..."

Looks like you still don't understand that everyone relies on other people - friends, family, church, government - at various points in their lives.


John said...

Why do you think poor people are poor if not due to their own choices?

Please remember that I have many friends and relatives who barely made it through high school and certainly are not rich. But maybe only one of the dozens is actually poor.

Most of them got married, got jobs, limited themselves to 1 or 2 kids, stayed married, bought a small house, bought used cars, worked their way up in different occupations, saved some and invested, etc. Now they don't take expensive vacations or buy exotic sports cars, however they are happy.

So what are common characteristics, beliefs and behaviors of the poor people you actually know?

John said...

"relies on other people"

Independent people know how to give/receive help to/from others at times.

The problem is that many of these folks have been trained to be Dependent. Therefore they rely too much on others and not enough on themselves.

John said...

By the way, the folks I know who would be considered to be poor tend to:
- get in trouble at work (new job often)
- buy too many toys with debt
- addicted to cigarettes, gambling, alcohol, etc
- and/or divorced w/ kids

For two of the guys, thankfully their wives help to keep the roof over their head and food on the table.

Sean said...

Here's an interesting story about one of the most common tropes about poor people:

The big problem with one of the most popular assumptions about the poor

Anonymous said...

People often talk about government policy in terms of incentivizing behavior. Mostly this is nonsense. Consider the list below, and the role government plays in each one.

- Succeeding in school

Isn't succeeding in school it's own reward. There are huge incentives to do well in school. Do we really need more?

- Waiting to have children

In a society with too few children, do we really need incentives to delay having children more? What role did the government play in your decision to have a child? Did you check whether interest rates were lower before the critical moment?

- Getting and staying married

Oops, government had a bad day. Time to get a divorce.

- Staying clean and not addicted

Do we really think adding more incentives not to do it will influence people thinking about injecting poison in their arm?

- Working 40 hrs a week or more" G2A

I think people work because they get paid. What government incentive compares to that? And lots and lots of people work full time jobs, as opposed to retiring or working part time, to get benefits. What role should incentives play in that?


John said...

Hi Sean,
That was an interesting link and makes some sense. However how does it apply to these types of choices:
- not focusing on academic achievement
- arguing with Teacher or misbehaving at school
- arguing with boss or misbehaving at work
- having babies while young and not married or getting divorced
- being addicted to cigarettes, gambling, alcohol, etc
- getting too deep indebt
- etc

Hiram, Apparently some folks need more incentive.

Sean said...

Does it directly apply to all of them? Not necessarily. But I think if you do have a person who have lived in an uncertain environment for their entire life, they're more likely to live for today and figure out the rest later. And they're probably less likely to believe that doing what others perceive as the right thing will pay off for them.

John said...

So if giving them more money encourages them to spend more money faster... How does this end well for welfare? Their children? The taxpayers? Or them?

Maybe this is why charity works better. The recipient is more closely monitored and the M&M's are disbursed sparingly. And if the recipient falls off the path to improvement the M&M's are with held...

Since almost all of our families were cash poor at sometime in our long history. How did some families learn to think long term, while others kept struggling with impulse control?

Sean said...

What if we're not giving folks the right support to take away the uncertainty? Consider the success of programs like those in Salt Lake City to address chronic homelessness (they gave them places to live and the support to build new lives) and what it teaches us.

And, again, if you're talking "long history", the very real racial discrimination in this country plays a significant role in how some communities have developed versus others.

John said...

The "when" is somewhat immaterial... The "how" is more important...

Is this the Salt Lake City program?

It looks like it was highly dependent on charities and behavioral expectations.

SLC Strategy

John said...

My point is that checks and housing don't change behaviors. People need to be held accountable or the "free housing" turns into the crime ridden "projects" / slums that so many cities have.

jerrye92002 said...

I think we've gone off track a bit. I refer to "wealth" not as personal wealth, but societal total wealth, and define "wealth" as "the ability to do things for people." Wealth enables people to eat, clothe themselves, be sheltered, to enjoy the arts or recreation, to be educated, and on and on. Without the wealth produced by people working those things do not happen. And capital is "accumulated wealth" which increases the wealth per unit of work. Imagine trying to build a PC without the "capital" of knowledge about transistors and integrated circuits. Or harvesting 1200 acres of wheat with a two-hand scythe rather than a modern combine. It isn't important what one does for work, so long as someone is willing to pay you for it. There are those lucky folks who get paid to travel around and write about it, for example. And others who do jobs they don't like because they have to eat. It's when we pay people to not work that everybody loses.

It's like the difference between a hobo and a bum. A hobo will do odd jobs to get a handout. A bum won't. When government offers no-strings handouts, you get more bums and fewer hoboes. You have to wonder whether the unproductive behaviors resulted in needing a handout, or if the behaviors were the result of the handout being offered. You know how to catch wild pigs?