Welfare Generalizes Savings

Welfare Does Not Just Save Bodies & Souls, But Also One’s Pocketbook.

Systems of governance, systems of thoughts and emotional systems, be they of institutions or of individuals, are all closely related. A case in point is the relationship of the private savings rateversus the rate of social expenditures in various nations .

The more the social expenditures, that is, the welfare state, the greater the private savings.

We Socialize, Therefore We Save

We Socialize, Therefore We Save

Notice that FR (France) spends socially way more than any other country. Part of France’s lower savings rate relative to her sister republic “GE”, Germany, is no doubt related to the fact that France has now a third more youth than Germany (instead in 1940, the fascist Germanoid “Reich” had twice more youth than the French Republic). Young people save less.

France, thanks to colossal taxes, spends socially about twice more than the USA, but the French saving rate is also 50% higher than the saving rate in the USA.

Oblivious to facts, Alan Greenspan, plutocratic propagandist, ex-central banker, friend and governmental czar of financing the hyper rich with trillions, is out spewing more of his plutophile mental poison with a new book. Krugman denounces the insults to reason it consists of:

“Greenspan thinks he has discovered a new law: transfers to individuals, even if fully paid for with taxes, reduce national savings one for one. You can bet that this claim will soon be popping up on the right as an established fact… as a reason to weaken the safety net.

The obvious answer is to look cross-country: European nations have much bigger welfare states than we do; do they have lower savings? No.

A quick-and-dirty version: I compare social expenditures as a share of GDP (from the OECD Factbook) with national savings rates for 2010 (from the IMF WEO database). “

This is the graph above (thanks Paul Krugman for doing the research; you search, I explain!).

Where does the positive correlation between welfare and savings come from? Simple: Both the will to savings and the will to welfare are motivated by the same mentalities.

The more welfare the state, the more considerate the People of that state. That’s obvious. Now, where does the will to welfare comes from? Consideration. The more considerate to others, one is, the more for a welfare state one is.

Now, if one is more considerate to others, one, naturally, will be more considerate to oneself. Where does the Latin word “considerare” comes from? It meant to look closely, observe carefully. In other words, to look at something as one does to the stars

This, by the way is in full consideration of the flaw in the much touted “Golden Rule” of treating others as one would treat oneself: treating others as one treats oneself does not help others if one wants to kill oneself, or abuse oneself!

Hence the Will to Welfare involves more than sheer reciprocity, and “love” of others. It involves consideration. In particular consideration to the potentiality of changing circumstances, and their fluctuating nature. Thus to will and implement the welfare state, people have to be informed, serious, and well intentioned to others and themselves.

The same emotional system lead people who want welfare to all, to complement it with even more welfare to themselves. the more serious the People, and the more savings oriented they are.

Thus that countries with a greater welfare state save more is no accident, but direct psychological causality.

La Fontaine’s famous fable “La Cigale et La Fourmi” (Ciccada and the Ant) acknowledged part of this, four centuries ago. It is mandatory reading and memorizing in French elementary school.

Propaganda by the likes of Greenspan is part of the collapse of the United Stasi of America down the black hole of plutocracy unchained. Stasi? Merkel, October 24, 2013: “To spy between friends that does not work at all.” The colossal NSA spying is in violation of European, French and German law.

Meanwhile Norway, with its 3% unemployment, GDP per capita more than twice that of the USA, superlative infrastructure, one billion dollar national wealth fund (100 billion at the scale of the USA), is inaugurating an anti-Islamization government. The right wing spokesman of the new right wing government rightly points out that immigration without integration is only ruin of civilization (as the Romans found out). He said what was at stake was the colossal Norwegian welfare state, the necessity to defend it.

Meanwhile France is facing a strike of the soccer clubs. A 75% tax on income above one million Euros has brought the ire of the rich.

Yet, polls show that 85% of French people approve of the 75% tax on income millionaires. And why should some ignorant who kicks a ball be paid a fortune, and an engineer or nurse very little? This is also a question Brazilians have as they face cuts in social services, while circuses are going up.

If we want a human society, we have to make sure that plutocracy is kept in check. and only thus can welfare, hence savings, and consideration, thrive. Taxes is the way to do it, lest the core rots away (as it did in Rome; by 400 CE, the empire could not even afford to defend its borders, as I have explained many times).

Be it only to brandish a sword, one needs a heart, and a soul. And having a soul also means not to intrude with all the powers in other people’s souls: down with the United Stasi of America!

***

Patrice Ayme

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9 Responses to “Welfare Generalizes Savings”

  1. Mike Borgman Says:

    Greenspan could have peacefully lived out what remains of his otherwise pointless existence in self exiled obscurity and no one would have remembered nor cared. That is if A.G. had taken GWB as a modern day example of how to disappear but Greenspan wasn’t finished damaging our society so he wrote a book. No one will ever understand these people other than their own ilk but it’s a fairly safe bet that this behavior is linked to some yet undiagnosed mental illness.

    • Patrice Ayme Says:

      Mike: That’s his second book actually! I think that mental illness is called “greed supreme”. Greenspan just wants to make more money, and wants to justify, desperately, that he was not a creep. Reminds me of Hitler’s testament, having strictly learned nothing after admitting in self pity earlier one had been completely wrong (as Hitler did to his cabinet, and Greenspan did to the Senate).

      Greenspan has been damaging to the world, the society of the world. The ultimate irony about somebody like that is that, although of Jewish origin, he embraced fascist doctrine of the survival of the strongest.
      PA

  2. Paul Handover Says:

    Fascinating connection. One which supports the broader proposition that the greater the levels of inequality in a country, the greater the social dysfunction.

    However, it would be revealing to see a third measure added to Krugman’s figures. That of the cost of Government in relation to the degree of welfare. My hunch is that some countries’ cost of Government is far too high, the UK being one that comes to mind.

    It’s not just tax rates but how smart a country’s tax structure is. And how fair!

    • Patrice Ayme Says:

      Paul: Interesting question, indeed. Right now the tax level in France is the highest. In the world. There is an attempt to solve various problems in France at this point with more governmentalism (although taxes are also lowered for companies and methods from Germany introduced on company boards, to replace confrontation by concertation).

      History may answer your question. The longest regime in the world was actually the Roman one, based in Constantinople (it lasted around a millennium or a bit more depending if one stops it in 1204 (conquest by a Frankish army) or 1453 (annihilation by Turks)). The tax rates there could be close to 90%. Sometimes. Taxes is not why the regime went down.

      As you point out, what’s important is how fair taxes are. That’s why the 75% tax on income in France is well accepted, whereas taxes for little people, much less so.
      PA

      • Paul Handover Says:

        Few years since I have been to France but in past times, I used to spend many Summers pottering about the place. Always struck me as one of the more civilised places in the world!

        • Jeff McG Says:

          As Krugman pointed out, France is trying to balance its budget by upping taxes… And that infuriated some commissars in Brussels, showing, as Krugman said, that, truly, those who talk loud about unbalanced budgets are actually after the (welfare) state. In other words they are plutocratic Trojan horses.

          Yes, France is really nice, civilization her mission, I wished I could go visit there sometimes again … Junkers, the polyglot extremely polished criminal (?) 19 years PM of Luzembourg, an incarnation, Berlusconi style, of all what’s wrong, was just thrown out…
          PA

  3. pshakkottai Says:

    Hi Patrice:The three types of economy are:

    B. { DEFICITS – NET IMPORTS = PRIVATE SAVINGS} is the balance for USA, a monetary sovereign, money creator is the CORRECT one for the govt.

    A. {STATE_ TAX+NET EXPORT =STATE_SPENDING + STATE_GOVT SAVINGS = STATE_SPENDING – STATE_GOVT_DEBT } for the states and counties and euro nations, all Money users.

    And C. {INCOME = SPENDING + STATE_TAXES + FEDERAL_TAXES + SAVINGS} for individuals and businesses, also money users.

    Only the govt can create DEFICIT= FEDERAL_ SPENDING – FEDERAL_ TAXES and feed the private sector (states and persons) with or without federal taxes (like India which has no state income taxes). There is no A in India.

    Everybody talks about A the obsolete balance including Obama, the congress and mainstream economists. The real balance is B which is deliberately hidden.

    A monetary sovereign can do with lower taxes. How much lower?
    We can estimate as follows.
    Suppose we fund Medicare for all by deficits instead of Obamacare costing $ 2Trillion

    AND

    SS by deficits and no FICA people save FICA taxes saving 40% payroll and 40% income taxes which is about 80% income taxes = GDP/(5*Govt funding*80% *tax/govt funding) = 17 trillion/5*0.8= 4.5 Trillion assuming spending = taxes.

    AND free university education = 2 trillion

    The total is (2+ 2 + 4.5) Trillion with a new GDP = 5* ( 4.5 +4) = 42.5 trillion

    The GDP jumps up.
    Also inequality goes down. Is there a downside to this? None that I see. Even if taxes are left the same for the wealthy. In this example taxes have been reduced by 4.5 Trillion and GDP has jumped up to
    42.5 trillion .
    Partha

    • Patrice Ayme Says:

      Dear Partha: I do not understand C.

      The main problem, and I have talked about it many time, is that the economy is vampirized by an oligarchy, and that oligarchy is actually a plutocracy. so lots of things that Obama could do to help the economy and the people he does not do, when it does not help the plutocracy.

      It has nothing to do with A, B, C. It has to do with economy P. P like Pluto.

      Tomorrow I will put out my Obamacrap piece, showing a particular case of this. deliberate sabotage of the people’s economy.
      PA

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