Political Theory

Re: Is it possible to bankrupt the state through welfare?

Ron Marquis — Tue, 19 Apr 2011 03:26:20 GMT

Thank you..

Re: Is it possible to bankrupt the state through welfare?

John James — Tue, 19 Apr 2011 03:20:02 GMT

Again, as others have mentioned, it would be nice if you would acquaint yourself with some basic economics...but definitely some history.

Here's a few great resources:

The New Deal in Old Rome

Early Speculative Bubbles and Increases in the Supply of Money

"Welcome to Zimbabwe"

"Currency Failures from Argentina to Zimbabwe"

Re: Is it possible to bankrupt the state through welfare?

Ron Marquis — Tue, 19 Apr 2011 02:43:22 GMT

I think the power of a State, even if only a province of a greater government, far exceeds the likelyhood that mere bankruptcy could desolve it.

California issued IOU's to unemployment recipients and ordered them legal tender in such matters as overdue rents and perhaps mortgage payments. If in turn the landlords and property owners pay their taxes to California with these IOU's, when will California collapse?

Re: Is it possible to bankrupt the state through welfare?

Ron Marquis — Tue, 19 Apr 2011 02:32:40 GMT

Isn't Cal;ifornia bankrupt as well? I understand the unemployment IOU's there were declared legal tender to pay rent, etc.

Re: Is it possible to bankrupt the state through welfare?

John James — Tue, 19 Apr 2011 02:15:54 GMT

Getting to the heart of the original question, I think it is possible.

Jeffrey Miron claimed that Friedman had it backwards when he said open borders would be proper on principle, but the welfare state would make that disasterous. Miron claims that "we should open borders in order to eliminate the welfare state".

I couldn't believe he could be so short-sighted. He actually says that if lots of people start coming and living off the public dole, the populous will realize it doesn't want to spend all this money supporting people and they'll vote to reduce all these welfare measures. I seriously don't get it. It's like a Krugman argument. It's like he forgets the fact that all these immigrants he's talking about will vote as well.

It is entirely possible for the majority of the people to continue to vote themselves more and more benefits until, as Jonathan pointed out, the only option is to print the money. Hell, this is what is happening now.

Re: Is it possible to bankrupt the state through welfare?

K.C. Farmer — Mon, 18 Apr 2011 21:32:55 GMT

Bankruptcy in terms of a state applies only to it's dealings with other states. In that sense you could impact a state through excessive expenditures via welfare, other entitlement programs, military, science projects, cash for clunkers, etc. The U.S. Government has done it's best to put itself in this position, but what it presently has going for it is it's currency's status as the world reserve currency and a very large consumer market. Should this change, it would be a pretty rapid decline to pauper status among other states.

Now bankruptcy doesn't prevent a state from squeezing every bit of life out of it's citizenry, or those who reside within the borders. The state will continue to print money for as long as it can get away with it. The nation will decline. Some states do rebound, depending on the severity of it's debts. Others continue in a state of decline akin to some post-apocalyptic movie. Decades of pain for those who live there, and the years of work to get back to some degree of a respectable lifestyle could in the end just return back to the same situation as the start - a State the same as before.

Re: Is it possible to bankrupt the state through welfare?

JeffB — Mon, 18 Apr 2011 20:48:04 GMT

Prateek Sanjay:

PS: I guess you are already familiar with the Cloward Piven strategy.

Thanks. I was trying to find the name for that strategy.

For anyone who may not have heard about it here is a link to the Wikipedia article:

http://en.wikipedia.org/wiki/Cloward%E2%80%93Piven_strategy

and the article they penned that started the controversy:

The Weight of the Poor: A Strategy to End Poverty

Re: Is it possible to bankrupt the state through welfare?

liberty student — Fri, 18 Mar 2011 16:50:55 GMT

DD5:
It's not so funny. Education is not food, but as far as the principle at hand is concerned, they are different only in our minds that value them differently. You know this perfectly well. There isn't necessarily an inherent contradiction between taking from that you are also seeking to end when choice is not free from coercion. What the vital necessity of using the roads is for one person, using the public school system is for another. I actually don't think you will disagree with this.

I've addressed this in another thread. I tire of repeating myself, so please hit me up in the appropriate spot.

Re: Is it possible to bankrupt the state through welfare?

MrSchnapps — Fri, 18 Mar 2011 04:56:43 GMT

I wasn't aware they are leeching of other provinces. Then again, I don't know much on the subject., except that they want to secede. Now that you mention it, how on earth can they secede if they need Canada?

Any serious attempts at secession were dropped after the passing of the Clarity Act, which was basically a codification of the earlier Supreme Court ruling instituted on behalf of Chretien. The Clarity Act sets out a number of conditions to be met if a province wishes to secede from Canada. It's practically impossible for Quebec to come even close to fulfilling them, however, since (if I recall correctly) they also require the consent of the other provinces or a majority of them to even begin looking at the issues. Besides the myriad of other near impossible conditions, obtaining that kind of consent makes the whole thing a dead issue.

Besides, as you pointed out, all Quebec can do is play the role of getting for Quebec what it can get, which in more recent times has been the demand: "Give us a ton of money and pay for a hockey rink or we'll refuse to pass the budget and force an election."

So, yes, in that sense they are a bigger leech than the rest of the provinces. Talk of secession is just bluster and rhetoric; they need Canada badly to remain solvent.

Re: Is it possible to bankrupt the state through welfare?

Caley McKibbin — Fri, 18 Mar 2011 04:44:12 GMT

I wasn't aware they are leeching of other provinces. Then again, I don't know much on the subject., except that they want to secede. Now that you mention it, how on earth can they secede if they need Canada?

That is the conundrum that nobody ever asks. How do they emulate France when they can't lean on Toronto and Calgary? Must have been the 51% that voted no that realized this.

Re: Is it possible to bankrupt the state through welfare?

Drew — Fri, 18 Mar 2011 04:16:38 GMT

@Caley Mckibbin

I think you were the one who said that Quebec is a "leech province". I live there, and I'm aware that Quebec is going through a huge debt, I think around 222billion$.

I wasn't aware they are leeching of other provinces. Then again, I don't know much on the subject., except that they want to secede. Now that you mention it, how on earth can they secede if they need Canada?

Re: Is it possible to bankrupt the state through welfare?

Caley McKibbin — Fri, 18 Mar 2011 04:05:02 GMT

I'm not going to help people be miserable. They do a great job of that alone. I'm not going to waste energy trying to help people that don't want it. People dumb their selves to death by the day. So, may as well cut to the chase and ask whether should we shoot everyone that disagrees.

Re: Is it possible to bankrupt the state through welfare?

DD5 — Fri, 18 Mar 2011 03:42:25 GMT

liberty student:
You certainly aren't supporting the private school system.

But you certainly aren't not supporting them, because this isn't exactly fair market competition where an exchange demonstrates that one values the benefit of the "service" higher then its costs. So I don't fully understand what you are implying here.

liberty student:
Either comparing education welfare to food, or making a "what about the roads?" argument in this context of this debate. It's quite funny really..

It's not so funny. Education is not food, but as far as the principle at hand is concerned, they are different only in our minds that value them differently. You know this perfectly well. There isn't necessarily an inherent contradiction between taking from that you are also seeking to end when choice is not free from coercion. What the vital necessity of using the roads is for one person, using the public school system is for another. I actually don't think you will disagree with this.

Re: Is it possible to bankrupt the state through welfare?

Clayton — Thu, 17 Mar 2011 22:01:21 GMT

Pressing that Red [fictitious] button to instantly annihilate the State also has consequences. You will "hurt other people". Are you saying you won't press it? Because the above sounds a bit of the consequantialist type argument. It doesn't hold very well in my opinion. It can be used to justify the State almost indefinitely.

There is a difference between advocating to remove the State (ASAP, instantly if it were possible) and to deliberately use statist measures of violence to somehow "overload" the system. Both measures have consequences, many of them negative (at least for some time) for many people. But so what? It's the method that should be condemned, and not the consequences per se.

The biggest issue I have with your argument is this: That you are implying that to take from the State is to support the State. If I send my kids to public school, then I am somehow supporting the public school system. That's like saying that if the hostage eats the meals of his kidnapper, he somehow supports his enslavement?

I believe the Hoppean approach (gradual privatization) is superior to the Rothbardian approach (overnight liquidation) because so many aspects of the State are imitative of genuine property. Public lands, public roads, public beaches, etc. are handled by the State just as they would be handled by a private owner (exclusivity) - except they are taken poor care of. The unintended consequence of the French Revolution approach to disbanding the State is that it simultaneously breaks down the social fabric that keeps respect for private property strong. In the course of smashing out the windows to the King's palace, rioters are emboldened to smash out the windows to the surrounding private houses, many of which were built on pure, old-fashioned, honest elbow-grease. Now that I think about it, perhaps this is why the State is so careful to make itself appear like any other property holder... to force all other property-holders to act in its defense out an indirect concern for their own property.

Clayton -

Re: Is it possible to bankrupt the state through welfare?

liberty student — Thu, 17 Mar 2011 21:57:32 GMT

DD5:
Pressing that Red [fictitious] button to instantly annihilate the State also has consequences.

I am not arguing for that. On the contrary, I am saying that ending the state without a people ready for it won't last. If my goal is a long term libertarian future, then its probably not in my interest to push the button (maybe to maintain the threat though), but if my short term goal is to end the state, then yeah, I guess I could push it and sort out the consequences later.

DD5:
There is a difference between advocating to remove the State (ASAP, instantly if it were possible) and to deliberately use statist measures of violence to somehow "overload" the system. Both measures have consequences, many of them negative (at least for some time) for many people. But so what? It's the method that should be condemned, and not the consequences per se.

I didn't want to, but I am making moral arguments in the other thread now, and I was hoping to speak the language of the pro-welfare people which is pragmatism (ends not means). I believe the means are very important, and have to be aligned with the ends, hence the thread topic. Can means X lead to result Y?

DD5:
The biggest issue I have with your argument is this: That you are implying that to take from the State is to support the State.

One this is not my position, and two this is not the approach I am taking in this thread. I loathe a lack of precision in debate, so perhaps you want to double check your premises and locate your argument in the right place.

DD5:
If I send my kids to public school, then I am somehow supporting the public school system.

You certainly aren't supporting the private school system.

DD5:
That's like saying that if the hostage eats the meals of his kidnapper, he somehow supports his enslavement?

I like how everyone ends up at two places. Either comparing education welfare to food, or making a "what about the roads?" argument in this context of this debate. It's quite funny really.