greeneyed wrote: ↑September 4, 2020, 4:47 pm
Mickey_Raider wrote: ↑September 4, 2020, 1:41 pm
greeneyed wrote: ↑September 4, 2020, 12:22 pm
Mickey_Raider wrote: ↑September 4, 2020, 11:04 am
greeneyed wrote: ↑August 27, 2020, 7:29 pm
Libertarianism isn’t really consistent with making superannuation optional, but giving everyone a pension. Because the universal pension is a massive imposition on taxpayers... it’s just a compulsory transfer of wealth from future to current taxpayers. It’s not sustainable when taxpayers are a shrinking proportion of the population.
Libertarians would logically argue for no government pension at all, alongside optional superannuation.
But that is not a society I’d like to live in.
GE I have two postulates for you followed by a question:
1. No one except the federal government can create Australian Dollars. If you or I try to create AUD's we get thrown in jail for counterfeiting.
2. Australian taxpayers must pay their taxes in AUD's. You can't pay them in USD or sea shells or loaves of bread.
So, considering the above, if taxpayers are the ones who fund social spending such as the pension; and no one except the Fed can create AUD's; where do taxpayers get the money in the first place in order to pay their taxes?
You should think of money as just a tool of exchange, which governments manage.
The real economy is created by work and output. That enables people to consume and invest. Governments also produce outputs (and engage in transfers) by taxing various parts of the real economy.
Before money, people worked to produce what they needed to live and bartered goods. There was still a real economy... production and consumption or investment create value. But money allow for a more sophisticated economy, with specialisation of work... and governments manage (print and mint) it to provide certainty. You won’t need actual money at all, probably, in the future. It’ll be all electronic... but the financial system works because of the rules, framework and certainty government provides.
Transfers like pensions, simply redistribute incomes among the population. Taxpayer funded pensions are transfers from the current working population to those who are not. Pensions funded by superannuation are effectively deferred consumption of income generated by the individual (ignoring the tax concessions for superannuation).
Hope that helps!
With respect GE, you didn't answer my question.
If taxpayers fund the pension (or the military, or unemployment benefits or any other social spending), how do these taxpayers get the money to pay their taxes in the first place, considering the only issuer of the AUD is the federal government?
They work and produce. Production is the basis of real value in an economy. Money is just a standardised measure of value, which facilitates economic transactions. Governments can issue money, but it is worthless if there is not a substantive real economy to underpin it. You'll see in history how currencies collapse when the fundamental real economy is in disarray.
They work and produce? And how do the fruits of that labour (i.e AUD's) arrive in peoples banks accounts?
Keep in mind the postulate I presented earlier is not an opinion it is a fact - the ONLY way that money is created is through the RBA who create/issue money upon the instruction of Treasury.
I will get to the point so we don't keep going back and forth.
Despite a prevailing neoliberal myth that has played out over the last few decades and gobbled up by the (sometimes) well meaning but ignorant masses (thanks in large part to clowns like Thatcher, Abbott kicking it along) - taxpayers do not fund anything.
The government needs to spend money into existence before they can take back anything in taxes. To suggest otherwise can not be reconciled with the fact that if companies or private citizens try to create AUDs we go to the big house for counterfeiting. How can we pay taxes to the government without the money having being first SPENT into the non-government sector first? We can't.
It is a lot to digest when even intelligent people intuitively think of money in a fiat system the same way they think of personal or private business finance. We are constrained by our budgets. We cannot spend until we have the money in the bank or if we are happy to borrow and put ourselves at risk of default.
The Australian government on the other hand does not need to worry about any of this because it is the monopoly issuer of the Australian Dollars and any and all debts it has are denominated in AUD's. It does not need to worry about not being able to pay out a bond at maturity, because the RBA controls the spreadsheet.
The only thing that our government should be preoccupied when it spends is inflation and ensuring that our society has the real resources and infrastructure in place to cope with current and future demand.
When you cite the burden to future generations of an ageing population, respectfully, your lens is wrong. It isn't about ensuring that some arbitrary figures on an RBA spreadsheet don't pass a certain arbitrary amount ("cost to the taxpayer"), it is about ensuring that the productive capacity of our society can cope with a decrease in the amount of working and productive people in society. This is done through smart infrastructure, education, and investing to ensure that our future productive capacity is sound.