WTF!!!- Rudd to bring back compulsory Study Unionism in 2009!!!

[Collin Li]

What I meant to say was: arguing that the government should subsidise particular goods and services (such as healthcare and education) is a totally different argument to saying the government should force people to purchase particular goods and services. The latter is totally indefensible. The former, I acknowledge, is defensible to some degree.

Externalities need to be fixed with much less distorting government practices. The public school system could be invigorated by a voucher system, and the decommissioning or relaxation of the Department of Education's regulations. There are certainly grounds for government intervention, just not the type that is employed in most countries today.

[excal]

At a conceptual level, there are four possible outcomes of VSU payment:

- a person will pay, no matter what
- a person would pay, but can't be bothered
- a person would pay, but can't afford it
- a person won't pay

Like I've suggested, instead of satisfying certain groups, why not seek a common ground? A system where you could choose to contribute, but where the government / university provides a 'lubricant' of sorts. When you reduce the opportunity costs by simply providing a check-box: 'do you wish to pay your union membership through your HELP loan', you satisfy the middle two groups. The fact you can pay at all will satisfy the first and that you can choose not to pay will satisfy the last.

Ideology is can be a good way to guide decision making at a high level, but when it really counts, you really do have to be pragmatic about it. And, in reality, each sector is going to have its quirks that will cause policies by a person spitting out ideology fail at least some of the time.

[Collin Li]

Because there are both economic and social costs associated with high income inequality. I think anyone would agree that it is detrimental to a society to have a massive gap between the rich and poor, which comes to exist when markets are left free from government intervention. For example, when the 'Chicago Boys' took reign of the Chilean economy between 1973 and 1989 average wages plummeted, the minimum wage plummeted and the standard of living steadily decreased and the poverty rate saw a massive increase. Another example is New Zealand, which in the 80s and 90s also saw large scale deregulation (although not to the extent of Chile). Again, there was a massive increase in poverty and economic growth stagnated, despite the rest of the world's economy growing steadily.

"The deregulation of government-owned enterprises in the 1980s and 1990s reduced government's role in the economy and permitted the retirement of some public debt, but simultaneously massively increased the necessity for greater welfare spending and has led to considerably higher rates of unemployment than were standard in New Zealand in earlier decades. However, unemployment in New Zealand is again low, hovering around 3.5% to 4%."

The welfare state, commissioned by governments, sets up externalities which supposedly need to be fixed by more government intervention. Natural externalities ought to be fixed, artificial externalities need to be stopped. Also, when government gets out of the way, it's no surprise that some short term losses need to be faced, as firms need to restructure and orientate themselves towards a more efficient framework.

I cannot find anything about the Chilean deregulation, except that it was a military government. Not much property rights there, I imagine.

[Mark]

^Pinochet and his military government were indeed supporters of property rights. His government was backed by Milton Friedman, who was essentially an economic adviser to the authoritarian regime.

[costargh]

^Pinochet and his military government were indeed supporters of property rights.

Bullshit. Pinochet forced poor people off their land and leased it to the Rich for a 100 years for virtually nothing.

[Collin Li]

Actually, I did more research, and Pinochet's economic reforms are said to be a success. Of course you pay in short-term costs, for restructuring and re-orientation towards efficiency as mentioned with the case of New Zealand.

This does not mean I advocate Pinochet's human rights record though. They are different stories.

Read: http://en.wikipedia.org/wiki/Miracle_of_Chile

The unsmoothness of the ride can be attributed to non-free-market policies such as a fixed exchange rate:

"In his Memoirs ("Two Lucky People", 1998), Milton Friedman directed blame towards De Castro and the fixed exchange rate, claiming that it was contrary to the free market model."

[costargh]

Yeh. But in a quest for economic success is it 'right' to kick inefficient farmers off THEIR land and lease it to those who are Rich and have the potential for efficient production?

I don't advocate this form of imposing on rights of individuals in a quest for economic success.

[Collin Li]

Yeh. But in a quest for economic success is it 'right' to kick inefficient farmers off THEIR land and lease it to those who are Rich and have the potential for efficient production?

I don't advocate this form of imposing on rights of individuals in a quest for economic success.

No, inefficient farmers would voluntarily sell up (since they're not making anymore business, and are being offered a value that's worth more than how much they value the land, since they can't use it as well as the next owner). I'm not sure of the details of this military government, but a free-market system would have dealt with this in that manner.

No, I'm not condoning Pinochet's human rights record. Look, it's either: it wasn't free market, so that's a futile example, or: it was, and hey it worked pretty well (after a hiccup involving fixed exchange rates).

[brendan]

I think anyone would agree that it is detrimental to a society to have a massive gap between the rich and poor,

You could increase equality by making everyone equally poor. Suppose there were some policy that would make the rich poorer without affecting the income of anyone else, by definition this would reduce the "gap", but would you want the Government to flip this switch?

[brendan]

recognition of the hardship that upfront
fees place on students.

That is so BS, they sure didn't recognize that when VSU was being introduced.

[Mark]

I think anyone would agree that it is detrimental to a society to have a massive gap between the rich and poor,

You could increase equality by making everyone equally poor. Suppose there were some policy that would make the rich poorer without affecting the income of anyone else, by definition this would reduce the "gap", but would you want the Government to flip this switch?

No. To put it simply, I was highlighting the fact that having lots of poor people and a few rich people in an economy is a bad thing. That is, without consumer spending (which relies on normal people), an economy will fall apart because people aren't buying things, which is bad for everyone. Effectively maintaining a certain level of equity is good for an economy.

[brendan]

No.

Why not? You are reducing inequality.

[orsel]

I'd question whether those 'student services' were that essential, especially if so few people signed up for VSU: e.g. "sporting facilities, child care, counselling and other student services"

Counseling, fair enough. Child care, debatable; does it have to be at the uni and not a childcare centre?


Sporting facilities. lul.

If the uni wants to retain bragging rights for having no.1 [insert sport] uni team they can pay for that themselves. Or if their justification is that it adds to the 'atmosphere' of the uni... well they can pay for that too. I'm going to uni to get a degree; if I wanted to use sporting facilities I'd do that in my own time.


'Other' student services? Such as?

I'm going to go against this one too since I assume it doesn't include free lapdances.

The crap, which will be indexed each year,

fixed

[brendan]

What's so special about sporting facilities anyway that it must be effectively underwritten by the taxpayer?

[Collin Li]

Remember, the economy exists in order to benefit the people - not the other way around.

I certainly agree with that, and freer markets improve the ability of economies to do this.

Look at how the sharemarket is going down in reaction to Obama, a typical high-spending Democrat. First year macroeconomics might have you think that high spending is good for the economy, but government spending is also funded by some kind of taxation.

Economies are much better stimulated by lowering taxes (and to keep a balanced budget, lowering government spending). Let the people spend their own money, they use it the best, and that helps the economy provide the most useful services to society. After all, the economy is supposed to serve society, not the other way around.