This Time It's Better (AKA 1936 and All That)

tomterm8

dtsazza wrote: »

I suspect it's down to the inference of what "wealthier" means.
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From a national perspective, wealthier means able to produce more stuff. That's different from an individual perspective; for example, Nigeria is very wealthy, but the vast majority of its citizens are not.

neverdespairgirl wrote: »

I don't quite get that. Would you say the same about the UK? Or any other country? That if the economy is working effectively, no-one at all would need income support, JSA, etc?

Food stamps, AIUI, is part of the social security system in the USA.

Not quite, there are exceptions for people who can't work such as the sick and children, and people who are being trained, but broadly speaking it would be hard to argue that someone who is not working is more productive than someone who is. An effective economy is all about maximizing the return from resources. That's particularly the case with human resources since there is no value to human resources laying idle - unlike coal, say, where it may increase in value if it is left in the ground. (If a person is unemployed for 1 hour, you can never get the work they would have done for that 1 hour back).

It comes down to an very old fashioned economics argument, NDG. The answer many neo-conservative economists come to is that people choose to be unemployed.

(That's nonsense, IMHO. But it is the conclusion some eminent economics professors believe in).

The question has a direct relevance to the benefits argument, because answering this is the difference between thinking people who are unemployed are f.eckless, and we should just remove their benefits - then they would find work - or people who are unemployed simply being unable to find work because the economy isn't efficient.

sunshinetours

Are you suggesting that there are not masses of benefit claimants who are better off financially being on benefits (housing benefit etc) than working in low paid jobs - I can't believe you are saying that? Solving that probelm is one of teh biggest challenges facing any current or future governement

Also the simple fact that a country is more "wealthy" does not reflect on how that wealth is distributed amongst its population.

Not totally relevant to this but of note, is one of the biggest issues facing the US is its healthcare system

1984ReturnsForReal_2

In the 1930s did they have a welfare bill in the US?

They brought in the social security act in 1935, but even then the modern welfare schemes were introduced bit by bit, mainly during the 1950's.

As I understand it, the main welfare assistance during the great depression were make work schemes, and government food hand outs. Although, there were schemes at state level.

Of sorts. You got certain food items free if you bought food stamps. That served the twin purposes of propping up agricultural prices and providing cheap food.

The New Deal brought in social security and home construction to house the poor and homeless. Before that, there was a system of poor relief and charity based on local areas. It worked, AIUI, like poor relief in the UK prior to the New Poor Law that introduced workhouses in a systematic way to the UK.

Excellent. So when we are talking % of people out of work now compared to 1930s' its important to remember the costs now far outweigh the costs of the 1930s regardless of the fact there was an additional 50% out of work.

In terms of finances the USA is just as !!!!!!ed, if not more, than it was then.

tomterm8

sunshinetours wrote: »

Are you suggesting that there are not masses of benefit claimants who are better off financially being on benefits (housing benefit etc) than working in low paid jobs - I can't believe you are saying that? Solving that probelm is one of teh biggest challenges facing any current or future governement

I'm saying there are a number of reasons people capable of work could be unemployed. One is there are no jobs, another is they don't have the skills to do the jobs available or are in the wrong place, a third is that they are unwilling to work at a job.

There is a great deal of evidence that recessions are concurrent with increases in unemployment.

I guess you could explain that away by saying that suddenly millions of people coincidentally decide they don't like to work after all.

sunshinetours wrote: »

Also the simple fact that a country is more "wealthy" does not reflect on how that wealth is distributed amongst its population.

Which is what I said.

HOWEVER, an effective economy will always maximize employment, whatever the distribution of wealth is.

sunshinetours wrote: »

Not totally relevant to this but of note, is one of the biggest issues facing the US is its healthcare system

Yes, I agree, it is staggering that Americans pay almost as much for Medicare as we do in the UK, but get so much less for their money.

1984ReturnsForReal wrote: »

In terms of finances the USA is just as !!!!!!ed, if not more, than it was then.

By some calculations I've seen, total government and quasi-government (states, various federal body) spending in the US rose to 40% of GDP during the recession. It was at 20% just before world war II. A large proportion of this was raised via debt rather than taxes.

Generali

1984ReturnsForReal wrote: »

Excellent. So when we are talking % of people out of work now compared to 1930s' its important to remember the costs now far outweigh the costs of the 1930s regardless of the fact there was an additional 50% out of work.

In terms of finances the USA is just as !!!!!!ed, if not more, than it was then.

All perfectly true. IMHO (and I believe in yours) the USA can't afford to pay what has been promised to citizens and creditors.

That's different from the original point however which is that unemployment is not higher than it was in the 1930s despite the gloom.

Really2

purch wrote: »

....and we have the Internet nowadays too :eek:

But they never had talktalk then, so it evens out.

John_Pierpoint

Generali wrote: »

There seems to be a misconception, probably fuelled by hyperbolic newspaper stories, that the current situation is worse than it was in the 1930s, especially in the US. This is bunkum.

For example:

unemployment is at the highest it has ever been. There are more people on food stamps than ever before - more people depending on the state for a food hand out than ever did in the great depression. It has worked so well that there are more people who rely on charity simply to be able to eat than any civilised nation I know of...

This is incorrect in almost every way. US unemployment is a little over 9% now having peaked at 10.1% in October 2009.

In the 1930s it was above 15% most months. The current unemployment figures have been measured in a continuous series by the BLS using the CPS (too many TLAs, sorry!) since 1940. In 1940 the unemployment rate was 14.6%. In addition, female unemployment would barely have been measured in the 1940s.

The safety nets have been continuously extended (at least twice by the Federal Government, many more times by the states and counties). The rate of food stamp use is far less now than it was in 1939 when they were first introduced. That was a time when every estimate of 1930s unemployment I've ever seen was well below the peaks seen in the early-mid 30s (unemployment peaked at about 25% in 1932-3). It should also be remembered that until the mid-70s, food stamps had to be bought by all but the destitute, they weren't just handed out like they are today.

Food stamps are distributed pretty generously these days in the US. A family of 5 can receive food stamps if they have a gross monthly income of $2,687 (about £20,000 a year). Not great riches but hardly breadline, especially given that most of the US is a lot cheaper to live in than the UK.

Perhaps it is technically true because the population of USA has more than doubled since then.

http://www.demographia.com/db-uspop1900.htm

The Great Depression appears to have cut the rate of population increase, perhaps immigration figures fell of a cliff?

Do we agree that the technical complexity of modern economy has made a higher proportion of the population "unemployable" at minimum wage levels?

Generali

John_Pierpoint wrote: »

The Great Depression appears to have cut the rate of population increase, perhaps immigration figures fell of a cliff?

Do we agree that the technical complexity of modern economy has made a higher proportion of the population "unemployable" at minimum wage levels?

IIRC, migration controls were introduced in the 1920s and toughened in the 1930s to try to restrict immigration to North Western Europeans.

For many low skill workers in The West they face a problem. They can't compete on price with workers from The East. The interesting question is what do they do? In the past they could have taken the dole but it seems that taxpayers are increasingly unwilling or unable to support a massive welfare state. My guess is there will either be a mass vote/revolution looking to force middle and high earners to prop up the poor or there will be a return to a servant class.

Kennyboy66

John_Pierpoint wrote: »

Perhaps it is technically true because the population of USA has more than doubled since then.

http://www.demographia.com/db-uspop1900.htm

The Great Depression appears to have cut the rate of population increase, perhaps immigration figures fell of a cliff?

Do we agree that the technical complexity of modern economy has made a higher proportion of the population "unemployable" at minimum wage levels?

Immigration did fall off a cliff in the 1930's.

In fact - the number of people who emmigrated from the USA outnumbered immigrants in the early 1930's.

Approx 500,000 Mexicans were also forcibly deported or encouraged to leave (Mexican repatriation Act)