The Great Big Homelessness/Capitalism/Socialism Thread

economic

GreatApe wrote: »

While the government represents 45% of the economy it only represents 17% of the workers
The 17% is probably more representative of how much control the government exerts

1.5 million work for the NHS
I would argue the NHS is more efficient than a realistic free market alternative because doctors are clever people and they form rackets in the guise of keeping safety and standards up. £220,00 average physician wages in the USA vs about 1/4th of that in the NHS. So we are getting value. Of course you might argue you can create a proper competitive healthcare market where doctors are paid £30k a year but I don't trust that to be a realistic outcome

400,000 work for the armed forces and police. Most people would agree those services should be done by the government

Take those two groups out and you get to about 11% working for the government outside of Health police and armed forces. I'm sure there are other state workers that should not count eg the courts perhaps firemen etc so let's round it down to 10%

This is how we can be a rich efficent country.
Although the government controls 45% of the funds it only controls about 10% of the man power (exc heath police armed forces)

Even if they are inefficient they only control 10% of the workforce to be inefficient with

It seems to be a successful formula.
We have far better fed housed and educated lower class than the Soviets could dream of
It's also why comrade corbyn and McDonalds face are dangerous they want to expand this 10% to as high a figure as they can with a program of nationalisation. That would be dangerous and probably end in disaster

You are not looking at the full picture. What about the differences in pensions between US doctors and UK doctors?

US doctors can only contribute to their pensions from their salaries. UK doctors can do the same for a tax benefit PLUS receive pension contributions from the NHS and of course on top of that will receive a state pension.

How generous is a NHS pension? The NHS employers contribute just over 14% of pensionable income for every NHS employee. This is on top of the employee contribution of upto 14.5%. Most doctors i would imagine earn between 70k to 100k so their contribution limit is 13.5% of pensionable income. These % are net of tax, so the true cost to the employee is less given tax relief.

US doctors would still be more expensive then UK but the gap between the two is a lot less then you think especially if you use the median wage rather then the mean which i think you used.

The problem with these generous pensions in the UK is that doctors are retiring early as they would have accumulated quite a bit in pensions contributions on top of their savings from income. Experience means doctors get better at their job so its more wasteful for a doctor to retiree early say 50 then at 60 when he could have provided 10 more years of service using valuable experience he has developed. The other question you need to ask is what is the quality of service offered by the median NHS doctor vs a US doctor? I do not know the answer to this and i would imagine it depends on what type of treatment. I would guess the US doctors are superior.

---

But anyway this raises another important issue more relevant to this thread. Pensions. Unfunded liabilities (i.e. pension) are a huge unknown and what impact it will have for futures generations is unclear as there are so many moving variables. Not surprising - it is the economy and financial markets we are dealing with here.

economic

There are a lot of NHS doctors who have retired and are retiring over the next decade who are on defined benefit plans. These plans are very expensive to the taxpayer who are funding it. DB plans are widespread in the public workers so its not only NHS doctors.

The true cost of public sector workers certainly needs to take this into account.

Pension liabilities in the public sector assume that the return on investments (largely stocks) to fund the pension is guaranteed at a rate that is probably around 6-8%. However we all know that there are no guarantees in the stock market. The problem is these pensions are guaranteed. So in essence you have an accounting fraud going on.

What should be used to discount the liabilities is the government bond yields so around 2%. This would cause liabilities to rise suddenly and we have a huge shortfall. Who will pay for this shortfall? Well it could be UK bondholders who would take a haircut but that wont happen as that's effectively a default of gilts. Of course it will be current and future taxpayers. They already are paying for the shortfall, they just don't know it as its well hidden.

Its like saying lets fund these pensions with BTC. BTC has an expected return of what 50% given history? What happens when we discount pensions liabilities with 50% return? More or less the liabilities reduce by a third. Just crazy accounting and no long term thinking whatsoever.

GreatApe

economic wrote: »

You are not looking at the full picture. What about the differences in pensions between US doctors and UK doctors?

US doctors can only contribute to their pensions from their salaries. UK doctors can do the same for a tax benefit PLUS receive pension contributions from the NHS and of course on top of that will receive a state pension.

How generous is a NHS pension? The NHS employers contribute just over 14% of pensionable income for every NHS employee. This is on top of the employee contribution of upto 14.5%. Most doctors i would imagine earn between 70k to 100k so their contribution limit is 13.5% of pensionable income. These % are net of tax, so the true cost to the employee is less given tax relief.

US doctors would still be more expensive then UK but the gap between the two is a lot less then you think especially if you use the median wage rather then the mean which i think you used.

The problem with these generous pensions in the UK is that doctors are retiring early as they would have accumulated quite a bit in pensions contributions on top of their savings from income. Experience means doctors get better at their job so its more wasteful for a doctor to retiree early say 50 then at 60 when he could have provided 10 more years of service using valuable experience he has developed. The other question you need to ask is what is the quality of service offered by the median NHS doctor vs a US doctor? I do not know the answer to this and i would imagine it depends on what type of treatment. I would guess the US doctors are superior.

---

But anyway this raises another important issue more relevant to this thread. Pensions. Unfunded liabilities (i.e. pension) are a huge unknown and what impact it will have for futures generations is unclear as there are so many moving variables. Not surprising - it is the economy and financial markets we are dealing with here.

You bring up good points I hadn't considered. How much are UK doctor pensions worth and do the USA doctors get any sort of state pension? I don't know.

My main point was the USA healthcare is a racket which it is even Milton Friedman was compiling about it in the 80s and 90s. They limit doctor numbers and they make it hard for foreign doctors to come over and start practising medicine the result of lower supply is higher prices. £220,000 for the median physician earnings are ridiculously high.

Overall the USA economy dedicates nearly twice as much resources to healthcare and I'm not convinced they have a more healthy peoples. The NHS due to its remit of looking after everyone with a fixed budget acts as a counter to the medical professions propensity to successfully drive up their members wages. Even in the UK we train too few doctors but at least we make it easier for foreign doctors to come in and start practising.

economic

http://uk.businessinsider.com/defined-benefit-pension-transfer-wealth-from-workers-to-companies-2016-8

Herzlos

economic wrote: »

http://uk.businessinsider.com/defined-benefit-pension-transfer-wealth-from-workers-to-companies-2016-8

I started not long after my place shifted from DB to DC, so whilst my older colleagues will get a pension of about 2/3rds salary I'm getting what currently looks like about 1/5th salary. They can't set their contribution rate and it's fairly high (~10%) and I'd need to pay in about 18% to match it.
So I'll retire later (70's?) and significantly poorer than the previous generation, and I'm one of the better off. We're going to b totally screwed in another 40 years.

economic

Herzlos wrote: »

I started not long after my place shifted from DB to DC, so whilst my older colleagues will get a pension of about 2/3rds salary I'm getting what currently looks like about 1/5th salary. They can't set their contribution rate and it's fairly high (~10%) and I'd need to pay in about 18% to match it.
So I'll retire later (70's?) and significantly poorer than the previous generation, and I'm one of the better off. We're going to b totally screwed in another 40 years.

But you are expected to live a better quality of life givne medical advances and other technological innovations that will come about over the next 20 years.

You dont know what the world will look like in 10 or 20 years. Would you need so much wealth in an era of AI, automation, cheaply and efficiently produced food and energy?

Or none of that will happen if we go down the route of socialism. take your pick.

Tromking

economic wrote: »

The true cost of public sector workers certainly needs to take this into account.
Pension liabilities in the public sector assume that the return on investments (largely stocks) to fund the pension is guaranteed at a rate that is probably around 6-8%. However we all know that there are no guarantees in the stock market. The problem is these pensions are guaranteed. So in essence you have an accounting fraud going on.

My public sector pension is part of my current terms and conditions deferred until retirement Old Boy!
That’s why Phil Hammond pooh pooed the ending of the public sector pay freeze a while back, he was factoring in the cost of our pensions and adding it to our basic salary and using it to justify the seven year freeze.

Arklight

GreatApe wrote: »

Count your chickens all you like
4.5 years is a long time in politics

And time isn't on Corbyn side he will be 73 at the next GE asking the public to let a 73-78 year old communist run the country. No thanks.

When I've campaigned I certainly heard people say, "No thanks we remember the Callaghan government" and we'll not vote Labour again.


The problem that your "side" has is that these people appear to be unable to remember the Thatcher government either, or have much awareness of this one. A lot of them won't be around to vote in the next election and the cries of "Communist", "Marxist". "Trotskyite" etc just has no traction with younger voters.


Especially as most of them have the wherewithal to look up what these terms mean and learn they have no relation to Labour's, pretty centrist. manifesto.


Communist is confiscating property and nationalising supermarkets, the other end of the scale of your lot's bluster is the violent overthrow of government.


If you stopped treating young people like they were idiots they might be more likely to... oh never mind carry on just as you are.


:-)

GreatApe

Herzlos wrote: »

I started not long after my place shifted from DB to DC, so whilst my older colleagues will get a pension of about 2/3rds salary I'm getting what currently looks like about 1/5th salary. They can't set their contribution rate and it's fairly high (~10%) and I'd need to pay in about 18% to match it.
So I'll retire later (70's?) and significantly poorer than the previous generation, and I'm one of the better off. We're going to b totally screwed in another 40 years.

Well if you and your peers had 4 kids each instead of 1.5 we could grant ourselves very generous pensions and retirement ages too

GreatApe

:T

Arklight wrote: »

When I've campaigned I certainly heard people say, "No thanks we remember the Callaghan government" and we'll not vote Labour again.

The problem that your "side" has is that these people appear to be unable to remember the Thatcher government either, or have much awareness of this one. A lot of them won't be around to vote in the next election and the cries of "Communist", "Marxist". "Trotskyite" etc just has no traction with younger voters.

Especially as most of them have the wherewithal to look up what these terms mean and learn they have no relation to Labour's, pretty centrist. manifesto.

Communist is confiscating property and nationalising supermarkets, the other end of the scale of your lot's bluster is the violent overthrow of government.

If you stopped treating young people like they were idiots they might be more likely to... oh never mind carry on just as you are.

:-)

I have heard it all before.
The old will die out and with them so will the Tory party

What you fail to grasp is that these old Tories when they die hand over pots of gold to the young socialists and once the gold to be taxes is their own they stop being so keen on distribution and swing right