State Housing – Moderating My Anger To Ask Is There Any Better Example of What Is Wrong With The Welfare State?

I’ve not kept up with National’s intentions for state housing: I’m finding tuning into the activities of government depressing and so am less inclined to do so, opting for nice stuff instead, like drinking wine. Although, of course, it is impossible, ultimately, to stick one’s head in the sand, because the state owns us, I know this when I look at our tax liability for the coming year that I’ve just calculated, on which Mrs H is furious, because it means the prudent curtailing of some of our plans; that is, a word increasingly unknown to the welfare state: restraint. Let me explain.

I realise that all current residents of state housing are to be assessed as to their fitting the requirements for state housing, and all the normal hubbaloo is sounding from those statists who have forgotten that a state house was never supposed to be for life: it was a step up, a temporary helping hand. So faint praise from me on this one. However, as with so much from this government, it appears to me there is a doublespeak involved. Just as Bill English’s constant references to spending constraints in reality mean not having to deal with what is really necessary, spending cuts, and hiding the fact that his every budget has increased the total government dollar spend, so do I see the lie of the state house occupier reassessment. The lie is in the fact the government is embarking on vastly increasing the stock of state houses: not just the number, but the size per house, to four and five bedroom houses; additional bedrooms being renovated onto existing state houses. Free men know that add bedrooms and build bigger state houses, then welfare will surely fill those bedrooms with babies, who in most cases I would hope have love – though certainly not guaranteed – but much less chances in life, than those born of love, affection, and prudence: welfare is doing what it does best – creating a permanent struggling underclass.

This insight into the doublespeak was gleaned by myself from a two minute clip on the TV 1 six o’clock news this last Thursday night, 16 May. It was discussing the need for bigger state houses, and the camera panned to the problem: a mum – a dad was not present or spoken of, but whether this was a solo mum, or not, is beside the point, which is unrestrained irresponsibility and stupidity – ... a mum, who to me looked younger than 20 years old, until the evidence of her five, yes five, children on the couch beside her, tucking into potato chips, led me to believe she must I guess/hope be in her mid-twenties; anyway, mum wasn’t so much explaining the need for a bigger state house due to the brood of five, but, sit tight – something mum should have done much more of – it wasn’t just the five children next to her, as she went onto say, rather the eight, EIGHT, children family she has, and an additional one on the way because mum was pregnant again. Apparently, despite she could not afford her own housing for the existing family of eight, she’d made the decision to have another. Honest; watch this nonsense, though make sure, first, you’ve nothing precious and breakable around you.

Although as bad as that is, and monumental stupidity on this scale is beyond my comprehension, it still was not the bit that really had me angry. On the arm of the chair mum was sitting on, was a Sky TV remote control. Now as regards that remote, here’s an interesting anecdote.

I had two clients last year post their Sky remotes back, because they couldn’t responsibly – big word that – afford their subscriptions. Both clients are self-employed, one in the trades, the other a rural contractor; one with two children, the other with one, and both pay tax; their problem being after paying tax they're struggling. These two families are paying tax so mum of eight – nine to be – can move to a bigger house with her Sky decoder, and she's the one on the telly complaining about her lot, that the politicians from all parties in our Parliament are pandering to.

There is nothing right about that. Nothing at all.

For myself, partly because I keep this site, and I’m rightly terrified of IRD, I prudently do my taxes conservatively, or as best I can with our mish mash mess of complicated tax law, hence Mrs H is not best pleased with our tax bills coming this year – (aside: I see the IRD tracking through my blog (see update 1) and so remind all officers to read my disclaimer at bottom, please, especially in this age when the IRD has broadened its reign of terror to advisors.) Although our problem is a little more complex than that: I’ve had about as much as I can take of social(alist) democracy – read funding mum of eight with ninth on the way - but have resigned myself to the fact this train we’re on to the state gulag is unstoppable, so I want to take more time out to look at the scenery on the way, and do my own ‘thang’. Thus, with only Mrs H and myself to look after any longer, and we can live pretty cheap - our biggest budget item is wine - I’ve been asking some of my bigger clients to leave so I can trade money for time - I've never been driven by money. The way our tax system works this means paying tax bills from higher income years, on smaller income, which is not a problem as we have it put aside, we plan, though is an inconvenience in that I have to look to estimating provisional tax. And within this context we have been spending just a tad too much, for reasons that are personal, and stuck with an earthquake damaged house in Christchurch not helpful, so, as I wrote at the start of this, we’re employing a little necessary restraint, so as not to have to use our long term savings.

And all that would be fine, or rather would have been, if it wasn’t for mum of eight – ninth coming - on Thursday night. Her complete seeming disregard for restraint is just rubbing my nose in how unjust this prison of state known as the welfare state, has become. I’ve said before, the problem is not welfare abuse: it’s welfare use which is, of course, the end of the free society, and the road to a cruel one. And a final note in passing, a personal one, if this is the caring society, then as one of those paying for it at the price of my privacy and right to be left alone, and mine and Mrs H's goals and aspirations, sorry, I ain’t feeling the love, and mum of eight – ninth coming – is feeling, and getting it far too much: has she heard of birth control? If the wine world hadn’t moved to screw tops, I could’ve sent her a cork.

Finally, just for those caring politicians who don’t understand our Western tradition of classical liberalism, no, the ANZAC’s didn’t die for this unrestrained, irresponsible, behaviour politicians use to bind the prudent to the yoke of them, either. Far from it - this is what war hero Charles Upham was fighting for.

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Um, unrelated addendum: I don’t want to depress the workers too much more, but in case you hadn’t noticed, the government money printing presses have been working incessantly, world-wide, to ensure the next economic collapse is much deeper and more thorough than the last one starting – and still going – since August, 2008. The markets are going to collapse again – why, because the fix for that financial crisis implemented by the state planners, was simply much more of what caused it: (just quietly, another reason to hunker down and take stock) … [Lights fade to maniacal laughter).

With that, Mrs H and I are entering the last couple of weeks of our break, with friends descending on us tomorrow and staying for a while, so posting may be intermittent until we get back to Geraldine.

Of Market Signals, Toilet Paper and Electronic Bidets. Power & Asset Sales.

Every policy being spoken up by New Zealand’s Left-centric parties make it necessary to repeat the point of this post over and over.

Leaving aside the fact that economics can never be separated from philosophy and politics - that planned economies can only be imposed on planned lives – the evidence of history, and of today, continues to show that centrally planned economies do not work, cannot work, and with a dreadful price exacted: human hardship.

Statists from both the Left and Right, though in every case regarding the Left, too often view the ‘free market’ as some type of cold, impersonal machine that rides cruelly over individuals, thus must be regulated by the caring hand of government. This could not be further from the truth. The market is, indeed, that most intensely personal thing: it’s you and me. It is as simple, but complex, as the expression of all the needs and desires of every individual in a market community searching for resolution, and the means by which those needs and desires are first matched, then priced and allocated as to the resources available. This wondrous social meeting place, based on the voluntary transaction, not the cold dictates of the machine of state, has increased the standard of living of all those communities that have embraced free markets, as well as bringing those communities the concomitant freedom that free markets exist on: there is no free market without freedom, and no freedom without a free market. It therefore follows, put the oafish fist of the central planner into that complex, living market place, that is, into the lives, hopes, and desires of individuals, at this crucial micro level, and despite it can take one hell of a shellacking, ultimately a market, and with it liberty, plus the community, will be destroyed.

Economist Donald Boudreaux explains the reason for failure behind central planning well:

… I deny that behavioral economics strengthens the case for government regulation.  Indeed, I believe that it weakens that case.  Because the regulators have the same psychological foibles as the regulatees – yet face far less direct feedback on their decisions than do those whom they regulate – turning more decision-making power over to government increases the frequency of human error and amplifies its ill-effects.  Markets keep those errors less numerous and their effects more confined.

Human beings are not laboratory rats to be controlled and conditioned by some elite of their number who, somehow and without explanation, manage to become higher-order creatures simply by working for government and professing deep concern for the welfare of their lab animals.

(Note again from this quotation the impossibility of separating economics from philosophy.) 

Regarding the topical issue of privatisation versus nationalisation and central planning of the power industry in New Zealand, how much more evidence of this do the Cunliffe’s, Shearer’s, Norman’s et al need?

A quick real-world refresher for them:

For an historical example, click through to this link to see the centrally planned poverty and food queues behind that first Iron Curtain before it went down: Poverty, prostitutes, and the long, slow death of the Soviet Union: haunting pictures show desperate struggle to survive in last days of the USSR.

And if still not convinced, to the present day, look at centrally planned Venezuela, where their politicians can’t even organise enough toilet paper:

Venezuelans are used to going without staples like milk, coffee and butter, thanks to the country’s frequent food shortages. But now they’re dealing with a much more urgent crisis: a lack of toilet paper.

Stores have run out, and each new delivery sees a rush on supermarkets. The demand is so great the government has now been forced to order 50 million rolls to appease desperate shoppers. One woman standing in line at a Caracas supermarket that received a fresh delivery told the Associated Press that she had been scouring the capital city’s shops for two weeks. “Even at my age, I’ve never seen this,” another, 70-year-old shopper told Sky News.

Economists blame Venezuela’s shortages partly on price controls, initiated by the late President Hugo Chavez, to make goods affordable to the poorest people in society (in a government store, a kilogram of pasta costs $0.30, writes the BBC). But that has also led to country-wide shortages of staple items, and Venezuela’s “scarcity index” is currently at 21% – meaning that out of 100 basic products, 21 aren’t available in stores, notes the BBC. “State-controlled prices—prices that are set below market-clearing price—always result in shortages,” said Steve Hanke, professor of economics at Johns Hopkins University, told the Associated Press. “The shortage problem will only get worse, as it did over the years in the Soviet Union.”

Say what you like, but as much as our Left politicians hate free markets - and thus an individual's freedom from the arrogant theocracy of themselves - in the market economy, with the feedback loop of market signals, you’ll always have toilet paper. The Left need to take off their ideological blinkers that keep them in this ignorance of emoting about issues rather than thinking on them.

For Labour and the Greens, who have promised if winning the 2014 election to force us all ever quicker into that sewage pit called socialism, starting with renationalising power, and placing it under central planning, please learn the lesson. And if you’re wondering on the link to toilet paper, specifically, well for purposes of hygiene the Hubbard household has wholly converted to electronic bidets – think of warm toilet seats at 4.00am on a wintry morning – and so sadly to employ a dreadful, because its grossness offends me, but necessary metaphor, centrally planned power can only eventually mean brown-outs.

Coming to this blog on Tuesday: State Housing – You’ve Just Got to Be Kidding … in which I introduce to the debate on state housing, the notion of the cork.

2013 New Zealand Budget: View from Behind the IRon Drape

Forgive me not getting excited about a budget that puts more money into the surveillance state, an extra $6.65 million to IRD audit year on year (** see update 1 below); provides for thin capitalisation rules to make it more expensive, thus less likely, for foreign investment doing business here; and a future tenuous government surplus – we’re still accruing debt in the meantime - based only on a tax take increasing at a higher rate than GDP growth.

Core tax revenue is forecast at $62.4 billion, or 27.4 percent of gross domestic product in 2014, rising to $72.8 billion, or 28.3 percent in 2017 as the economy grows. Growth in tax revenue is expected to strongly outpace forecast nominal GDP growth over the forecast horizon, with all tax types picked to rise, especially tax from employees, the Treasury estimates.

I put it to the Minister of Finance that GDP growth is being constrained by the increasing tax take. Imagine a country where the reverse would be true: a lower tax take allowing faster GDP growth, and so higher living standards for all of us. That would be a classical liberal country moving toward the freer society, rather than the road to the planned economy, based on tax slavery, that this budget promises, as with every Bill English budget that has talked up spending constraint, but never spending cuts, and has seen a higher government dollar spend still in each successive budget as the size of state grows under the political party standing for small government.

Mind you, looking at the opposition benches, it could be so much worse from 2014:

“@deloittenztax: What do we think of #NZBudget thin cap tax announcements? bit.ly/13n7JH1” trivial
— David Cunliffe (@DavidCunliffeMP) May 16, 2013

When Labour quite possibly take over the chains to our lives from 2014, yes, doing business in New Zealand won't look like an attractive option for foreign investment, and we'll all be the poorer for it. Plus David ought to be careful tweeting to Deloitte's like that: he's scaring the horses again.

Though in the meantime, only more statism to be seen here, move along please ...

Update 1:

Stop press: the surveillance state grew a whole lot more, by the looks of it, than is admitted in the announced $6.65 million figure …

Vote Revenue has got $54m more funding in 2014 for IR in part to chase debtors and do audits, much more than announced? #nzbudget ^GN
— PwC New Zealand (@PwC_NZ) May 16, 2013