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peter_2008

Wouldn't it be nice that we all die debt free but also penny less?

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OK, just some thoughts.

We can all indulge in the government conspiracy theories that they want to turn all of us to mortgage slaves etc etc. However, I wonder if the real reason is something equally ruthless, but somewhat less evil and less “conspiratorial”?

Someone dies debt free is a good thing, right? Of course, we all try to be debt free. And say if we leave human emotion and moral value aside, could one argue that someone dies debt free, but also penny-less – would be a perfect scenario? Because that person is, well, perfectly self sufficient. So, you spend your last penny the moment you die. Or you could say that the moment you drop dead, you managed to spend every last penny. It is not a bad thing, is it? Some may even say that you have beaten the "system".

Now, none of us can plan our whole life perfectly. We are in fear of running out of money, so we save, invest and buy properties. Yes, some would die having scrounged off benefits most of their life, but many of us inevitably over-save and would die having worked hard and leave a lot of money we never get to spend.

And, here is my theory. Rather than being inherently evil, the government simply do NOT like people over-saving, because it hinders economic growth, so it tax savings to force savers to spend, so if you are not going to spend, the government tax you and spend it for you, because while saving may be prudent on a individual level, collectively, you are bad bad bad for economy.

So, the real reason that the government incentivising people to borrow money through every possible measure (from HTB to Retirement equity release), is so that we smooth out our spending over our life time in a way that ideally we all die debt free and penniless. Wouldn't that be a perfect world?

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30 minutes ago, peter_2008 said:

And, here is my theory. Rather than being inherently evil, the government simply do NOT like people over-saving, because it hinders economic growth, so it tax savings to force savers to spend, so if you are not going to spend, the government tax you and spend it for you, because while saving may be prudent on a individual level, collectively, you are bad bad bad for economy.

So, the real reason that the government incentivising people to borrow money through every possible measure (from HTB to Retirement equity release), is so that we smooth out our spending over our life time in a way that ideally we all die debt free and penniless. Wouldn't that be a perfect world?

Banks lent our own tax bailout money back to us, 80% of which lent towards land and housing, therefore keeping its price high (and hasn’t been included in inflation measures for decades). Only 20% went to business.

If the above wasn’t the case the economic pie would be bigger for all, including for the HMRC, and you could save. Economic rent seeking always makes the pie smaller.

Edited by Arpeggio

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2 hours ago, Arpeggio said:

Banks lent our own tax bailout money back to us, 80% of which lent towards land and housing, therefore keeping its price high (and hasn’t been included in inflation measures for decades). Only 20% went to business.

If the above wasn’t the case the economic pie would be bigger for all, including for the HMRC, and you could save. Economic rent seeking always makes the pie smaller.

TPTB don't care about the size of the pie...they care only that their favoured groups take a large slice...

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2 hours ago, Wayward said:

TPTB don't care about the size of the pie...they care only that their favoured groups take a large slice...

Sad but true. One thing in my view that could prevent this is competition, internationally or within a country. A rentier based sham economy is an open goal for competitors. Want to start a business? Don’t set up in a feudal economy. Want to attract business and have an economy? Don’t get feudal. One reason I’m sceptical of globalism, Blair et al.

 

Edited by Arpeggio

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6 hours ago, peter_2008 said:

Or you could say that the moment you drop dead, you managed to spend every last penny. It is not a bad thing, is it? Some may even say that you have beaten the "system".

No, the primary economic unit is the family, not the individual. People work and save so their children can have a better life.

6 hours ago, peter_2008 said:

Rather than being inherently evil, the government simply do NOT like people over-saving, because it hinders economic growth

Paradox of thrift, but it isn't a paradox at all. Money saved is not simply gone from the economy. It is likely invested into the economy via the financial system. People save to spend their money later on in life. The money will be spent eventually, and when it is, it will be worth more.

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20 hours ago, peter_2008 said:

while saving may be prudent on a individual level, collectively, you are bad bad bad for economy.

A child's understanding of economics.

Economies are built on excess production and deferral of gratification, which is another way of saying "saving".

When you destroy people's ability to save, you are directly destroying the economy and there is no way around that.

20 hours ago, peter_2008 said:

Rather than being inherently evil, the government

The definition of a government necessarily includes "initiates or threatens to initiate violence against peaceful parties". 

Government is fundamentally evil in even the smallest facet of every action it takes.

Edited by Locke

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55 minutes ago, Locke said:

The definition of a government necessarily includes "initiates or threatens to initiate violence against peaceful parties". 

Government is fundamentally evil in even the smallest facet of every action it takes.

No govt has ever threatened me. 


 

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22 hours ago, peter_2008 said:

OK, just some thoughts.

We can all indulge in the government conspiracy theories that they want to turn all of us to mortgage slaves etc etc. However, I wonder if the real reason is something equally ruthless, but somewhat less evil and less “conspiratorial”?

Someone dies debt free is a good thing, right? Of course, we all try to be debt free. And say if we leave human emotion and moral value aside, could one argue that someone dies debt free, but also penny-less – would be a perfect scenario? Because that person is, well, perfectly self sufficient. So, you spend your last penny the moment you die. Or you could say that the moment you drop dead, you managed to spend every last penny. It is not a bad thing, is it? Some may even say that you have beaten the "system".

Now, none of us can plan our whole life perfectly. We are in fear of running out of money, so we save, invest and buy properties. Yes, some would die having scrounged off benefits most of their life, but many of us inevitably over-save and would die having worked hard and leave a lot of money we never get to spend.

And, here is my theory. Rather than being inherently evil, the government simply do NOT like people over-saving, because it hinders economic growth, so it tax savings to force savers to spend, so if you are not going to spend, the government tax you and spend it for you, because while saving may be prudent on a individual level, collectively, you are bad bad bad for economy.

So, the real reason that the government incentivising people to borrow money through every possible measure (from HTB to Retirement equity release), is so that we smooth out our spending over our life time in a way that ideally we all die debt free and penniless. Wouldn't that be a perfect world?

Maybe not.

I cannot find it now but last week i read an article about a study that looked at what it took to be regarded as a good person across the world and through history.

It found that it included seven qualities common to every human culture and one of those was passing down wealth to your children.

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14 minutes ago, Confusion of VIs said:

Maybe not.

I cannot find it now but last week i read an article about a study that looked at what it took to be regarded as a good person across the world and through history.

It found that it included seven qualities common to every human culture and one of those was passing down wealth to your children.

Um. I'm going to do that before I die.

Also, helping them to accumulate persistently valuable skills, knowledge & financial strength, including raising their kids in turn with that philosophy, beats leaving them a windfall in their 60s hands down.

NB only 25% of mrs xux & my wealth in property. And that's let while we rent something smaller, so we are not exactly typical.  But I still feel equipping your kids rather than enriching in late middle age them is the way to go.

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22 hours ago, peter_2008 said:

Someone dies debt free is a good thing, right? Of course, we all try to be debt free. And say if we leave human emotion and moral value aside, could one argue that someone dies debt free, but also penny-less – would be a perfect scenario? Because that person is, well, perfectly self sufficient. So, you spend your last penny the moment you die. Or you could say that the moment you drop dead, you managed to spend every last penny. It is not a bad thing, is it? Some may even say that you have beaten the "system".

If you have kids, you want money left over to leave to them.

If you don't, arguably you want to die with as big a debt as possible - after all, then you've enjoyed the money during your life and never have to pay it back.

At an individual level, spending your last pound the day you die, leaving you at exactly zero, is not only impossible for all but a few assisted dying cases to achieve, but is also unlikely to be the optimum outcome for any individual. 

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22 minutes ago, scottbeard said:

If you have kids, you want money left over to leave to them.

If you don't, arguably you want to die with as big a debt as possible - after all, then you've enjoyed the money during your life and never have to pay it back.

At an individual level, spending your last pound the day you die, leaving you at exactly zero, is not only impossible for all but a few assisted dying cases to achieve, but is also unlikely to be the optimum outcome for any individual. 

What's optimum for an individual is often not optimum for society, and the impacts on society eventually come around to affecting the individual.

Piling on the debt then dying isn't a model that can ever work for more than a few individuals, if the lenders lose out from too many such people they stop lending (whether or not the overall picture is good or not). Really it's an argument for doing what you damn well please knowing you'll be dead before the consequences catch up with you, which will overall make lives worse.

--

On the "saving is money lost to the economy" point I agree with an earlier poster. It still gets spent at some point. From the individual perspective as long as you're prepared to wait and will have to pay the money back at some point you'll get more if you don't borrow, not having to pay the interest (borrowing to invest is a different game), and if you're doing that the lenders aren't getting a cut of every transaction.

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1 hour ago, happyguy said:

No govt has ever threatened me. 


 

If you don't pay taxes you will go to jail, resist and they will kill you.

Yes, you are threatened.

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2 minutes ago, Riedquat said:

Piling on the debt then dying isn't a model that can ever work for more than a few individuals, if the lenders lose out from too many such people they stop lending (whether or not the overall picture is good or not). Really it's an argument for doing what you damn well please knowing you'll be dead before the consequences catch up with you, which will overall make lives worse.

Yes absolutely it's not best for society for people to build up debt and then die without paying it back.

What I taking issue with was peter_2008's comment that you've "beaten the system" if your net worth is zero.

My point was simply that you've "beaten the system" if you net worth is positive (if you have kids) and negative (if you don't).

For society as a whole yes we don't want people to build up debt and then die without paying it back - but that's why "the system" doesn't want you to do that (eg lenders are incentivized not to lend to you if you unlikely to live long enough to pay it back, as it's not in their financial interest to do that, never mind society).

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2 minutes ago, Uncle_Kenny said:

If you don't pay taxes you will go to jail, resist and they will kill you.

Yes, you are threatened.

I'm pretty sure there's not a policy of killing people who resist unless that resistance threatens the lives of others.

In any case by those standards anything short of anarchy counts as threats. You may as well say you're threatened because of what might happen if you try to take food off someone else.

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2 hours ago, happyguy said:

No govt has ever threatened me. 


 

As @Uncle_Kennysays you are threatened all the time recent threats:

Change your software otherwise we won't take your numbers for company tax - nothing to do with actually paying the tax

Take your children out of school and we will fine and ask to see your plane tickets

I don't like your vehicle bought in good faith so from April if you use in London we will charge you more

I will sneak in a probate fee so doesn't look like a tax but is  thousands of pounds

The majority of threats are fiscal obviously because all a government wants is your money but always backed up with violence if appropriate 

Bailiffs, Police or Army

 

 

 

 

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14 minutes ago, Riedquat said:

I'm pretty sure there's not a policy of killing people who resist unless that resistance threatens the lives of others.

In any case by those standards anything short of anarchy counts as threats. You may as well say you're threatened because of what might happen if you try to take food off someone else.

Your observations are correct, but so were those of Uncle Kenny. There is an implicit threat of violence. It's unlikely to take the form of killing those who don't pay. But property could be expropriated and you could be sent to prison if you don't pay tax.

Any system aside from anarchy does require such an implicit threat. It's not clear that order could be maintained without some such threats, so it's likely a necessary evil.

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25 minutes ago, Kosmin said:

Any system aside from anarchy does require such an implicit threat. It's not clear that order could be maintained without some such threats, so it's likely a necessary evil.

Even anarchy, because you'll be constantly under threat from those prepared to let others do the necessary work to stay alive and just take it off them. In fact anarchy is an impossible state, at least when you've got more than a very small number of people who rarely come in to contact with each other and need to spend most of their time looking after themselves. As soon as you start becoming organised you've inevitably got a few rules, whether in the form of some sort of government or just a group banding together. And there's no point in having rules unless you're ultimately prepared to use force to enforce them. The best you can hope for is an evolved enough society that it's usually capable of resolving issues before it reaches that point, but people being people it's inevitable sooner or later.

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20 minutes ago, Riedquat said:

Even anarchy, because you'll be constantly under threat from those prepared to let others do the necessary work to stay alive and just take it off them. In fact anarchy is an impossible state, at least when you've got more than a very small number of people who rarely come in to contact with each other and need to spend most of their time looking after themselves. As soon as you start becoming organised you've inevitably got a few rules, whether in the form of some sort of government or just a group banding together. And there's no point in having rules unless you're ultimately prepared to use force to enforce them. The best you can hope for is an evolved enough society that it's usually capable of resolving issues before it reaches that point, but people being people it's inevitable sooner or later.

I'm not sure it's correct to say anarchy is impossible. I think your argument should be it's not sustainable (a society could exist without the threat of force from a state, but only as long as people maintained order, which probably wouldn't be long).

It's also worth noting the conception of anarcho-capitalism (also called market anarchism, private law society, individualist anarchy and probably other things which I've forgotten). Under this system there is no state to coerce people. Instead people submit to arbitration and abide by the laws of the property owner. So you can do as you wish on your property. I can do as I wish on mine. Implicitly or explicitly when we go anywhere we consent to submitting to arbitration if we are accused of any crime and are reassured that if someone commits a crime against us, the criminal will do the same. Any institution which doesn't do this will be considered disreputable, so everyone has an incentive to support a system of private arbitration.

I think Robert Nozick argued that if such a system worked it would basically amount to a state. David Friedman and Murray Rothbard are noticeable dissenters.

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18 hours ago, Uncle_Kenny said:

No, the primary economic unit is the family, not the individual. People work and save so their children can have a better life.

What do people without children do?

2 hours ago, scottbeard said:

If you have kids, you want money left over to leave to them.

I think most do, but it depends on age and circumstance. If your children are already affluent, and especially if they are more affluent than you, would you still think it was important to leave them money? Do you think it matters to the parents of Jeff Bezos and Bill Gates whether they leave anything to them? Where children are richer than their parents, I think wealth transfer to the parents make more sense.

There is also perhaps an increasing trend for people to make big transfers during their lifetime (house deposit, funding university, etc.)

 

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For clarification, I am not saying that my theory is right. It is flawed.

The hypothesis that I am suggesting is that rather than the government having a hidden evil plan to inflate house price per se (as many here seem to believe); the way the government behave is because of their belief that it is collectively good that people should spend all their money before they die. And all ill conceived ideas are a reflection of that belief, e.g. raiding your pensions, use you house as collateral for your old age care and medical bills, inheritance tax etc etc. The more they make you spend on yourself, the less the government need to spend on you. And it is all for the greater good.

The government have always denied having any policy that specifically targets house price, and maybe in the mind of the government, they genuinely do not have such policy. In which case they may simply see high house price as a consequence of such behaviour, not the intent.

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1 hour ago, Kosmin said:

Your observations are correct, but so were those of Uncle Kenny. There is an implicit threat of violence. It's unlikely to take the form of killing those who don't pay. But property could be expropriated and you could be sent to prison if you don't pay tax.

Any system aside from anarchy does require such an implicit threat. It's not clear that order could be maintained without some such threats, so it's likely a necessary evil.

The current taxation system is overly aggressive, especially for those forced to pay taxes from income.

A much fairer tax system would be based on compensating others for the resources you consume or damage done to environment. So if you want to live in prime central London you will pay high taxes, or you want to burn excess fossil fuels there would be a high cost. Taxing wages is slavery.

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31 minutes ago, Kosmin said:

I'm not sure it's correct to say anarchy is impossible. I think your argument should be it's not sustainable (a society could exist without the threat of force from a state, but only as long as people maintained order, which probably wouldn't be long).

People maintaining order makes it a state, or at least something that lies on the same scale. Whatever the labels you use and the scales you consider you've got people deciding what organisation is needed, and how to deal with other people who are unwilling to go along with it.

Quote

It's also worth noting the conception of anarcho-capitalism (also called market anarchism, private law society, individualist anarchy and probably other things which I've forgotten). Under this system there is no state to coerce people. Instead people submit to arbitration and abide by the laws of the property owner. So you can do as you wish on your property. I can do as I wish on mine. Implicitly or explicitly when we go anywhere we consent to submitting to arbitration if we are accused of any crime and are reassured that if someone commits a crime against us, the criminal will do the same. Any institution which doesn't do this will be considered disreputable, so everyone has an incentive to support a system of private arbitration.

What happens when people disagree with the result of the arbitration? How do you stop people barging in to that private property and help themselves to whatever you've got there? (that's before we get into the flawed concept that it's fine to do what you want on your own property - it can still affect others). Your system still requires a significant enough group agreeing to some common rules, even if they're less than most states, and being prepared to enforce them, which is why I think that a no-state system is impossible unless people hardly ever interact with each other.

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4 minutes ago, doomed said:

The current taxation system is overly aggressive, especially for those forced to pay taxes from income.

A much fairer tax system would be based on compensating others for the resources you consume or damage done to environment. So if you want to live in prime central London you will pay high taxes, or you want to burn excess fossil fuels there would be a high cost. Taxing wages is slavery.

Who's to say what's excess and what's damaging? There are no non-subjective criteria. You mention fossil fuels but to some people plastering the country in wind turbines is pretty atrocious too. Others couldn't give a crap. It all boils down to individual values - you may be able to say for definite what effects will happen as a result of a particular action but positive or negative, which are which and which win, that's down to individual values.

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19 minutes ago, Kosmin said:

Do you think it matters to the parents of Jeff Bezos and Bill Gates whether they leave anything to them? Where children are richer than their parents, I think wealth transfer to the parents make more sense.

There is also perhaps an increasing trend for people to make big transfers during their lifetime (house deposit, funding university, etc

People of that incredible wealth are a rarity even now. 

There is certainly a trend of parents paying for education, house deposits etc if they are able to do so 

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