Kommentarer til: Hvad vil du gi' for en efterløn? II

Af: David G.

David G. — Sun, 23 Apr 2006 09:41:33 +0000

Og Poul, tak for påmindelsen. Jeg er hyppig gæst her for tiden og blogging er et flygtigt medie. Eller også er jeg bare ved at blive senil.

Af: David G.

David G. — Sun, 23 Apr 2006 09:40:17 +0000

You can prove anything with statistics, even that Danes (on average) are richer than Americans (on average). However, even taking the $45K-$39K gap at face (nominal) value, we are forgetting not just PPP (most things, esp. consumer goods and services, are much cheaper in the US), we are forgetting the most important difference which is the tax burden. As CEPOS has shown, Danes are poorer than even other Europeans after tax.Latest figures show that the number of US taxpayers with net worths (apart from equity in their residences) of over $500K is now about 25 million. If you add the likely number of dependents to that figure, you get a number of Americans living in remarkable affluence of somewhere between 75-100 million. That’s a third of the population. Do a third of Danes live in households with net worths (other than equity) of more than 3m DKK (or 4.215m if you assume the PPP rate, which still doesn’t take account of taxation, of 1 USD = 8.43 DKK)? I’d like to know, but somehow I don’t think so.Many Danes, of course, think they get some value in return for their taxes. This mysterious superstition, daily contradicted by evidence of dirty hospitals, waiting lists, low life expectancy, bad schools, rickety trains that don’t run, etc. etc., is the biggest barrier to serious reform in this country.American life expectancy is now 77 for males and 80 for women. That includes all the dysfunctional addicts, overweights and others. People with reasonable genetic endowments and reasonable behavior obviously live even longer. Now in Denmark we hear that those with reasonable g.e. and behavior live about as long as ALL Americans. For this, Danes pay the world’s highest income and indirect taxes. Nobody would take such a deal in private life; why do they take it from the government?This is a far cry from the CEPOS-Catinet study, but my point is that people really do not seem to have much notion of the vast sums they are forking out for little benefit and much cost. They apply far more rigorous analysis to choices over which they have power, such as buying goods or houses. It is a good thing to begin to open their eyes to the tradeoffs inherent in paying taxes for assumed benefits which may not be worth it.

Af: Cosmic Duck

Cosmic Duck — Sun, 23 Apr 2006 06:56:38 +0000

Martin M.You claim that surveys show that most of those who start the “Efterløn” are perfectly healthy. That may be correct. I do not know what survey you are referring to. You try to give your arguments weight by referring to investigations that is presumed known. What you’re actually doing is promoting a political agenda, and then you try to find the most appropriate arguments to support it. That is common tactics. When you ask those who get the “Efterløn” you generally get other kinds of answers. You see pictures in the media of the golf club swinging “Efterlønner”, but when you ask the union of public employees, FOA, or the 3F union they can corroborate the fact that a lot of these people need some kind of pre-retirement.One of the questionable aspects of the before mentioned political agenda is that it is heavily influenced by the business cycle. We should not let our day-to-day political agenda for the welfare society be determined by ups and downs in the level of unemployment. When the rate of unemployment is low, we want the seniors to be at the disposition of “hungry” employers, when it is high, they have to give room in the labour market to the young unemployed. That is not a decent way of treating citizens in a rather rich country like the Danish one. The welfare society is a set-up for the long run economic perspective. I’m well aware of Lord Keynes’ famous remark that “in the long run we’re all dead”. It was, I think, applied to another case.

Af: Poul Højlund

Poul Højlund — Sun, 23 Apr 2006 06:05:53 +0000

Der synes at savnes lidt harcore viden om efterløn blandt debatdeltagerene.Se eventuelt min kronik "Den amoralske efterløn" i JP fra februar sidste år, hvor jeg prøver at gennemhulle noget af den almindelige uvidenhed / agitprop om fænomenet.http://www.jp.dk/arkiv:aid=2907656

Af: US

US — Sun, 23 Apr 2006 03:11:49 +0000

If all or at the very least a large fraction of the people who receives “efterløn” do it because they’re unhealthy, it sure is a terrible development we’re experiencing at the moment.Since 1994, the number of people who have not yet reached the normal retirement age and who are in such a bad state that they can no longer work, has almost doubled – going from 111.098 in 1994 to 187.247 in 2004. Why do the politicians not adress this problem? Why do they instead keep telling the firms that they should hire some more people in this age group, even though most of these people are clearly too ill to work at all?And why have we experienced this rapid development when at the same time, the amount of fysically demanding blue-collar jobs have been decreasing by the hour?

Af: Cosmic Duck

Cosmic Duck — Sun, 23 Apr 2006 01:03:00 +0000

I’ve written more extensively about the neoliberal model and the European social model on my blog . There is also a link to the comparative tax investigation mentioned in the post.

Af: Cosmic Duck

Cosmic Duck — Sat, 22 Apr 2006 23:40:04 +0000

David G.You cannot take equity values as a proof of the wealth produced in an economy. America is living above its means. Due to artificially low interest rates house prices have shot up and provided many American households with equity that makes it possible for them to up other kinds of assets for instance by investing in the stock market. Furthermore, they finance overconsumption through loans. The effects can be seen in the balance of payments position (in the red at 6 per cent of GNP or some 7-800 bn $). If youll compare with Denmark, look at incomes, – and income distribution. Theres no doubt that the US has a serious poverty problem. You could for in stance read in the Boston Globe after the Katrina disaster: When ordering people to leave New Orleans while Hurricane Katrina lurked in the Gulf of Mexico, state and federal authorities apparently failed to consider that 27.9 percent of the city was below the poverty line and therefore unlikely to have transportation (The Boston Globe). The official poverty line is about 20.000 $ for a four-member household. Quote: On August 30, 2005, the U.S. Census Bureau published its poverty report for 2004. The official poverty rate rose from 12.5% in 2003 to 12.7% in 2004. This puts the number of people officially living in poverty in the U.S. at 37 million. For a family of 4 persons the threshold was listed as $19,307 (Census Bureau). That is considerably lower than a corresponding Danish family. In the US a lot of workers make no more than the minimum pay, which at the national level is very low, much lower than in Denmark. Quote: Workers who are covered by the FLSA are entitled to a minimum wage of not less than $5.15 an hour (US, Department of Labor). In the other end of the income scale incomes are very high. Quote: The average CEO of a Standard & Poor’s 500 company made $11.75 million in total compensation in 2005 (Paywatch.org). Income disparities have been widening as a consequence of the neoliberal economic order. Of course, for a comparison, what is interesting is to look at average pay, and what you can get for that pay. According to most surveys, the average American wage earner/salaried employee made about 17 $ an hour in the beginning of 2005. Here it is noteworthy that taking inflation into consideration, average pay has barely budged since the beginning of the 1980s. The neoliberal model has led to sharpening competition in the labour market and outsourcing to low-income countries. And average wage earners are the losers in the income race compared to high income earners. And how much or rather how little do they get for the average income? Quote: Meanwhile, those who secure the middle-class jobs of the 21st century will have to make $17 an hour stretch further than ever as they pay more for health care or risk doing without insurance and assume much or all of the burden for their retirement. Meanwhile, those who secure the middle-class jobs of the 21st century will have to make $17 an hour stretch further than ever as they pay more for health care or risk doing without insurance and assume much or all of the burden for their retirement (Washington Post 31st of December 2004). You talk about taxes in Denmark being so high. Youre right when you look at taxation on high income earners. When you look at middle or low income earners, Denmark is not the country with the highest tax burden. In a publication from the Danish ministry of Taxation, Skattetryk en international Sammenligning, 2005, it is shown how several countries tax low and middle income earners more than Denmark does. The US is lower in this comparison than most EU countries, but for instance taking families with or without dependent children, the US is not so much lower that it compensates for the lower earnings plus the higher living costs to health care and other insurances.

Af: Martin M

Martin M — Sat, 22 Apr 2006 06:31:03 +0000

@Cosmic Duck:Surveys show that nine out of ten who start the “efterløn” are perfectly healthy and not worn out. I have even been told once that it is a requirement to be healthy, although I am unable to corroborate this.

Af: Cosmic Duck

Cosmic Duck — Fri, 21 Apr 2006 10:15:02 +0000

JR.You’re right. That kind of subsidizing is not healthy economics. I would however rather regard the “Efterløn” as a consumption item. The Danes have an option for consuming more leisure time. This option must be distributed more equally in the population than would have been the case, if it had been left to market forces alone.

Af: Cosmic Duck

Cosmic Duck — Fri, 21 Apr 2006 10:01:41 +0000

Martin Rannje.If you take the worldbank’s latest figures for 2004, the US GDP is 11667 bn $. The Danish one 243 bn $. Divided by population, 295 and 5,4 mio. respectively, you get a GDP per capita of US: 39.549, Denmark: 45.000. The Danish lead has increased since 2004 due to currency rate changes. You’re right with regard to PPP. There the American figure is higher. I’m a bit sceptical of PPP comparisons. There’s a bit too much economic witchcraft gone into calculating the baskets they are based on. All in all, however, the Danish wealth is based on much sounder economic data with regard to balance of payments, state budget, less wasteful consumption in the private sector, etc.

Af: Martin Rannje

Martin Rannje — Fri, 21 Apr 2006 07:24:30 +0000

@Duck:”If you take the worldbank’s latest figures for 2004, the US GDP is 11667 bn $. The Danish one 243 bn $. Divided by population, 295 and 5,4 mio. respectively, you get a GDP per capita of US: 39.549, Denmark: 45.000. The Danish lead has increased since 2004 due to currency rate changes.”Yes, but measuring in exchange rates makes even less sense than comparing PPP adjusted figures – because they do not say anything about what the individual consumers can actually buy. And when it comes to real growth rates, the gap between Denmark and the US has expanded, not decreased. (and this is much more true for the comparison between the abysmal growth rates of continental Europe vs. the U.S.) The only problem about the U.S economy is their disastrous situation with regard to the balance of payment.

Af: Cosmic Duck

Cosmic Duck — Fri, 21 Apr 2006 00:12:25 +0000

Martin Rannje.It is a question if the American figures are not inflated artificially by the inflated budget and military expenses. Unlike all other countries the US possess the only wholly accepted international currency. That means they can play “central banker of the world”. They can so to speak print money to cover the big foreign accounts deficit. That also means that the country can inflate the state budgets. In that way the country’s GNP is artificially “pumped up”, and thus their GNP figures are artificially high. The “eurosclerotic” France and Germany do not follow such Micawber policies. In many ways their economies’ structural balances are much sounder. And if you take the currency corrections into consideration they probably end up with GDP per capita figures not much under the American figures.

Af: US

US — Thu, 20 Apr 2006 10:45:01 +0000

…After having read the paper more carefully, I see that the bias problem mentioned above is at least partly adressed (however, I still think PKK grossly underestimates its influence).

Af: Cosmic Duck

Cosmic Duck — Thu, 20 Apr 2006 10:37:39 +0000

“Spørgsmål: Man kan i dag gå på efterløn når man fylder 60 år, hvis man bl.a. opfylder betingelserne. I Velfærdskommissionens rapport anbefaler man en gradvis afvikling af efterlønnen. Mener du at ef-terlønsordningen skal bibeholdes, reduceres eller gradvis afvikles?Kilde: Catinét, December 2005″To ask in this way is manipulative. The respondent is told what the welfare commission report recommends. This would be very “authoritative” to most respondents. In spite of that 47,5 per cent want to keep the efterløn. The Catinet poll is a more convincing validation of Goul Andersen’s research results than of CEPOS’. The fact that the US spends so much more on health than Denmark is not necessarily proof that American health care is better for broad categories of the population. It may be so for the select few, i.e. those who have a good health insurance. Otherwise the high expenses may reflect bloated budgets, budgets that are bloated because of high doctors’ earnings and high insurance and lawyers’ costs.

Af: US

US — Thu, 20 Apr 2006 10:10:29 +0000

Duck: I would like to add to JR’s remark about the validity of the survey that if anything, the CEPOS survey underestimates the true willingness to pay, due to an obvious bias among quite a few of the respondents (unless of course they have foreseen this issue and tried to solve it – PKK?).The whole point of the efterløn is that some people gain, and some other people pay. If you ask the people who gain (or expects to gain later on) what they are willing to pay in order to keep the efterløn, they have a rather obvious incentive to exaggerate their willingness to pay. They know that the higher the average willingness to pay, the less likely it is that the politicians decide to reform anything. The higher the willingness to pay, the more (government) money should be invested in the efterløn – that is, if the politicians care about oppinion polls.And since the respondents expecting/wanting to receive efterløn are not paying anything in the first place (the part that they finance themselves have nothing to do with this issue), there’s no risk involved for them in exaggerating their wtp.None of those who don’t want to receive efterløn are biased in any similar way – there are no free riding effects that could make their stated preferences untrustworthy.

Af: JR

JR — Thu, 20 Apr 2006 10:09:37 +0000

“…a more balanced question would include the amount of money you receive in early retirement benefits. My point being; we should demand the same amount of rigour from ourselves that we require from others.”Point taken.

Af: Søren P

Søren P — Thu, 20 Apr 2006 09:51:01 +0000

“And you must understand that the most objective way to pose a question is like it was done in the CEPOS survey where both costs and benefits are considered.”The question posed by CEPOS was; “Early retirement is financed partly by taxes. How much would you then be willing to pay in extra taxes in order to keep early retirement benefits at the present level?” (It was – surprise! – posed in Danish so its my translation of the question)The possible answers are money amounts. My claim – and i’ve made it before – is that the way the question is posed includes an asymmetry and that a more balanced question would include the amount of money you receive in early retirement benefits. My point being; we should demand the same amount of rigour from ourselves that we require from others.

Af: JR

JR — Thu, 20 Apr 2006 09:21:55 +0000

The Duck: “The net payment to them is not that big. And people go on Efterløn when they are exhausted and incapable of work – at the intensity level of the Danish labour market.”But they are not contributing taxes any more. And the last five years of your work life is normally some of the best paid years.I don’t buy your argument that it is mainly exhausted people who are incapable of working that go on “efterløn”. But let us for arguments sake say you are right.This effectively means that the remainder of the tax paying population is subsidizing sectors that are hurting the health of their employees and thus increasing the number of people employed in these sectors. Do we really want to reward that?

Af: JR

JR — Thu, 20 Apr 2006 09:19:17 +0000

“Opinion polls may be manipulated in any way the designers of the questionaires like. I’m quite confident that when CEPOS makes a survey it’ll give an entirely different result than when others make it.”And you must understand that the most objective way to pose a question is like it was done in the CEPOS survey where both costs and benefits are considered.”It is not correct when you say that the free market free consumers will yield the best results when it comes to financing welfare. You’re probably aware of the fact that in the US they spend 14-15 per cent of their GNP on health.”And you are probably aware that the public spending on health are approximately equal for Denmark and the United States ($2,352 and $2,368, 2002 figures from WHO). The private spending on the other hand are quite different ($231 and $2,906).So is your point that the public health sector in the USA is so poorly managed that it requires Americans to spend approximately the same amount of money in the private health sector?My guess is that Americans are simply getting better health care than Danes although better might just mean single rooms or whatever the Americans are choosing to use their money on.And the large number of rich Americans will of course be willing to privately spend a large amount of money on expensive treatment which will drive up the costs while not affecting the average life span proportionally. That is simply what they consider the optimal way for them to spend money.”General Motors is on the verge of bankruptcy due to the high costs of employer financed welfare (health and pension costs).”And in spite of that American companies support a gross domestic product (GDP) which is approx. 25% higher than the Danish GDP.”You may cut down on the Danish efterløn because you and your kind prefer to drive a BMW instead of contributing to the shared costs of running a society.”Your example with the American health care underscores that private spending is also used in “soft” areas like the health care sector. Why should early retirement of perfectly able men and women be considered “shared costs of running a society”?”The expenses paid out of private pockets may turn out to be bigger in the end.”Yes, if history has taught us one thing it is that the government produces stuff more effectively than the private sector? (hope you sense the irony;-)

Af: Martin Rannje

Martin Rannje — Thu, 20 Apr 2006 08:21:44 +0000

It is true that Americans spend more in total on health care, partly due to high transaction costs on the free market. (well, and high ex-post transaction costs in the public market one might add) But the following is a myth that is dubious at best:”That is probably one of the reasons why Danes are richer than Americans.”In my opinion the “fact” that Danes are richer than American is a contrivance of the left wing, which has been propagated through practically government institutions for so long that it has sedimented into a taken-as-given truth. When you take your time to peruse the actual figures of comparative incomes across nations, you will find that Americans on average are significantly more well-off than Danes. Incomes, as PPP adjusted, are hard to measure (partly because of the incommensurability of market baskets) – but I don’t really see any reason why Americans, even with their highly economically unequal society, should be less rich than Danes. On the contrary I feel reason to doubt the oppossite – and I think it is preposterous that this myth is readily being mediated through the public media and our educational system as a “fact”, when in “fact” it is not.Sincerely,