From: riaedwards@halls1.cc.monash.edu.au (AUDREY EDWARDS)
Subject: Re: Currency problems
Organization: Monash University, Melb., Australia.
Date: Mon, 12 Oct 1992 04:16:54 GMT

In article <riaedwards.1.718858988@halls1.cc.monash.edu.au> riaedwards@halls1.cc.monash.edu.au (AUDREY EDWARDS) writes:
>From: riaedwards@halls1.cc.monash.edu.au (AUDREY EDWARDS)
>Subject: Re: Currency problems
>Date: Mon, 12 Oct 1992 03:03:08 GMT

>In article <26691@castle.ed.ac.uk> fofp@castle.ed.ac.uk (M Holmes) writes:
>>From: fofp@castle.ed.ac.uk (M Holmes)
>>Subject: Re: Currency problems
>>Date: 8 Oct 92 15:50:25 GMT

>>riaedwards@halls1.cc.monash.edu.au (AUDREY EDWARDS) writes:

>>>Seriously, at what stage does the 'free market' (with its benefits and 
>>>pitfalls) end, and the state commence basic protection of those it considers 
>>>in need?

>>Well, if you want to believe some current advocates of the welfare state
>>then anyone earning less than average income is by definition "poor".
>>This kind of thinking leads to the prevalent nonsense of collecting
>>taxes to redistribute to such obviously poor people as:

>>1) Home owners. (Mortgage Interest Relief)

>>2) Married couples. (I guess it's just intuitive that single living is
>>cheaper than joint living).

>>3) Every child in the country (since we apparently hand out child
>>benefit whatever the earnings of the parents).

>>and god alone knows what other nonsense.


>>The result is that production, trade, and employment are taxed to
>>subsidise folks who could manage well enough on their own. The result is
>>that a few folks do better than otherwise at the cost of more
>>unemployment, a slower economy, and less production.

>>Now that it's becoming painfully obvious that government spending is way
>>too high (estimate for borrowing next year: 50 billion, or if you prefer,
>>around 25% of the government tax-grab) it's got to be time to look
>>carefully at the welfare state. Surely most people would agree that it'd
>>be better to live wiythin our means and start targetting the tax money
>>at those folks who are, beyond the doubt of almost anyone, actually
>>poor. 

>>If it can be done in Sweden, then it can surely be done in the uk.
>>There's no doubt that some folks will be screaming, but we'd all be
>>better off with an economy that generates wealth than with one that
>>leaves us to rely on borrowing.

>>>Audrey.

>>FoFP

>Apart from winging on about inappropriate benefits, you have not 
>answered my question (re. where does the 'free market' end?). 

>The great difficulty with the welfare state only providing assistance to "
>those folks who are, beyond the doubt of everyone, actually poor" is that if 
>one tried to do a survey of who people think this type actually is there 
>would be remarkably little concensus. Just to give you two examples - 

>1) Should the state provide assistance to substance abusers? The antis say 
>that it is the abusers' own faults, that it's maintaining their addition, 
>and that it does not encourage them to change. The pros say it is an illness 
>like the socially acceptable (like lung cancer) ones; it helps keep them out 
>of crime (thus reducing costs of imprisonment); and it can keep families 
>together (again reducing potential costs to state).

>2) More contraversially, mortgage interest relief (a subject I know 
>something of, as a solicitor acting for building societies in the UK). 
>MIR at present is paid on interest only after 6 months of claiming 
>benefits. At that stage, it is likely arrears have built up to sufficient 
>levels to justify an application by the mortgage lender for repossession (
>the courts have discretion only to delay it for a short period). BS's are 
>at present content to accept the interest payment only, as there is no 
>market for the repossessed houses, and it is looked on favourably by the 
>government. If MIR was abolished, then considerably more repossessions 
>would occur ( the BS's own view based on the statistic that at present it is 
>calculated that over 10% of mortgages are in significant arrears due mostly 
>to redundancy, the drop in house values preventing sale, and the break-up of 
>families.) As there is little council housing left, and very little 
>private renting (especially for families) there is the very real possibility 
>that the abolition of MIR would lead to an great increase in homelessness 
>and the consequent social problems. So perhaps MIR is a very cost effective 
>insurance!

>The point I'm making is that few people  (if any) are sufficiently 
>educated as to whom the recipients of benefit are, and of the 
>consequence of removal to make sensible decisions. Thus your initial 
>comment that we should target benefits to those we all agree are "poor" 
>is a dangerous one.    

>Anyway, if we take your initial thread, is not all welfare payment wrong (
>in free market terms)?

>Audrey.

Since posting the article, I suddenly (gosh I'm quick on Monday mornings!!!) 
realised that you were wingeing about MIRAS, the tax relief, not the benefit 
paid for mortgage interest.

Actually, considering the popularity of MIRAS amongst the general 
population, I wish you luck in trying to get rid of it!!!  (Anyway don't all 
sorts of undeserving people get tax relief? What about Terry Wogan and the 
Scottish tree planting scheme!!!)

Regards 

Audrey.