Welfare Mythology

Current popular wisdom in economic circles is that the welfare state is doomed and in part, or entirely to blame for some of the economic troubles of the world.

First off, there are components to this generic Welfare term.

Pensions, healthcare, social security.

Pensions
In my humble opinion, the problem with pensions is not only that when birth rates decrease, fewer people are around to generate the wealth for the pension pots, but also the constant bubble mentality of pension fund planners. Expected annual growth of funds is estimated too high over lengthy periods of time. All it takes is a few years downturn or an unforeseen event in the basket of bonds & shares to knock a big hole in the finances.

So my view on pensions? Yeah big problem. Anticipating yields over 30 years simply isn't something we seem to be good at. There are far too many unknown variables. We even seem to have entirely failed to take in to account changing demographics as a factor. It's more a case of stupidity than the pension plans of the world sucking the life out of economies. Hey ... Guess what kind of people it is that manage the pension funds and happily promise high yield returns? Nope. It's not that guy who's worried about loosing his job through ill health at the factory, it's that other guy who just got a huge bonus and has private healthcare.

Sadly the end result is. Yes. Pensions are now a problem for developed economies all over the place.

Healthcare
Here I've got a bit of an inside view on the UK's NHS problems. Being a bit of an oldie it spans a few years. Over that time I've seen a continuing cycle:

"We need cheaper centrally managed healthcare, it's an economy of scale"
vs.
"We need regional efficient, effective deployment of services"

There are many back arguments to the above, but that's the cycle I've seen repeating often with each change of government. So what happens then?

A few things. The old sites need to be sold off, often in such a bulk that it distorts the market a little in each region. Sometimes the huge sites lie dormant for years and years. They need paid security to stop travellers and squatters moving in. They don't immediately sell for millions and fund the changes. Funnily enough, when the call comes back to centralise, the derelict ex-hospital sites aren't considered because they are now so out of date and in need of demolition that it's cheaper to do a deal with a developer on a PFI deal on a new site, or expanding a smaller existing site.

So there's your every 4 year+ for various developers to take a bite out of the NHS. A fair few years back, the NHS had to bin it's own property management and architects. "Couldn't afford them. Would be cheaper to out source it". Ping. Wave goodbye to staff who previously had decades of experience managing NHS property. That costs! And welcome in PFI Bob and his golf buddy friends. No. Actually they aren't quite as bothered about getting value for money for the tax payer as the guy who was being paid by the tax payer. They'd rather have a new BMW / Audi for the family, and a nice big wedge of cash out of the next deal thank you very much. Oh. And they know less about hospitals than the people we just put out of a job.

It's not just the property department either. (Can you tell what side of the NHS I dealt with yet?). Every time this contraction, expansion cycle happens, it's taken as a chance to shed some staff along with the few that just can't physically work from the new locations. There goes some more in house skill.

The personal skill factor of employee's is something I see ignored. I think it costs businesses a hell of a lot more over time than is appreciated, especially so in an organisation as huge as a government or health service. It's like constantly stripping the bonus efficiency you had out of a system and binning it. It's also often false economy. Binning the NHS property management levels actually cost more in external consultancy fees even before you get to the increased costs in contract administration, and you're doing with people who know less than the people you had, so on a time charge basis, you're just screwing yourself badly.

Sighs.

Point is. I've seen the NHS get mauled like this time and time again. Every time you get a new bunch of suits and ties who gouge out a profit for as long as they can. PFI was a gift to everyone except the NHS and the tax payer. You're not talking pennies here. Each cycle of change would be flipping costs in the £100's of millions *per county*. A big chunk of that was heading in to private firm hands with the emphasis firmly on profit ahead of value for tax-payers money.

It's even possible. That there may have been the odd bit of behind closed door deals going on. Contractors like public funded work. The bills get paid.

Back to the point. No. Actually, I don't see the NHS as being an entirely impossible idea. I see continual greed and mismanagement, right up to government sanctioned PFI deals, cashing in on the NHS time and time again. I see skills being bled out of the system with very little chance for a system to develop before it's ripped up and changed again. Then there's Mr Economist pointing his finger at it and saying "Hey the NHS costs too much". It never stood a chance Mr Economist. Guess who kicks these cyclical changes off? The finance and economics departments looking for targeted savings with each change of boss. There is no easy billion £ saving, so lets just re-organise the whole thing again, and by the time you've done that, I'll have my pay packet and be out of the door.

Social Security
By now I've almost lost the will to keep typing.
Just no. Are you honestly telling me, that if someone gets made redundant, or falls ill, we as a society just don't give a shit. Nope. I don't want to put my employment insurance with one firm and my health insurance with another, because I've seen what profiteering ass-holes run insurance funds. I've already got private pension funds in my past that are worth nothing now. The government wanted me to go on to those because they didn't want to pay so much out on my state pension. Cheers guys. Nicely shafted me again. So no. I'm not buying that private insurance is safe at all, if it even ever paid out. "We're you miss sold PPI?"...

Blurgh
I'm getting so fed up with the stupidity and narrow minded view on "Welfare" same as the "Socialism" warmongering. I'm fed up with people who have run systems that have constantly failed for decades to be telling us that the only hope of salvation is more of the same. Maybe try figuring out the economics for a system not based on greed for once in the entire history of the human race? What if you did run a health service with very tight monitoring of *any* external profit made from tax-payer money? You supply towels? Beds? Buildings? Machines that go ping? We want to see all your accounts and you're allowed X% profit. No more.... Well ideally, you'd actually get value for money with fair profits and wages resulting from it. In reality? You'll get falsified salary claims, beefed up expenses, all the same old greed as usual, just via new and different methods. Even so. I'd still rather give my method a try than let people die for loosing a job.