Canada’s essential welfare system. Is it beneficial to the economy?

Welfare is a sustainable policy that is vital to any economy. To explain why this is true, first, we need to understand what is a Social Contract. Not Socialism, which was the concept of Marx and Lenon in 1845 but rather – Social Contract (1654 – Thomas Hobbes).

Freedom – in a monetary society, is the difference between reliable salaries or incomes – and the cost of living in every region of a country. Starvation Wages – are incomes below cost-of-living. Then, of course, there can be those who can find no reliable access to incomes – the unemployed, elderly, infirm, and so on. In a mature monetary society like Canada, money is like air; you cannot live without it. To try is to doom oneself to isolation and no community support whatsoever.

There are other systems of commerce. The Monetary System is a system of token-passing that evolved from the Bartering System, which in turn evolved from smaller systems of communal exchange. A combination of Bartering and Monetary commerce is common throughout the world still today – and once computers and assembly lines create all of our basic needs automatically, the need for a monetary system will likely fall off again as well. Managing these transitions well is critical to our day-to-day lives and to the future of humanity too.

In a mature token-passing economy, people without access to incomes – or with only access to starvation wages, cannot be productive for that economy. The greatest asset that any country has is its people, but if people have no opportunity to contribute – or find that it is too risky for them personally – or for their family, to start businesses, to export, and to contribute to the economy, they cannot be productive nor contribute. When a significant percentage of a population can not be productive, the economy will suffer, long before stresses require a revolution to correct. Unsustainable policies like “No Welfare” and “Inequity” turn our essential-asset people, into drains and liabilities for our economy.

Consider the United States’ situation as reported in the 2010 Federal Reserve Report. Blue Collar workers should be able to afford modest homes, families, savings and pensions, but here we see that 40% (130-million people) own nothing.  If we compare the productivity of a high-scoring social contract nation like the Netherlands to Americans, the amount of its citizen’s export is six times higher and this amounts to a staggering $30-billion loss every day. That’s 52% of the U.S. economy, and in Canada it’s $4 billion per day and 63% of the economy (csq1.org/SCP).

This is why inequity is a very important problem to correct. This is also why Constitutions in large democracies must be updated once they grow over 15-million population (in the U.S., this number was passed in 1850 and in Canada the population exceeded 15-million in 1950). So, to guarantee minimum social supports – including guarantees of food, shelter, empathy, healthcare, security – the assurance of Freedom to be productive and to contribute. This is a proven fact – so read on a little more.

Despite the fact that proper Welfare budgets can return $4 for every $1 invested, welfare programs seldom meet the needs of individuals or families sufficiently. Starvation wages won’t tempt people away from welfare that offer a minimum support as they only trade one form of lost-freedom for another. 

What does a brilliant Welfare system look like?

Welfares, therefore, do little to address inequity by themselves at the same time that they are unpopular with an electorate uneducated in these statistics above. A smarter approach to a welfare system, therefore, is for a nation to reduce the cost of a basic Social Contract to zero – for both the government and for those unable to participate in the monetary system, to replace businesses offering starvation wages with living wage firms, to ensure family values so that a single income can afford all costs of living, and to invoke Full-Employment policies that ensure every household is afforded the dignity of a home, income, and freedom.

This need can be built through automated Public Social Infrastructure Utilities (see Worthwhile Industries) and pausing of rents and mortgages. Until this realization is understood by democratic voters who elect similarly-uneducated politicians into power, welfares must be paid to ensure people can simply continue breathing until other monetary support can be found.

Does a strong Social Contract influence the economy? Yes, it does – and there is more at stake than economy too; there is the essential need for empathy and humanity in every civilization. Social Contract is what Transition Economics calls a Causal indicator. This means that high scoring Social Contract nations share an advancing economy 100% while low-scoring Social Contract scores are predictive of a collapsing economy 100%.

Was there gross inequity as we see today in the American Dream era of the 1950s and 19560s? No. FDR enacted a 92% tax on the top 1% income-earners and an 80% estate tax on wealth in 1940, while Welfare and Full-Employment policies worked to feed an American population that experienced 70% and 80% unemployment in some regions for a period of time. The rich did very well with this high level of taxation, and so did everyone else – and these programs continued unchanged for twenty-years until John Kennedy lowered these taxes realizing the economy was now fully restored.

By the 1950s salaries were high, and one income families were assured of creating a sustainable birthrate of 3.0 children per woman nationwide, with incomes sufficient for homeownership (a cornerstone of economic success in any country). It only took a couple of years salary to own a home mortgage-free back then. There were also pensions, healthcare was affordable, and a very affordable cost-of-living dominated. People could even afford luxuries like cottages, farm tractors, and also to take a little time away easily enough. Nationalism protected U.S. businesses from foreign competition, and only men with families could hold senior jobs in government or business. A Good Life worked in this balanced monetary system society.

This strong Social Contract meant that people could be productive, and could make decisions on moral grounds, and this economy boomed as no other ever did in history. Hewlett & Packard created an enormous technology company from their garage – and the world looked to the United States as an example of everything right in the world – until …

Mature capitalism & imbalance – all started in the 1970s with salary stagnation, and then the big guns of inequity hit us in the 1980s – low-tax benefitted the rich much more and it created massive debt – which is serviced by the poor primarily, small government policy let the financial industry invest in private real estate and permitted foreign investment and competition, and none of the impacts this created to our social contract was measured – ever. GDP Reports were designed in 1652 to always be positive – and indicated nothing of the social contracts that fell steadily away this past 30-years in the U.S.. Today, America loses $37 billion every day to its hundred million or so citizens made unproductive by a far too low social contract here.

Not every country did capitalism well, but some really do; Italy, Germany, and Japan had FDR’s Second Bill of Rights installed in their Constitutions as part of the Marshall Plan after WW-II, and they are the only advancing economies in the G7 today. Six weeks paid vacations, maternity leave, strong opportunity, great healthcare, pensions, great schools, free university in many cases, and taxes are much lower than the U.S. private insurance shams. There might not be a Ferrari, Maserati, Lamborgini, Alpha Romeo, or Ducati in every driveway, but you might find a nice Fiat there for certain.

These countries lost the war, but they won the peace. Every Marshal Plan nation that accepted FDR’s Second Bill of Rights into their constitution is advancing today – every one of them.

Take a look at ACTCanadian.com or ACT-American.com to understand FDR’s nine turnaround policies (about half were conservative and half liberal – but the difference was that all were Sustainable). So why is wealth and income distribution – and welfare – a sustainable policy? Having rich people isn’t a problem – they can be productive; it’s having a lot of poor people – a hundred million assets who can’t be productive – that’s the problem.

High Social Contract is measured in longevity, suicide rates, inequity, and other social problems. Here we see that in a survey of 158 nations, stronger social contract scores are synonymous with a higher rate of advancing economies. We also see that low social contracts create low economies. Further explanation at http://transitioneconomics.info

The U.S. has a Wealth GINI of .80 and an income GINI of .41 – think of GINI as the amount of wealth owned by the top-10%

First Wealth Inequity – notice how much higher countries with low GINIs (greater wealth distributions – shown here on the left) have advancing economies?

Next, Income Inequity: Income Inequity quickly has a strong influence when it falls below .34. Canada’s Income Inequity has changed from .32 in 2019 to .38 today – a dramatic change due to unsustainable policies like housing bubbles, double income policies, diversity laws here.

Canada doesn’t run a single one of FDR’s sustainable policies and President Trump’s party runs just two: Full-Employment and Nationalism.

So there are changes ahead for Income or Wealth Inequity – which will make productivity fall further, which will serve to create currency wars, trade wars, and then real wars – as mature capitalisms have on most occasions. Imbalances between salaries and cost of living are called starvation wages – and in many cases people have only very intermittent access to income in a mature capitalism. Hobbes, Dickens, Lord Byron, Tolstoy, Rousseau, Orwell, and Hugo are just a handful of the authors who warned against permitting mature capitalisms.

There are more conflicts in this decade than at any other time in history – and this was true right before World War I and II as well. Low Social Contracts impact most of the 80% of nations that find themselves in a collapse-trending today – and no party supports the policies needed to turn this around.

We live in a mature nuclear era, where the nuclear winter created by World War three will be an extinction-level event – for the first time in thirty recorded mature histories in history.

And if history repeats, WW-III starts before 2028. How? By some random spark in a worldwide powderkeg created by low social contracts driven by – you guessed it – Inequity. Really – no kidding – as in this is a mathematical certainty without correction.

Pay attention to Welfare and Inequity supports that ensure a high Social Contract, unless you are actually suicidal or genocidal. And pay attention to all of FDR’s turnarounds – they built a sustainable society, and American Dream, so they’ve got a proven track-record – and they are proven today by Econometric Scientists too – see The World at our Hands Report. You should also be thinking twice about the nonsense terms that surrounded you as these powderkegs built-up too. “isms” are meaningless terms – deprecated in scientific economics like Transition Economics, “Right”, “Left”, Conservative, Liberal – only Sustainable matters.

Only Life Matters (“The Fifth Element”); “Mankind was my business” (Dickens), “Be Excellent to each other” (Bill & Ted), “Do unto others” (the Golden Rule – every Bible and religion) – is not a nice-to-have sentiment, its a proven sustainability model – and forgetting this, or mistraining it out of any population (Havek, Friedman, etc.), is the reason every great civilization in human history has perished at a time.

These mistakes are all correctible of course, I’m no fear monger and nor should anyone have to be, all you have to do to correct all of this is to vote for ACT Parties that only run sustainable policy – or for local parties that are certified by ACT. World Peace was what the U.N. was originally built to do – but belly-flopped, but ACT is a thesis designed to actually build World Peace (Sustainable Societies) – with or without a United Nations.

Do you want to know the real irony for persons who reject Welfare – or any sustainable policy? It’s this. In about 20-years, our automations – with just a little bit of leadership – will automate all of our basic needs of a strong social contract, and we won’t have need of money to sustain ourselves really. Nations will be self-sufficient, and we can all get along just fine until another income presents. Its the American Dream all over again – we’re good to go – if we can just survive the next 20-years.