Monetary Cranks Delay Reform in Cranked-Up Welfare States by Michael Heller - Project Syndicate

Monetary Cranks Delay Reform in Cranked-Up Welfare States by Michael Heller - Project Syndicate

“The welfare state evens out people’s chances in life, and it serves as career insurance against sheer bad luck … 

As Bi it normalizes people's chances not by reducing bad luck but by reducing chaos. 

The welfare state compensates and appeases those who lose out to technological progress and to the expanding division of labour and world trade. 

By normalizing outcomes it narrows the gap between winners and losers both of which can hit a ceiling and floor and collapse as in the GFC. 

It helps people with low productivity and prevents them from having to resort to fraud, theft, and other criminality. 

Low productivity is some people is averaged out by their joining a union, fraud and theft occurs more with secretive and deceptive R-B people. 

It insures people against economic risks in a manner and to an extent that private insurance could not possibly provide, and thus benefits everyone …

Government insurance in more Ro while unemployment insurance funded by wage contributions is more Bi. 

 Yet just as there can be too little state insurance, resulting in an inadequate social safety net, there can be an over-provision of insurance protection, resulting in moral hazard … Germany today suffers a moral-hazard problem with respect to unemployment benefits and wage supplements”.

Moral hazard does not arise from providing insurance but from not policing it adequately for fraud.