# Universal Basic Income: the answer to unemployment by automation



## Value Collector (12 March 2018)

Traditionally, The goods and services we need and want have been produced by a blend of Capital and labour.

However, increasingly the labour component is shrinking which will eventually lead to mass unemployment caused by a smaller need for workers, while the capital investment needed gets more intensive.

The solution to this might be what is called "universal basic income", where everyone rich or poor is paid a basic living wage, regardless of whether they work or not, and regardless of whether they are rich or not.

This will ensure those unable to work can still live, however those that can work are still rewarded with wages on top of their "Universal basic income", and those willing to invest into the system are rewarded with earnings on top of their "Universal basic income"

The instinctive reaction we be that it should be means tested or that wage earners shouldn't get it, this is a bad idea.

If it were means tested, no one living on the basic wage would ever want to invest, and you would forever have a fixed class of poor and super rich, the middle class would disappear, and it would be impossible to move up, because as soon as you had savings, your wage stops and you have to burn you savings.


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## basilio (12 March 2018)

IMV it is going to have to come. Arguments on social stability and the capacity of the economy to keep functioning with millions of people without any income will become critical.

Be interesting to see how the discussions develop.


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## SirRumpole (12 March 2018)

It will need comprehensive tax reform.

They should revisit Ken Henry's tax proposals.


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## Value Collector (12 March 2018)

SirRumpole said:


> It will need comprehensive tax reform.
> 
> .




I think it would take a lot less than you think, any reduction in the cost of labour would either. 

1. increase company and individual  taxable profits - which would increase tax revenues from those course automatically.

2, reduce prices - which means the "universal basic income" could be smaller, so the tax burden wouldn't be as high.

Not to mention that automation will also reduce the costs of government services, which would free up funds for the basic income payment.


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## basilio (12 March 2018)

I think a good tweak to a USB system would be incorporating some community service component. People would need/like to have some useful structure in their lives and the opportunity to socialise.

It's the type of concept that a quality cross government committee could investigate in detail and come up with bi partisan proposals.


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## SirRumpole (12 March 2018)

Apparently Bill Gates isn't keen on a UBI just yet, but thinks it will come in the future.

https://futurism.com/4-bill-gates-thinks-countries-arent-ready-for-basic-income-yet/


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## Value Collector (12 March 2018)

Richard Branson is onboard too. there was a time that unemployment payments seemed controversial.


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## Value Collector (12 March 2018)




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## luutzu (12 March 2018)

What's with these billionaires a-holes and their talk to do good, charitable work.

Freaking... just pay your own employees a fair working wage they can survive on. That's it. 

Stop lobbying for special deals from state and federal gov't just to put down your factory; stop lobbying for tax cuts; stop pretending that profits and earnings from investing in the financial markets aren't real income so should be taxed less than labour/waged income. 

It's really annoying hearing these bs. Maybe the Koch brothers or Kerry Packers are more respectable because they just don't pretend to be liberal and sweet.


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## luutzu (12 March 2018)

Value Collector said:


> Richard Branson is onboard too. there was a time that unemployment payments seemed controversial.





"Risk of income inequality is coming" ???

When 87% of all wealth generated in 2017 goes to the top 1%... yah, it's probably here already Richie.


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## SirRumpole (12 March 2018)

luutzu said:


> What's with these billionaires a-holes and their talk to do good, charitable work.




They have noticed the elephant in the room, which is that their staff are consumers and sacking them is bad for business. Of course none of them ever say that the money for a UBI should come from higher taxes on business, but that is another elephant that they can't see.


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## Value Collector (12 March 2018)

SirRumpole said:


> Of course none of them ever say that the money for a UBI should come from higher taxes on business, but that is another elephant that they can't see.




"Money" is just a medium of exchange and accounting.

The purpose of business is not to make "money", Money is just the conduit, the only reason business owners want money is because we can exchange it with other business owners for the output of their businesses.

The purpose of any business is to create products and services which can be exchanged with other producers of products and services that the owners want or need to survive.

At the moment most businesses require large amounts of human labour, So the output of the business must be shared with the people providing the labour.

In a system where labour wasn't required, business owners could just trade their output with other business owners in a closed system, there would not be any need for "customers" who weren't them selves producers of some product or service that could be traded.


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## SirRumpole (12 March 2018)

Value Collector said:


> In a system where labour wasn't required, business owners could just trade their output with other business owners in a closed system, there would not be any need for "customers" who weren't them selves producers of some product or service that could be traded.




Your logic is scrambled there. Supermarkets don't just sell groceries to other businesses because businesses of themselves don't consume groceries, people do whether they run businesses or not.


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## Value Collector (12 March 2018)

SirRumpole said:


> Your logic is scrambled there. Supermarkets don't just sell groceries to other businesses because businesses of themselves don't consume groceries, people do whether they run businesses or not.




I said business owners, 

At the moment, Supermarkets sell to people with money, who are either owners of capital or providers of labour or a combination of both (excluding the people on welfare)

that money is just a token that the person has earned by either being an owner or a worker in the system that produced goods and services for the economy (except those on welfare, who are a drain on the over all system)

The system doesn't rely on the unproductive people (except that we need to earn back the money we paid in tax), it would work just fine if goods and services were just traded among those that own the system that produced them or provided the labour.

If labour wasn't required, we wouldn't need to trade with the workers, more goods and services would be available to the owners to trade with other owners.

Offcourse I don't think that would be the best system though,


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## luutzu (12 March 2018)

SirRumpole said:


> They have noticed the elephant in the room, which is that their staff are consumers and sacking them is bad for business. Of course none of them ever say that the money for a UBI should come from higher taxes on business, but that is another elephant that they can't see.




Yea, those UBI will not be coming out of these billionaires' pockets that's for sure.

It will most likely be some sort of state welfare. I mean, they're all against the minimum wage so why would they be for any sort of guaranteed income to people?

WalMart, and now Amazon, literally have sessions where they teach their employees how to claim food stamp. So employees working for these guys full time can't afford to put food on the table, are somehow eligible for gov't assistance. 

That mean more tax dollars are going towards WalMart to help feed their workers. WTF? 

And all the Waltons have their own "charitable" foundations. Yea, to help people I am guessing.









Jeffy requesting ideas to help people. Seriously. 

Start by looking at your own warehouse Jeffo. Failing that, look up their pay summary.


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## SirRumpole (12 March 2018)

Value Collector said:


> The system doesn't rely on the unproductive people (except that we need to earn back the money we paid in tax), it would work just fine if goods and services were just traded among those that own the system that produced them or provided the labour.




Then why on earth are you proposing a UBI if it's completely unnecessary according to you ?


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## Tisme (12 March 2018)

Sometimes we have to look back to look forward:

http://www.econ.yale.edu/smith/econ116a/keynes1.pdf


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## luutzu (12 March 2018)

Tisme said:


> Sometimes we have to look back to look forward:
> 
> http://www.econ.yale.edu/smith/econ116a/keynes1.pdf




Was the optimism before or after that Battle for Britain?


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## Tisme (12 March 2018)

luutzu said:


> Was the optimism before or after that Battle for Britain?




Always a spanner in the works just waiting to happen.


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## moXJO (12 March 2018)

So how are all those poorer countries going to go?


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## luutzu (12 March 2018)

moXJO said:


> So how are all those poorer countries going to go?




Drown in either water, sand... or fire and blood. Or is it fire and fury. 

That or the Gates Foundation might turn up and give them a few chickens, and maybe a Nokia MS-powered mobile or Surface.


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## Value Collector (12 March 2018)

SirRumpole said:


> Then why on earth are you proposing a UBI if it's completely unnecessary according to you ?




Because I don’t want people to starve, and it’s the right thing to do, and it would probably prevent a revolution, and create a society that’s good to live in.

But yeah, there is no economic law that says you need to share the output of your factories with people that aren’t productive, the reason you want to own a factory is to produce large amounts of goods you can trade with other factory and business owners.


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## Value Collector (12 March 2018)

moXJO said:


> So how are all those poorer countries going to go?




They will need capital investment to till their soils, mine their resources and build factories and other businesses.

Then through taxation those capital investments will give up a share of their output, and fund the Ubi


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## moXJO (12 March 2018)

I'm noticing a lot of micro market type business poping up. People advertising on facebook local pages. Clothes, food and most hand made. A lot cheaper than the shops. Even small markets etc.
The big stores have cut down on variety, they have cut a lot of lines actually.

Who's to say we won't develop a cash economy. I don't see a total takeover by big companies. People want to get ahead.


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## sptrawler (12 March 2018)

Jeez, come on a touch of reality people, please.
When I first went to Thailand in the mid 1990's, the exchange rate was from memory about $24Aus to 1,000 Baht. 
I just changed some money for a trip I'm doing, it is now $40Aus to 1,000 Baht.
So I don't know how your math's is, but to my simple brain, it seems like our dollar is worth half of what is was against the Thai Baht.
At the same time again from memory, I think our dollar was $3 Singapore dollars, that hasn't gone so well either.
But we still are the great white hope of SE Asia, I don't think so. 
Thai's that come here and take citizenship, usually by marriage, I believe have to recind their Thai citizenship and can't own land there.
Can't wait to see how that plays out, on the internet marriage scene.lol


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## moXJO (12 March 2018)

Value Collector said:


> They will need capital investment to till their soils, mine their resources and build factories and other businesses.
> 
> Then through taxation those capital investments will give up a share of their output, and fund the Ubi



Thats a bit blue sky.


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## Value Collector (13 March 2018)

moXJO said:


> Thats a bit blue sky.



How else can it work? 

I mean they don’t have to do it if they don’t want, they can just do business as usual and get the same results they get now.

But there is nothing stopping Africa being super productive except politics and a lack of capital investment.

We don’t have anything Africa doesn’t have, except political and economic stability.


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## Value Collector (13 March 2018)

sptrawler said:


> Jeez, come on a touch of reality people, please.
> When I first went to Thailand in the mid 1990's, the exchange rate was from memory about $24Aus to 1,000 Baht.
> I just changed some money for a trip I'm doing, it is now $40Aus to 1,000 Baht.
> So I don't know how your math's is, but to my simple brain, it seems like our dollar is worth half of what is was against the Thai Baht.
> ...



What is your point?


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## luutzu (13 March 2018)

Value Collector said:


> How else can it work?
> 
> I mean they don’t have to do it if they don’t want, they can just do business as usual and get the same results they get now.
> 
> ...




Like that fork in the road, it's the political and economic stability that makes all the difference 

That and the colonisers actually live in Australia so they kept most of their loots in the system.

Ah man, I could tease you white capitalist all day.


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## Value Collector (13 March 2018)

luutzu said:


> Like that fork in the road, it's the political and economic stability that makes all the difference
> 
> That and the colonisers actually live in Australia so they kept most of their loots in the system.
> 
> Ah man, I could tease you white capitalist all day.



 The original question was “what about the poor countries” of course they can just be left to rot, but if they are to thrive, of course that’s going to take a lot of investment at least equal to the huge investments that have been made in the developed world.

They are no different to us in that output requires capital and labour, or in the future mainly capital.


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## moXJO (13 March 2018)

Value Collector said:


> How else can it work?
> 
> I mean they don’t have to do it if they don’t want, they can just do business as usual and get the same results they get now.
> 
> ...



Its a massive transition. Look at china, I doubt they could do it without the population being up in arms.


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## sptrawler (13 March 2018)

Value Collector said:


> What is your point?




While we can ponce on about which alternative fuel we are going to use, as our economy slides down the effluent tube, our third world neighbours will be soon be using you and your Tesla as  a tuk tuk.lol
Don't you read any of the posts? our dollar is sliding against most third world countries, this lifts their economies and lifestyles.
You are a computer generated response, aren't you?


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## SirRumpole (13 March 2018)

Value Collector said:


> Because I don’t want people to starve, and it’s the right thing to do, and it would probably prevent a revolution, and create a society that’s good to live in.




Business owners (shareholders) are a small group of people who would not have the consumer base to make a profit if they just trade among themselves.

If you want to include the super funds and their clients as "business owners" then that makes more sense, but then calling retirees "unproductive" undercuts your argument. 

Personally I don't consider shuffling bits of paper around between companies to be particularly productive, you are not supplying more capital you are just doing the same thing as selling used cars and not actually manufacturing them.


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## luutzu (13 March 2018)

SirRumpole said:


> Business owners (shareholders) are a small group of people who would not have the consumer base to make a profit if they just trade among themselves.
> 
> If you want to include the super funds and their clients as "business owners" then that makes more sense, but then calling retirees "unproductive" undercuts your argument.
> 
> Personally I don't consider shuffling bits of paper around between companies to be particularly productive, you are not supplying more capital you are just doing the same thing as selling used cars and not actually manufacturing them.




That's a bit offensive Rumpy. I kinda met a couple of car sales guys and they only try to cheat me a bit onl.


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## Value Collector (13 March 2018)

SirRumpole said:


> Business owners (shareholders) are a small group of people who would not have the consumer base to make a profit if they just trade among themselves.
> 
> If you want to include the super funds and their clients as "business owners" then that makes more sense, but then calling retirees "unproductive" undercuts your argument.
> 
> Personally I don't consider shuffling bits of paper around between companies to be particularly productive, you are not supplying more capital you are just doing the same thing as selling used cars and not actually manufacturing them.




Anyone owning capital in the system would be an “owner” in my example, that includes all small and large business owners, shareholders, bond holders and debt holders etc etc.

Of course they are productive, they own the robots and land making all the products and services, and are taking the economic risks,shareholders continually add more capital, pretty much no company pays 100% if profits as dividends, so shareholders are always adding more capital via retained earnings.


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## SirRumpole (13 March 2018)

Value Collector said:


> Of course they are productive, they own the robots and land making all the products and services, and are taking the economic risks,shareholders continually add more capital, pretty much no company pays 100% if profits as dividends, so shareholders are always adding more capital via retained earnings.




So would you consider superannuate retirees productive or not ?

How about government pensioners ?


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## Value Collector (13 March 2018)

SirRumpole said:


> So would you consider superannuate retirees productive or not ?




If they have capital invested in the system, producing goods and services, then yes.



> How about government pensioners ?




If they are no longer using either their labour or capital investments to produce goods and services, but are drawing out goods and services from the system, then no.


> Business owners (shareholders) are a small group of people who would not have the consumer base to make a profit if they just trade among themselves.




If their businesses were entirely automated, their over head costs would be significantly reduced, they would only have to produce enough goods and services to sell to get enough money to cover the maintenance on their robots and supply them with enough money to buy the things they need and want from the other producers.

Imagine if Elon owned 100% of Tesla, and it was just a factory of robots producing cars, that he could sell for $50,000. each car might have $20,000 of raw materials in it that his robots use to produce produce the car.

With no employees, he only needs to produce enough cars to sell into the system so as to pay for the the products and services he wants and needs, and the owners of those other business who might also be fully automated, only need to produce enough to sell so they can get the products they need and want, eg one of Elons teslas. 

In reality Tesla will Be owned by thousands of share holders and bond holders, So the money from the sale of cars would be distributed among a wide group of people, Same with all the other businesses.

And the government legislates that the companies have to give up 30% or so of their production as Tax, which could be used to fund the UBI.

So the system would be producing and supplying the unproductive people, but it reality it doesn't need them, its just be legislated by government that it must serve them, by handing over 30% of their profit to them, which then they have to go and serve them to try and get back.


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## Value Collector (13 March 2018)

sptrawler said:


> While we can ponce on about which alternative fuel we are going to use, as our economy slides down the effluent tube, our third world neighbours will be soon be using you and your Tesla as  a tuk tuk.lol
> Don't you read any of the posts? our dollar is sliding against most third world countries, this lifts their economies and lifestyles.




I would expect their economies to improve over time and their currency to rise in value.

I don't think thats a sign that we have weakened, as much as its a sign that they have strengthened.


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## Value Collector (13 March 2018)

moXJO said:


> Its a massive transition. Look at china, I doubt they could do it without the population being up in arms.



Hence the need for a UBI as the system transitions.


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## SirRumpole (13 March 2018)

> How about government pensioners ?  (being productive)
> 
> If they are no longer using either their labour or capital investments to produce goods and services, but are drawing out goods and services from the system, then no.




I don't think your economics are quite complete, you only look on the production side.

Anyone who consumes goods and services and thus creates a demand for them, provides the opportunity for others to satisfy that demand by producing the goods or services and therefore creating businesses and employment.

If we want to encourage new businesses and generate employment, then giving pensioners more spending power and creating demand would be a good place to start.


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## Tisme (13 March 2018)

There is a reason Musk begrudgingly considers it an inevitability...because it is predicated on the population owning the means of production and enjoying the profits derived .... it's marxism.

How will communist and capitalist countries cope with that scenario .....my guess war and appropriation.


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## moXJO (13 March 2018)

Its a hard one to wrap your head around. Marxism is exactly what it sounds like. It seems to need a  perfect system to work in as well. 
Too many holes in it at the moment.


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## Value Collector (13 March 2018)

SirRumpole said:


> Anyone who consumes goods and services and thus creates a demand for them, provides the opportunity for others to satisfy that demand by producing the goods or services and therefore creating businesses and employment.




If you own a cafe, and I come and tax you by taking $5 out of your pocket, then I give it to a pensioner, who comes and spends it at your cafe, has it really generated wealth or extra value for you?

No it hasn't, off course if you were going to be taxed the $5 no matter what, you would welcome the chance to earn it back rather than lose it for good, however because the $5 was yours to begin with, simply giving it away so it can be spent at your shop again is not generating any extra value for you, its actually a drain, because even though you did get the $5 back, you lost the $1.5 of raw materials the pensioner consumed.

Economies flourish by producing large amounts of goods and services and distributing them, however anyone that is not producing at least the amount of products and services that they are consuming is a drain on the system, People that are producing more than they consume are adding to the system.


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## SirRumpole (13 March 2018)

Value Collector said:


> Economies flourish by producing large amounts of goods and services and distributing them, however anyone that is not producing at least the amount of products and services that they are consuming is a drain on the system,




Well then, most people are a drain including your good self.

If you think that buying and selling existing shares constitutes "production" then you are sadly mistaken.


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## Value Collector (13 March 2018)

SirRumpole said:


> Well then, most people are a drain including your good self.
> 
> If you think that buying and selling existing shares constitutes "production" then you are sadly mistaken.




I don't "buy and sell shares", I "own businesses" very rarely selling. 

The $5 I would spend at your hypothetical cafe, would not be coming from your pocket, it would be coming from the sale of goods and services produced at my companies, The assets I own via my share holdings in companies are actively producing and adding products and services into the economy every day.


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## SirRumpole (13 March 2018)

Value Collector said:


> The assets I own via my share holdings in companies are actively producing and adding products and services into the economy every day.




But if there is no demand for what "your" companies produce then you are stuffed.

UBI is more than just a generous gift from the well off few to the plebs, it's essential to maintain the economy, because your spiel about businesses only needing to trade amongst themselves is quite frankly nonsense.


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## moXJO (13 March 2018)

So lowballing the pop to 25 mill, with $500 a week payment. Thats what a year?  $700 billion or so? (My maths right there?)
If you cut out all public service that currently pushes paper around for welfare. Wipeout all tax breaks. Allow for roads and services. 
Is it doable? 

How do you keep companies in Australia?


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## Value Collector (13 March 2018)

SirRumpole said:


> But if there is no demand for what "your" companies produce then you are stuffed.
> 
> .




As the hypothetical cafe owner, you would be better off keeping that $5 in your pocket rather than giving it to the pensioner, the extra business activity generated by the pensioner isn't a net plus for you.



> UBI is more than just a generous gift from the well off few to the plebs, it's essential to maintain the economy, because your spiel about businesses only needing to trade amongst themselves is quite frankly nonsense




Remember I am for UBI, (not yet, but in the future).

But it is simply taking a portion of the production produced by the capital assets of the economy and giving it away, aside from being the right thing to do for people and to prevent a revolution, it is not required to maintain the economy, the economy would just adjust to serving those that are part of the productive system, we can do perfectly ok ignoring poor third world countries economically, ignoring the unproductive elements of the Australian public would be the same.

As in my example, as the cafe owner, you don't need to give that pensioner your $5 just so they can spend it at your store, you would be better off without it, and just serve the real customers whose money is not coming from your pocket.


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## Value Collector (13 March 2018)

moXJO said:


> So lowballing the pop to 25 mill, with $500 a week payment. Thats what a year?  $700 billion or so? (My maths right there?)
> If you cut out all public service that currently pushes paper around for welfare. Wipeout all tax breaks. Allow for roads and services.
> Is it doable?




Don't forget in a fully automated system you have a big wages bill disappearing off the profit and loss statement of all the Australian businesses, this would increase the taxable income, and make it possible for the companies to pay more in tax without reducing their return on the equity and ability to pay dividends and interest to the capital owners.



> How do you keep companies in Australia?




It's impossible for a lot of them to move.


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## SirRumpole (13 March 2018)

Value Collector said:


> As in my example, as the cafe owner, you don't need to give that pensioner your $5 just so they can spend it at your store, you would be better off without it, and just serve the real customers whose money is not coming from your pocket.




That $5 doesn't just come from your pocket, it comes from the pockets of other businesses, individual taxpayers and consumers as well as other forms of revenue like resource taxes etc.

So if you break it down then you may be paying only 5c tax to sell a $5 cup of coffee.

Feel better now ?


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## moXJO (13 March 2018)

Value Collector said:


> Don't forget in a fully automated system you have a big wages bill disappearing off the profit and loss statement of all the Australian businesses, this would increase the taxable income, and make it possible for the companies to pay more in tax without reducing their return on the equity and ability to pay dividends and interest to the capital owners.
> 
> 
> 
> It's impossible for a lot of them to move.



Rise of a cash economy? 
Or cryptocoin economy I suppose.


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## Value Collector (13 March 2018)

SirRumpole said:


> That $5 doesn't just come from your pocket, it comes from the pockets of other businesses, individual taxpayers and consumers as well as other forms of revenue like resource taxes etc.
> 
> So if you break it down then you may be paying only 5c tax to sell a $5 cup of coffee.
> 
> Feel better now ?




What is true for the $5 from the cafe owners pocket, is true for the whole economy as a whole, whether the pensioner took $5 from your pocket, or $5 spread across the whole economy the end result is the same, a share of production is being allocated away from the people who produced it, to people who are not producing anything, reducing the amount of goods and services available for the producers.

Of course if you owned a cafe in an area full of pensioners, you would be doing well from the flow of the pension funds, but this is at the expense of the tax payers funding those pensions but who aren't getting the chance to earn it back.


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## Value Collector (13 March 2018)

moXJO said:


> Rise of a cash economy?
> Or cryptocoin economy I suppose.




Cash, crypto's, gold, sea shells, bear skins it doesn't really matter, the unit of exchange is not important, the production and distribution of the goods and services is.

I own about 0.004% of Fortescue Metals, last year my share of the 170,000,000 tonnes of Iron ore they produced was 6,800 tonnes, whether that gets sold for Cash, crypto or sea shellsI don't care, as long as which one my dividends get paid to me as I can spend and get the stuff I need.

the most important part is that I put 6800 tonnes of iron ore into the economy, so I can then go and take out some bread, rum, petrol or anything else I need, the unit of exchange of the day is less important.


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## SirRumpole (13 March 2018)

Value Collector said:


> reducing the amount of goods and services available for the producers.




I'm afraid you just don't get it so, I'll get out of here but just repeat that a businesses profits depend on having the largest number of customers that it can with the spending power to buy their products.

Where these customers come from is irrelevant, everyone pays tax and if the balance of the burden has to change from those who have money to those who don't to maintain consumer spending and business profits then so be it.

Do you really think that if only shareholders (a lot of whom may be foreign) bought groceries in this country that the supermarkets would stay in business ? If you do then I'm afraid you are sadly deluded.


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## Humid (13 March 2018)

sptrawler said:


> Jeez, come on a touch of reality people, please.
> When I first went to Thailand in the mid 1990's, the exchange rate was from memory about $24Aus to 1,000 Baht.
> I just changed some money for a trip I'm doing, it is now $40Aus to 1,000 Baht.
> So I don't know how your math's is, but to my simple brain, it seems like our dollar is worth half of what is was against the Thai Baht.
> ...




I would suggest you travelled through the Asian financial crisis.
The baht was tied to the $US years as well.


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## Tisme (13 March 2018)

SirRumpole said:


> Do you really think that if only shareholders (a lot of whom may be foreign) bought groceries in this country that the supermarkets would stay in business ? If you do then I'm afraid you are sadly deluded.




Take Myers for example


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## SirRumpole (13 March 2018)

Tisme said:


> Take Myers for example




Indeed so, they are suffering because of low consumer confidence due to stagnant wages.

Maybe all their shareholders should get out there and start buying stuff from "their" company and save it going broke.


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## Value Collector (13 March 2018)

SirRumpole said:


> that a businesses profits depend on having the largest number of customers that it can with the spending power to buy their products.




yes and thats true, provided that spending power isn't coming from the pockets of the business owners.

if you disagree, please buy a cafe and give me $100 a day to spend in it, and see if you feel like you are getting richer by me spending your $100 everyday.

Of course you are better of if I spend your money in your store, rather than a competitor, but either way its your money I am spending, so there is no net gain for you.

this is true for the individual or the economy as a whole.


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## SirRumpole (13 March 2018)

Value Collector said:


> yes and thats true, provided that spending power isn't coming from the pockets of the business owners.




So you are advocating zero taxes are you ?


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## Value Collector (13 March 2018)

SirRumpole said:


> So you are advocating zero taxes are you ?




Nope, I haven't said that.

Taxes pay for all sorts of productive things.

Am not even against taxing the productive economy to pay pensions and the BUI, as I said I am for that, I am not anti pensions.

I am just under no illusions that diverting a portion of the productive capacity of the economy to supply unproductive groups some how creates extra value, if it did we should just give every pensioner $100K a year, if them spending that $100K some how added $110K into the economy that is what we would do, however it doesn't add to the economy, them taking resources out of the system doesn't add anything back in, it simply alters who gets what, it doesn't create anything extra.

If you really believe that people on the pension and the dole are generating value for the economy, why are we against dole bludgers? we should just keep importing more and more people to fill up the dole lines if its good for the economy.

the truth is two bad things happen, not only do unproductive people take money out of the pockets of the productive, but they then use this money for competing bids against those people on goods and services forcing prices higher.


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## SirRumpole (13 March 2018)

Value Collector said:


> I am just under no illusions that diverting a portion of the productive capacity of the economy to supply unproductive groups some how creates extra value, if it did we should just give every pensioner $100K a year, if them spending that $100K some how added $110K into the economy that is what we would do, however it doesn't add to the economy, them taking resources out of the system doesn't add anything back in, it simply alters who gets what, it doesn't create anything extra.




Really, yours is just a rhetorical argument, and all this stuff about "business owners are the only ones who are productive" is so much ideology that has little relevance to the real economy. You probably learned it in Capitalism 101, but that doesn't mean its a model for how things really work.

Dole "bludgers" and retirees are two different things. One group has paid taxes all their lives, the other hasn't, and I'm for a certain percentage of volunteer work in return for the dole, and for an BUI as well.

Now tell me, if I buy all your company shares from you, how does that add to production ?


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## Value Collector (13 March 2018)

SirRumpole said:


> Really, yours is just a rhetorical argument, and all this stuff about "business owners are the only ones who are productive" is so much ideology that has little relevance to the real economy. You probably learned it in Capitalism 101, but that doesn't mean its a model for how things really work.




when I say "productive groups" I am talking about the groups producing actual goods and services that enter the market where they can be purchased, you know the Bread, cars, electricity etc we all need to live, anyone not involved in bringing these things to market in my example I have called "unproductive" because they aren't producing anything



> Dole "bludgers" and retirees are two different things.




the effect is they say for economic purposes, they are consuming without producing.





> Now tell me, if I buy all your company shares from you, how does that add to production ?




It doesn't add to production, but now you are the producer and I am not, I am now unproductive, unless I take that cash you gave me and invest it else where.

its the same if I owned a farm, and you bought it off me, I was the producer of corn, but now I am not, you are. but I now have a pile of cash instead of a farm, so I can go and buy a factory, or I can just spend the money which are really just my savings.


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## bellenuit (13 March 2018)

I think if you are looking at a UBI, then you should look at reducing the work week in conjunction with it. One major rational for introducing a UBI is the assumption that automation will drive people out of work and in order for them to survive, a UBI may be more efficient than many separate social welfare programs (dole, pension, family allowance). However, if the economy can only sustain 50% of the working population (working full time @ 8 hours/day), then it would be far better to have the working day set to 4 or 5 hours and bring employment back towards the 100% mark.

From a social perspective, it is better that the workload be shared, rather than being burdened on a few (who will relatively be very well off). Having practical work skills spread over the population allows the work day to be expanded without much effort if circumstances change and avoids the social ills that accompany high unemployment.


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## Value Collector (13 March 2018)

bellenuit said:


> I think if you are looking at a UBI, then you should look at reducing the work week in conjunction with it. One major rational for introducing a UBI is the assumption that automation will drive people out of work and in order for them to survive, a UBI may be more efficient than many separate social welfare programs (dole, pension, family allowance). However, if the economy can only sustain 50% of the working population (working full time @ 8 hours/day), then it would be far better to have the working day set to 4 or 5 hours and bring employment back towards the 100% mark.
> 
> From a social perspective, it is better that the workload be shared, rather than being burdened on a few (who will relatively be very well off). Having practical work skills spread over the population allows the work day to be expanded without much effort if circumstances change and avoids the social ills that accompany high unemployment.




yeah, lowering retirement age, reducing work week etc are all possible.

The one problem with you will come up against though is the remaining jobs probably will be skilled jobs.

The first jobs to start going will be the jobs that involve fewer skill sets, So we can't just tell an unskilled factory worker or truck driver to go and do split shifts with the local dentist.

The work force will adapted over time, but I feel people entering the work force now at the unskilled end, will probably be obsolete before they hit 65, and are unlikely to take up some high skill job later in life.



> From a social perspective, it is better that the workload be shared, rather than being burdened on a few (who will relatively be very well off).




the BUI helps with that, it would allow people to just work part time if they chose.


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## Tisme (13 March 2018)

SirRumpole said:


> Indeed so, they are suffering because of low consumer confidence due to stagnant wages.
> 
> Maybe all their shareholders should get out there and start buying stuff from "their" company and save it going broke.




I might also point out that there is more than one coffee shop competing for the $5, here and overseas.


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## Humid (13 March 2018)

Yeah 


Tisme said:


> I might also point out that there is more than one coffee shop competing for the $5, here and overseas.



and they’re all going broke,Michels,Doughnut time thank god they abolished penalty rates


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## SirRumpole (13 March 2018)

Value Collector said:


> its the same if I owned a farm, and you bought it off me, I was the producer of corn, but now I am not, you are. but I now have a pile of cash instead of a farm, so I can go and buy a factory, or I can just spend the money which are really just my savings.




Yes, but what you can spend I now cannot, so its a zero sum game.


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## luutzu (13 March 2018)

SirRumpole said:


> I don't think your economics are quite complete, you only look on the production side.
> 
> Anyone who consumes goods and services and thus creates a demand for them, provides the opportunity for others to satisfy that demand by producing the goods or services and therefore creating businesses and employment.
> 
> If we want to encourage new businesses and generate employment, then giving pensioners more spending power and creating demand would be a good place to start.




That's a good point.


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## Tisme (14 March 2018)

Humid said:


> Yeah
> 
> and they’re all going broke,Michels,Doughnut time thank god they abolished penalty rates




Yes penalty rates being abolished resulted in giant crowds at the cafe' gates and huge pay packets for the workers because of profit share. 

Who would have thought such a simple piece of legislation would have had such a huge impact on GDP, national debt, productivity and international glasnost. Good to see born to rule economic managers are focusing on the big things that matter.


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## Value Collector (14 March 2018)

SirRumpole said:


> Yes, but what you can spend I now cannot, so its a zero sum game.



Yeah, what’s your point?

How ever I could take my money from selling the farm and start another farm, hence increasing the production of the economy.

It takes investment to produce goods and services, especially in an automated world, as industry becomes less labour intensive, it becomes more capital intensive, this will require a lot of capital to be invested.

The people investing that capital are essentially he producers, they are responsible all the output of their assets, 

Anyone not invested in the system or supplying the limited amount of labour still required isn’t adding to the system, they are a drag on the system, 

But as I said that doesn’t matter, as long as after tax the capital owners are still earning a reasonable return on their their investment we will all do well.

If he tax laws make investment not worth it, our standard of living for everyone will fall


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## SirRumpole (14 March 2018)

Value Collector said:


> Yeah, what’s your point?
> 
> How ever I could take my money from selling the farm and start another farm, hence increasing the production of the economy.




Sure but I could have taken my money and started a farm instead of buying your shares.

Money in = money out, therefore no additional economic benefit.

So the basic point is that buying existing shares adds nothing to the economy, it just transfers wealth from one point to another.

Unless you contribute to the initial capital of a company then economically you are useless.


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## Value Collector (14 March 2018)

SirRumpole said:


> Sure but I could have taken my money and started a farm instead of buying your shares.
> 
> .



 Yes you could, I still don’t see your point.

If you go and start a farm, you will be contributing additional goods to the market, increasing the number of people that can be fed and lowering the prices of food.

You would be contributing real value, a pensioner that just eats your food isn’t contributing anything.

Once you have started your farm, and it’s proftable you could sell it to another investor, that investor then becomes the producer, or you could sell 10,000 shares in the farm to a 1000 different people, and they will become “shareholders” and now they are the producers.


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## SirRumpole (14 March 2018)

Value Collector said:


> If you go and start a farm, you will be contributing additional goods to the market, increasing the number of people that can be fed and lowering the prices of food.




Yes, but just buying and selling existing shares is not starting a farm, it's just transferring ownership of an existing farm, so it's not achieving anything economically.


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## Value Collector (14 March 2018)

SirRumpole said:


> Yes, but just buying and selling existing shares is not starting a farm, it's just transferring ownership of an existing farm, so it's not achieving anything economically.




The fact is that the company or farm exists, and needs constant reinvestment to keep it operating.

But do you think people would start businesses or farms, and constantly reinvest earnings to grow them if they didn’t think it was possible they could sell out one day?

If founders or even shareholders, didn’t believe that in 10years they would be able to sell their business or shares, they would be far less likely to constantly reinvest the earnings of the company to grow and expand or even maintain their business.

All the shares I own retain large amounts of earnings and reinvest them to expand, if I wasn’t sure that one day I could sell these shares and take those years of retained earnings as a capital gain, I wouldn’t want management to be investing those earnings back into the business for growth, I would want to get bigger dividends instead.

So yes shareholders are contributing constantly, via reinvested earnings which they could have taken as dividends, but instead the board decided to retain and invest.


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## Tisme (14 March 2018)

Govt should be 'printing money' to meet demand of goods and services, with all the caveats that go with trying to avoid killing the economy.

If nobody is doing anything and living of subsidies and welfare,  then the goods better be worth it and we better own the means of production.


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## Value Collector (14 March 2018)

Tisme said:


> Govt should be 'printing money' to meet demand of goods and services, with all the caveats that go with trying to avoid killing the economy.
> 
> If nobody is doing anything and living of subsidies and welfare,  then the goods better be worth it and we better own the means of production.






If there was 5 of us in on an island, and there were 5 apples for sale and each of us had $1, the apples would be worth $1 each, simply printing more dollars would not increase the number of available apples, if we all got given a $5 note, the price of the apples would be big up to $5 each.

If only 4 of us had $1 coins, we would get 1.25 apples each, and the pensioner without a coin would be hungry, But if the government printed of a fresh coin for the pensioner, we would all have $1 to spend, but were wouldn't get 1.25 apples each, we would only get 1 apple each, so printing the $1 coin for the pensioner was actually a hidden tax on us, we all lost purchasing power, even though we don't feel like we lost money at first.

Printing the $1 coin for the pensioner is exactly the same as forcing us to each give him 20cents, if we each gave him 20cents, the price of apples would drop to 80cents each, but because we only have 80cents to spend we can still only buy 1 apple, not the 1.25 apples we would have gotten had the pensioner not been drawing from the system.

Printing money doesn't produce more goods and services, it just creates more money, so it lowers the value of existing money, raising prices for everyone.

So paying pensions from printed money would still be a form of taxation. Sure we would pay as much tax, so we would have more dollars in our pocket, but prices would rise as the dollars in our pocket went down in value.


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## Wysiwyg (14 March 2018)

Be interesting to know what percentage of the working population (income producers) pays for the not working population that live off other peoples income that has been redistributed by the gov. Like, some people believe it is their god given right to be supported by the gov.


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## Value Collector (14 March 2018)

Wysiwyg said:


> Be interesting to know what percentage of the working population (income producers) pays for the not working population that live off other peoples income that has been redistributed by the gov.




If you are just counting Labour, its about 50%.

But if you include capital providers, (because it takes both labour and capital to produce goods and services) it is higher.

But, exact numbers are muddy.

Because some workers still require a level of government assistance, (eg. partime workers and single parents etc)

Same with some capital providers ( eg. part pensions etc)

also, alot of people both capital providers and labour providers (eg working people that have other investments)

--------------------------

One trend is clear though, over the next 50 years the Labour component of production will be falling while the capital intensity increases, So the scope for people to live from their labour will be reducing while more and more opportunities to allocate capital productively appear.

So we should be training kids to think about both sides (capital and labour), rather than just asking which jobs they want when they get older.


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## SirRumpole (14 March 2018)

Value Collector said:


> So we should be training kids to think about both sides (capital and labour), rather than just asking which jobs they want when they get older.




Well yeah, but where are they going to get their capital from ?


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## Value Collector (14 March 2018)

Watch the first couple of minutes of this video.

It shows Fortescue Metals using Autonomous trucks in the Pilbara, they are now being rolled out across the Pilbara.

Each Truck used to require 4 Truck drivers to run over a 24 hour period.

Traditionally mining output was a combination of hardworking miners, and the capital investment of the investors providing all the equipment.

But as you can see more and more the investors will be able to do more with their equipment while requiring less workers.

This is what I mean when I say capital providers are productive, as a share holder my shares represent a 0.004%  ownership interest in all of Fortescue's mining equipment and other assets, so I will share in the out put, along with the other capital and labour providers and government.

My investment is generating production for the economy, and I will get some of the after tax production to spend, so my spending isn't taking anything away from others, however a person who isn't adding anything into the pool of products and services via their labour or capital, is subtracting from the pie while doing nothing to grow the pie, they are living off the labour and investments of others.


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## Value Collector (14 March 2018)

SirRumpole said:


> Well yeah, but where are they going to get their capital from ?




Working, there will still be jobs for a long time.

Or, savings from their BUI, as I said I wouldn't want it to be means tested, I would want it to be possible for people to save some and grow their investments without fear of losing the BUI, otherwise we would forever have two classes of people 1, the super rich that own everything, and 2, the people living on the BUI, who every time they build a little wealth have to eat it because they lose the BUI.


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## luutzu (14 March 2018)

Wysiwyg said:


> Be interesting to know what percentage of the working population (income producers) pays for the not working population that live off other peoples income that has been redistributed by the gov. Like, some people believe it is their god given right to be supported by the gov.




I have a feeling you're not talking about corporate welfare receipients but those lazy druggo and wino on welfare.

Which group of Aussies got the most from gov't last year? The poor on welfare or businesses and corporations getting that tax cut?

Maybe those on welfare aren't a drain on the system, they are drained by the system.


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## luutzu (14 March 2018)

Value Collector said:


> Watch the first couple of minutes of this video.
> 
> It shows Fortescue Metals using Autonomous trucks in the Pilbara, they are now being rolled out across the Pilbara.
> 
> ...





Your definition of what constitute a productive person/asset is a bit too biased.

It's like saying that a good book in the public library is useless if it's read and enjoyed by borrowers but become useful and productive when Disney butchered it into trade marketable movies and toys.

With investing one's capital into enterprises... unless you invest your capital at the very beginning of an enterprise, you can't honestly say you're being productive with the capital by trading it for ownership on the secondary market.

And if it does, then you're not really following the Buffet/Graham (and all other capitalists and corporate titans) way of investing. 

Why?

Investors who buy under-valued assets are taking advantage of those who sell out for the cheap. They take on no risk and do not at all sweat or have sleepless nights worrying about where the next job or the next failure might hit. That's just 'intelligent investing" by definition. 

To then own that asset purchased at a bargain price, receiving dividends or having it reinvested... that's enjoying the fruit of what was other people's investment.

You can argue that it was bought fair and square, that the other investor sold at what was fair value to them. That's a different story. That story is not about an astute, or lucky, investor buying on the cheap for kindness, humanity and being productive. 

Now, if investors who bought into on the cheap then seriously see themselves as owners being productive and taking risks to creator goods, services and provide jobs etc., the'd then stick around and contribute further capital, further reinvest their earnings until the administrator is called in or they're ont he cover of some fancy magazine. 

Most investors, myself included... we buy when it's good, we get the heck out when it's looking bad, or when there's better opportunity elsewhere. 

It's a way we try to make money, it's hardly being productive or enterprising with our capital.


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## SirRumpole (14 March 2018)

Value Collector said:


> Working, there will still be jobs for a long time.




Even if there are jobs around the cost of living in the major cities these days is so high that it very hard to pay rent or mortgage,groceries, power, car costs insurance and the rest. 

But with compulsory superannuation. most people are already investors so I doubt that there will be much incentive for people to go it alone unless they are independently wealthy.


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## Value Collector (14 March 2018)

luutzu said:


> Your definition of what constitute a productive person/asset is a bit too biased.
> 
> .




When I say something is productive, I am not making a quality judgement on the person or enterprise, just stating a fact that they are producing a good or a service.




> With investing one's capital into enterprises... unless you invest your capital at the very beginning of an enterprise, you can't honestly say you're being productive with the capital by trading it for ownership on the secondary market.




Why not?

If investors weren't constantly allowing their earnings to be retained to grow or maintain the company assets, it's out put wouldn't grow and would instead decline.

Every time Fortescue metals Buys a new truck, ship or spends money exploring for new mineral deposits, thats new capital being put to work that could have been given to share holders as dividends.

share holders could vote to wind down the company, and return all cashflow to share holders as the mines deplete and the equipment wears out, but we don't do that, instead we are reinvesting cash flow back into new investments all the time.







> Investors who buy under-valued assets are taking advantage of those who sell out for the cheap. They take on no risk and do not at all sweat or have sleepless nights worrying about where the next job or the next failure might hit. That's just 'intelligent investing" by definition.




If a capital owner wants to sell out to another capital owner at a "cheap price" thats his decision, who knows he might be right and the new investor may be over paying.



> To then own that asset purchased at a bargain price, receiving dividends or having it reinvested... that's enjoying the fruit of what was other people's investment.




except you paid them out in cash for their investment, you basically replaced the capital they had invested, with your own.

If it wasn't possible to sell shares directly to other investors, companies would have to pay out investors out of the companies balance sheet when they decided to leave.

Shares would become like bonds, claimable directly against the companies balance sheet at certain times.





> Now, if investors who bought into on the cheap then seriously see themselves as owners being productive and taking risks to creator goods, services and provide jobs etc., the'd then stick around and contribute further capital, further reinvest their earnings until the administrator is called in or they're ont he cover of some fancy magazine.




They do, look at Warren Buffet for example, bought $1Billion of Coca Cola in the 80's and never sold a single share, Over that time coca has retained Billions of dollars in profit, during buffets holding period more than $1Billion of earnings have been retained on his shares alone.

So during his holding period, earnings that belong to him have been retained at coca cola that outweigh his $1Billion that he paid for it in the first place.



> Most investors, myself included... we buy when it's good, we get the heck out when it's looking bad, or when there's better opportunity elsewhere.




Now, if you new you weren't going to have a secondary market to sell the stock into, would you be ok with the company not paying dividends and instead using the cash grow and expand capacity.



> It's a way we try to make money, it's hardly being productive or enterprising with our capital




Regardless of how much you trade it, over its life the company will make the same profit, all you are trying to do by buying and selling is to try and game the system so you get a bigger piece of the companies earnings, at the expense of the other capital holders, the capital you are trading though is still producing all the time.

The fact that you are playing pass the parcel with the companies equity, doesn't change the fact the the equity is productive.


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## Value Collector (14 March 2018)

SirRumpole said:


> But with compulsory superannuation. most people are already investors so I doubt that there will be much incentive for people to go it alone unless they are independently wealthy.




Thats their choice though, if they don't want to improve their situation they don't have to.

I just want a system where its possible, doesn't have to be mandatory.

----------------
Even with super, you should still be teaching your kids about investing, it amazes me that most people can leave high school, and even university, and not be able to describe what a share is, yet we expect them to be able to make good decisions on managing their super.


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## Wysiwyg (14 March 2018)

luutzu said:


> I have a feeling you're not talking about corporate welfare receipients but those lazy druggo and wino on welfare.



Anyone who doesn't pay their way in life, rather lives off the fruits of other people's labour.


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## So_Cynical (14 March 2018)

I like the idea, 164 billion in welfare spending in the last budget = almost 7000 dollars for very Australian (24 million) throw in the defense budget of 30 B and that's petty much 10K each.

http://www.abc.net.au/news/story-st...492204#spending/breakdown/2018/other-purposes
~


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## luutzu (14 March 2018)

Wysiwyg said:


> Anyone who doesn't pay their way in life, rather lives off the fruits of other people's labour.




There are many ways people pay, or not pay, than just with money. 

Some paid more than their share a long time ago, and are just getting some help because they can no longer pay anymore. Some never paid anything but appear to be doing so. 

For example, a disabled war vet. Fought for their country, willing to sacrifice everything but only paid with a few body parts. Soo... they're a drain on society now? Maybe without them, whatever freedom, national independence and all that trade wouldn't be possible. 

Or a sickly, and retired, road crew. Building roads and bridges and now a drain on society? 

Or teachers... getting crappy paid to train tomorrow's national brain trust. Are their productivity around the pay they receive?

Or stay at home parents. A drain on society because parenting is easy and no productive people stay at home raising their kids? 


I've read business biographies, I've studied annual reports and read those investor presentations. 

We're blaming the wrong group of people for being parasitic. 

Often, it's those who make the most money that are the most parasitic. The idea of a wise and intelligent, hard working and caring entrepreneur risking it all to make the world great, and did it so well that the world reward them with money... That's always all bs in 99.99999% of cases.

I'm reading a bio on J Paul Getty. Guess who funded 1/3rd the cost of his supertankers? The French gov't through subsidies. Guess who funded the other 25%... Not bloody fellow entrepreneurs. 

It's gotten worst since.


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## Value Collector (14 March 2018)

luutzu said:


> There are many ways people pay, or not pay, than just with money.
> 
> Some paid more than their share a long time ago, and are just getting some help because they can no longer pay anymore. Some never paid anything but appear to be doing so.
> 
> ...




I think you are getting away from the argument originally being made, and taking it to emotionally.

When I have said some one is unproductive, I am not making a quality judgement on that person, I am not saying they have never been productive, I am not saying they are bad people, I am not saying we shouldn't look after them, I am not even saying that we don't owe them anything.

All I am saying is that as it stands right now, they aren't currently adding anything to to economy, and anything the take out, is a drag on the economy (and I am not saying drag is bad either, its just a fact, like wind resistance or friction, I am not using the word drag in a derogatory way).


--------------------------------------


Do you at least agree that it takes both Labour and capital, to produce economic output in the form of goods and services?

If you agree that it does take labour and capital, then you should be able to see that the people providing that capital whether they be equity owners, bond holders, bank depositors etc etc, are contributing to the economic output of the various businesses they are involved in.

So if we are going to define people as either productive or unproductive, the people providing the labour and capital would be in the productive group and the people who aren't either contributing labour or capital would be in the unproductive group. (again not a derogatory term, just a fact)

trust me, if the investors in Fortescue took the enormous digger off the miner, and instead handed him a hand shovel, you can bet his hourly output of Iron ore would drop to almost nothing.

So as a miner sits in his air-conditioned cab of his digger dumping 10 tonnes of Iron ore into the dump truck every minute, just remember not all that productivity has come about simply from his labour alone, its a combination of labour and capital.

and in the future when its a robot instead of a human operator, you could say all the production is a result of capital alone.


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## SirRumpole (14 March 2018)

Value Collector said:


> So if we are going to define people as either productive or unproductive, they people providing the labour and capital would be in the productive group and the people who aren't either contributing labour or capital would be in the unproductive group. (again not a derogatory term, just a fact)




The probem is that once you start labelling people, you stir up an emotional debate that is unproductive and reeks of class warfare.

People may be on the dole because there are simply no jobs out there. In those circumstances some sort of investment in training could be helpful. Your taxes may be required to help get them a job or start a business. If that happens, do you begrudge your taxes being used in that way ? They may then earn some money and buy some of your company's products.

What goes around comes around. The multiplier effect is in action in the economy. Investing $1000 in helping someone off the dole could generate hundreds of thousands in tax paid by that person in their lifetime.

As you once said to me, live and let live bro.


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## moXJO (14 March 2018)

I think we are moving off message via terminology. It's an interesting subject. But a whole lot of system needs to be torn down before its going to happen. 

Would education suffer as a result? 
Why learn if there are no jobs?


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## Value Collector (14 March 2018)

SirRumpole said:


> The probem is that once you start labelling people, you stir up an emotional debate that is unproductive and reeks of class warfare.




nothing I have said is an emotional debate, if you or lutz got offended because you thought when I used the word unproductive I was being derogatory, I am sorry, But I am just using it for lack of a better word, I am not making moral judgements just defining whether someones current actions of either their labour or capital is generating goods and services or not.



> People may be on the dole because there are simply no jobs out there. In those circumstances some sort of investment in training could be helpful. Your taxes may be required to help get them a job or start a business. If that happens, do you begrudge your taxes being used in that way ? They may then earn some money and buy some of your company's products.




I have said I am pro taxation, pro pensions, pro BUI (later when its required), pro dole payments.






> What goes around comes around. The multiplier effect is in action in the economy. Investing $1000 in helping someone off the dole could generate hundreds of thousands in tax paid by that person in their lifetime.




not disputing that, but this discussion is mainly about what to do when there are no longer enough jobs, because the Labour/capital model has reached a tipping point and human labour is not in high demand anymore.



> As you once said to me, live and let live bro.




Again you seem to be portraying me as if I am against Welfare or the BUI, I am not.

I think we agree on everything here except one point, which was that you claimed that giving pensioners money to spend some how increased production.

My point is not that we should avoid giving pensioners money, my point is just that it is an economic drag on the economy, the goods and services they consume are being funded by the productive economy at the expense of those that produce the goods and strives either by labour or capital.

Sure some people benefit by the spending of pensioners, but only at the expense of the other producers who helped fund the pension, but didn't get any of the extra business.


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## Value Collector (14 March 2018)

moXJO said:


> Would education suffer as a result?




people would probably have more time to spend on education and the arts, sports.

there is plenty of reason to learn, eg becoming a better investor, musician, scientist, athlete, designer, artist.

eg, I don't think Stephen Hawking studied to simply earn money, people are curious alot of people want to learn for many non monetary reasons.


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## moXJO (14 March 2018)

Value Collector said:


> .
> 
> there is plenty of reason to learn, eg becoming a better investor, musician, scientist, athlete, designer, artist.
> 
> eg, I don't think Stephen Hawking studied to simply earn money, people are curious alot of people want to learn for many non monetary reasons.




I  love learning new things. Honestly I love the idea of being able to have more free time to do it. 
But university is setup as a money making machine. No jobs and that collapses. Who is going to pay the ridiculous fees?

 It's also hard enough keeping kids in class at public schools. There ain't many that love learning


----------



## SirRumpole (14 March 2018)

Value Collector said:


> Sure some people benefit by the spending of pensioners, but only at the expense of the other producers who helped fund the pension, but didn't get any of the extra business.




There are many ways to spend tax money. It's a known economic fact that if you give low income people a wage or pension rise they will spend most of it in the economy because their needs and wants are not satisfied. If you give companies or "productive" high wealth individuals the same amount of money they are less likely to spend it because they already have what they want and the extra is a pittance to them.

So for the purposes of simulating the economy, giving more to low wealth individuals is far more effective than giving the same amount to high wealth people.


----------



## luutzu (14 March 2018)

Value Collector said:


> I think you are getting away from the argument originally being made, and taking it to emotionally.
> 
> When I have said some one is unproductive, I am not making a quality judgement on that person, I am not saying they have never been productive, I am not saying they are bad people, I am not saying we shouldn't look after them, I am not even saying that we don't owe them anything.
> 
> ...




I don't think I was being emotional, just factual. 

Your model of production is an accountant's, economist's simplified version of reality. i.e. They ignore every other "extraneous" and "immeasurable" or "irrelevant" factors and reduce their variables to something measurable - money.

While isolating certain variables and making certain assumptions to get to the bottom line might be good in carrying out experiments, proving or making conclusions on certain hypotheses... The fact that it ignores most other factors mean it's simplified, and as simplification goes, often inaccurate or incomplete.

I think you're a decent guy and wasn't suggesting that you think this or that of people. Was trying to say that even those on welfare and aren't currently producing income are not at all "unproductive" and non-contributing member of society.

For one, they provide source material for certain press baron, radio talk back, and politicians to use as punching bags. That's productive and a rich source of material.

Second, they might very well do cash in hand jobs while receiving benefits. That takes creativity, talent, hard work and providing work for cheaper rate than they would otherwise be if they have a proper tax file number and bank account.

Then there's the jobs they create. CentreLink staff are hired, paid, spent those pays, get taxed etc.

There's the demand from the cash etc. etc.

---------------

Bringing us to your Fortescue example...

Would Twiggy and his investors spend cash to create mining jobs plundering the earth if there is no demand for the minerals they extracted?

Would they still invest if there are no gov't subsidies and other sweetheart deals provided? 
Would they still invest if, say, the taxpayers representative does not push the case for trade, have the arms and enforcement resources to make sure contracts and terms of payment are met?

It's a whole eco-system, not simply investors putting in the cash to create jobs. 

-------

As to capital being invested to have excavators, then soon robotics. 

It's not capital that produced those goods, it's labour. Yes, I know cash was used to pay the wages for the labour... but cash is just a mean of exchange one type of labour for another type.

You can use barter or crypto currency or sexual favours or "thank yous" and "IOUs" if those are widely accepted. What you cannot exchange or remove from the ingredient that produce all those goods are, ultimately, labour.

From the visionary to the engineers to the welder, the painter, the cleaner and mechanics... all that came to produce anything are labour.

What capital and capitalist does is simply providing an easier mean of trading labour for other product/services from labour. 

And because labour are reduced to dollars and cents, it removed the sweat and pain a labourer put out to produce the goods/services... and thereby allow their effort to be exploited and transferred, compound one on top of another. 

Put another way, a capitalist can put a pallet of dollars and nobody cares to be paid by it... nothing gets done. 

As a VNese joke goes, I'm not a greedy person. I do not care for money. All I want in life is to have everything I wanted and that's it. 

So when we go to the shops and pay for things with a wave of the card, it's not money that pay for it, it was our labour that produced this thing call money that's reduced a few digits on a database.


----------



## luutzu (14 March 2018)

SirRumpole said:


> There are many ways to spend tax money. It's a known economic fact that if you give low income people a wage or pension rise they will spend most of it in the economy because their needs and wants are not satisfied. If you give companies or "productive" high wealth individuals the same amount of money they are less likely to spend it because they already have what they want and the extra is a pittance to them.
> 
> So for the purposes of simulating the economy, giving more to low wealth individuals is far more effective than giving the same amount to high wealth people.




It's also a known fact that giving rich people and corporation more money increases financial speculation, ballooning asset bubbles and other catastrophes.


----------



## sptrawler (14 March 2018)

SirRumpole said:


> There are many ways to spend tax money. It's a known economic fact that if you give low income people a wage or pension rise they will spend most of it in the economy because their needs and wants are not satisfied. If you give companies or "productive" high wealth individuals the same amount of money they are less likely to spend it because they already have what they want and the extra is a pittance to them.
> 
> So for the purposes of simulating the economy, giving more to low wealth individuals is far more effective than giving the same amount to high wealth people.




It is also an economic fact, if you give low income people more money, they usually spend it on cigarettes, alcohol, gambling and fast food, but I guess it is not politically correct to say so.

My appologies, I'll take myself out the back and give myself a deserved flogging, for saying anything derogatory against the blessed lovely members of society. That find themselves in unfortunate financial difficulty, through no fault of their own.


----------



## SirRumpole (14 March 2018)

sptrawler said:


> It is also an economic fact, if you give low income people more money, they usually spend it on cigarettes, alcohol, gambling and fast food, but I guess it is not politically correct to say so.




You have something against the alcohol, tobacco, gambling and fast food industries ?

They employ lots of people you know.


----------



## luutzu (14 March 2018)

sptrawler said:


> It is also an economic fact, if you give low income people more money, they usually spend it on cigarettes, alcohol, gambling and fast food, but I guess it is not politically correct to say so.
> 
> My appologies, I'll take myself out the back and give myself a deserved flogging, for saying anything derogatory against the blessed lovely members of society. That find themselves in unfortunate financial difficulty, through no fault of their own.




No they don't. That would ruin their limousine and dirty their fine arts collection. 

Why would the government pamper the poor? Seriously. Why? They're poor and poor people have no money they can donate to your campaign or buy your consultancy services after your public service. 

Big Brother has deep pockets. So if they're really pampering the poor, they wouldn't be poor for long. 

Just take a look at the last global bail outs. Were the working slobs being bailed out or the big banks and corporations? 

Or bankruptcy law... can individuals in Australia declare themselves bankrupt when they are bankrupt? Nope. Companies, i.e. shareholders, can. 

So if there's a property crash in Australia like that of the US back ten years ago, private investors would go negative equity and owe that debt for life. Companies investing in properties can simply go bankrupt and creditors will either suck it up or be bailed out by the gov't.


----------



## luutzu (14 March 2018)

SirRumpole said:


> You have something against the alcohol, tobacco, gambling and fast food industries ?
> 
> They employ lots of people you know.




Dam right. Who's the job creators now.


----------



## sptrawler (14 March 2018)

luutzu said:


> No they don't. That would ruin their limousine and dirty their fine arts collection.
> 
> Why would the government pamper the poor? Seriously. Why? They're poor and poor people have no money they can donate to your campaign or buy your consultancy services after your public service.
> 
> ...




The sad fact is, someone is paying tax to fund it, you think it is the poor which is a noble thought.
I love your outlook.


----------



## luutzu (14 March 2018)

sptrawler said:


> The sad fact is, someone is paying tax to fund it, you think it is the poor which is a noble thought.
> I love your outlook.




Not saying that there are no welfare cheats or lazy people on the welfare system. But just because there are some, or whatever number is "too much", it does not mean they're all like that. 

So put extra surveillance or think harder at the policy level, but to imply that it's better that some honest poor be starved than to have most dishonest poor abuse the state larges... That doesn't sound Australian.


As to tax payers having to fund it. Well, all taxpayers fund everything the gov't does. I'd rather the taxdollars goes towards the poor and desperate, or those desperate enough to lie and cheat for an extra couple hundreds a week to make ends meet... 

that is better than having tax dollars going towards funding corporate tax cuts, negative gearing for "investors" who openly go into bad property investments knowing they're losing money but are fine with it because their tax obligation will be reduced to zero... 

In the same vein, everyone of us are receiving state welfare. Just that beside those from CentreLink paying to the poor, unemployed and pensioners, they're not called welfare but by other names.


----------



## sptrawler (14 March 2018)

luutzu said:


> So put extra surveillance or think harder at the policy level, but to imply that it's better that some honest poor be starved than to have most dishonest poor abuse the state larges... That doesn't sound Australian.
> 
> 
> As to tax payers having to fund it. Well, all taxpayers fund everything the gov't does. I'd rather the taxdollars goes towards the poor and desperate, or those desperate enough to lie and cheat for an extra couple hundreds a week to make ends meet...
> ...




That's easy, just put the tax scales back up, top rate 60%, next rate 47%, bottom rate 30%. That's about what the scales used to be, from memory.

That should fund the poor.

There is a few reasons, able bodied young people can't work.
They either don't want to, or have family issues that means they have to be carers.
The fact they don't want to go bush, for a job doesn't cut it, years ago people went bush without the modern convenience of air conditioning.
Keeping finding reasons, to allow young people to not find a job, is not helping them or anyone else. IMO


----------



## luutzu (14 March 2018)

sptrawler said:


> That's easy, just put the tax scales back up, top rate 60%, next rate 47%, bottom rate 30%. That's about what the scales used to be, from memory.
> 
> That should fund the poor.




Or just create industries at home; not incentivise offshoring of jobs.

Not take the state treasury and hand it over to corporation through loopholes, "security" spending and other white elephant projects.

Not privatise public utilities so that the cost of living can be somewhat bearable by the average folks.

Fund public schools, pay teachers better so they don't have to worry about teaching kids and paying their mortgage at the same time.

Despite what we're told, most on welfare do not like being on it. They'd rather have businesses hiring them for work they know, or can be re/trained do.


But of course it's all a dream. Full employment is not part of economic policy. Greenspan accidentally blurted that out when he forgot he was on camera, that or doesn't care because it's so obvious.

You can't permit full employment because then there won't be any competition among the plebs to work more for less. 

You simply shouldn't train them with skills that could enable them to adapt to future workplace changes. That would cost too much, they would demand too much and all you need is someone to do one part of many on a production line. 

This way, you get bang for your buck within 2 years, they get to work for about 10 to 20 then either win a lottery, married well, go back to school or go work at Bunnings and Maccas. 

You probably think I'm making all these up. But man, what do you think the guys at those G8, G20 and "free trade" negotiation meet up to do?

Talk about how best to serve the working slobs and beggars on the other side of the track or what their masters want.


----------



## sptrawler (14 March 2018)

luutzu said:


> Or just create industries at home; not incentivise offshoring of jobs.
> 
> Not take the state treasury and hand it over to corporation through loopholes, "security" spending and other white elephant projects.
> 
> ...




So what is the answer?


----------



## luutzu (14 March 2018)

sptrawler said:


> That's easy, just put the tax scales back up, top rate 60%, next rate 47%, bottom rate 30%. That's about what the scales used to be, from memory.
> 
> That should fund the poor.
> 
> ...




Jobs are over-rated. 

A country would do better if it doesn't force it young to get a job so early in life.

Most jobs need, at most, a month's basic training and the rest you learn on the job. And yes, that includes university-qualified jobs. Maybe not medicine and the likes obviously. 

If a young person is a bum after HS but are not made to feel like a useless parasite, they'd think things through, wonder about the nature of the universe, study crap they would never use, think about what they want to do with their live... 

Then, without money they cannot dress well or look good... no early marriage or shot gun wedding; no sense of self-importance and satisfaction with a job on some junior level in industry that, unbeknown to them, will most likely not survive the coming robotic revolution. 

At the cost of whatever youth allowance is nowadays, $300 a fortnight?... you know how interesting that lazy azz is as a person?

I know plenty of somewhat smart young people who's moderately successful... and just about all of them are boring and up themselves as heck. I'm sure they think worst of me but ey, I did say they're smart and know certain things.


----------



## sptrawler (14 March 2018)

luutzu said:


> Jobs are over-rated.
> 
> A country would do better if it doesn't force it young to get a job so early in life.
> 
> ...




Yes, that's nice , but how do you fund this? Try to keep on track.


----------



## luutzu (14 March 2018)

sptrawler said:


> So what is the answer?




Probably de-corporatise the economy. Don't permit large concentration of wealth as it always lead to concentration of power.

Encourage local industries rather than push global trade in all things. That's not to say have a trade war or build some stupid wall and bar immigration.

When certain industries are more beneficial if there's a large and well funded entity is needed to service it, let the gov't own and manage it. That will enable trade between nations but ensure local, small business to survive and thrive.

Small businesses often source their labour and material locally; They do not have enough cash to influence politician; they do not have enough resources to monopolise and push out of business similar products using similar but varied raw material... hence, ecological diversity and survival; no need to waste money on long distant transportation of useless stuff like exotic fruits or out of season apples and stupid Disney toys.

See what a few years of Youth Allowance benefit create?  A freakin know it all.


----------



## luutzu (14 March 2018)

sptrawler said:


> Yes, that's nice , but how do you fund this? Try to keep on track.




What's a few thousands a pimply face a year? 

Didn't Turnbull just reduce corporate tax from 30 to 25%? If we're short of cash before at 30%, we're up shiet creek now with a few bucks less we're able to collect. 

But we seem to be doing alright... maybe it'd be a lot better if it weren't for those meddling welfare bums?


----------



## sptrawler (14 March 2018)

luutzu said:


> Probably de-corporatise the economy. Don't permit large concentration of wealth as it always lead to concentration of power.
> 
> Encourage local industries rather than push global trade in all things. That's not to say have a trade war or build some stupid wall and bar immigration.
> 
> ...




Wow that's enlightening, de corpratise industry, what industry? most are struggling.

Encourage local industry, rather than global trade?
 Well that means servicing Melbourne and Sydney, hope you make a zillion from that and pay tax on it to fund the rest of us.
Nice feel good $hit, but it doesn't pay the welfare bill, does it?


----------



## sptrawler (14 March 2018)

luutzu said:


> What's a few thousands a pimply face a year?
> 
> Didn't Turnbull just reduce corporate tax from 30 to 25%? If we're short of cash before at 30%, we're up shiet creek now with a few bucks less we're able to collect.
> 
> But we seem to be doing alright... maybe it'd be a lot better if it weren't for those meddling welfare bums?



The problem is a few thousand pimply faced, has become most of a generation, it isn't all their fault, but to rob their parents to pay them is a band aid.
Who will pay them, when they grow old?


----------



## luutzu (14 March 2018)

sptrawler said:


> The problem is a few thousand pimply faced, has become most of a generation, it isn't all their fault, but to rob their parents to pay them is a band aid.
> Who will pay them, when they grow old?




They won't be on welfare for the rest of their live. The idea is they'd be more informed and better motivated to advance themselves once they have a year or two to think things through.

Getting a job... anyone can get a job, or start a trade. Most do. Just that if society, through economic and debt pressure, force people to just work or get a job... might end up with disillusioned, unmotivated people doing half-azzed work.

No one win from that battle.


----------



## sptrawler (14 March 2018)

luutzu said:


> They won't be on welfare for the rest of their live. The idea is they'd be more informed and better motivated to advance themselves once they have a year or two to think things through.
> 
> Getting a job... anyone can get a job, or start a trade. Most do. Just that if society, through economic and debt pressure, force people to just work or get a job... might end up with disillusioned, unmotivated people doing half-azzed work.
> 
> No one win from that battle.



Best of luck with that.


----------



## luutzu (14 March 2018)

sptrawler said:


> Wow that's enlightening, de corpratise industry, what industry? most are struggling.
> 
> Encourage local industry, rather than global trade?
> Well that means servicing Melbourne and Sydney, hope you make a zillion from that and pay tax on it to fund the rest of us.
> Nice feel good $hit, but it doesn't pay the welfare bill, does it?




The main reason why there's no local industry and hardly any stable local businesses is because the big global/national monopolies crushes them.


----------



## luutzu (14 March 2018)

sptrawler said:


> Best of luck with that.




Better luck with that than the current approach of specialisation in practically every profession and trade.


----------



## sptrawler (15 March 2018)

luutzu said:


> The main reason why there's no local industry and hardly any stable local businesses is because the big global/national monopolies crushes them.




No the main reason we made cars, was because we were paying the the overseas companies, to employ us.
The reality is we are a VERY SMALL MARKET, so why would you make something here, then export it?
When you can export the raw materials, and then make the consumer product where the market is, and cheap labour is.
It isn't rocket science, what I can't understand, is why people think companies would want to manufacture anything here?
When labour costs are twice those of the U.S and Europe, why would you pay some pleb here twice as much, when you can export the raw materials( which gives you a better return on transport costs).
That is why the Government is screwing the pensioners, because they are an easy target, the resource sector tend to kick back big time.
It is an economy in decline, IMO.
I hope not, but unless someone starts charging the resource companies some tax, the retirees will run out of money to prop up the economy.IMO


----------



## sptrawler (15 March 2018)

The really scary thing is, the only tax saving measure the Politicians are coming up with, is tax the the pensioners and the low income earners.
Now that is scary, when you think about the amount of non replenishing resources, that are being taken out and minimal tax paid.
Then in the same breath the mining companies scream, "we are employing lots of people".
Then in the next breath, replace 200 truck drivers, with GPS driven trucks.
It is about time someone manned up and said, you pay $x per tonne removed.IMO


----------



## Value Collector (15 March 2018)

SirRumpole said:


> There are many ways to spend tax money. It's a known economic fact that if you give low income people a wage or pension rise they will spend most of it in the economy because their needs and wants are not satisfied. If you give companies or "productive" high wealth individuals the same amount of money they are less likely to spend it because they already have what they want and the extra is a pittance to them.
> 
> So for the purposes of simulating the economy, giving more to low wealth individuals is far more effective than giving the same amount to high wealth people.




I don’t think that addresses my point at all.

I haven’t said that poor people wouldn’t spend money if you gave it to them, of course they would.

I am saying simply taking money from one group of people to give to another group of people doesn’t increase the size of the pie, it just divides the pie up differently.

If the government borrowes money and gives it away, that might stimulate activity, but that money needs to be paid back through either taxes or inflation, so the net result is he same, you are just bringing future consumption forward.


----------



## Value Collector (15 March 2018)

sptrawler said:


> No the main reason we made cars, was because we were paying the the overseas companies, to employ us.
> The reality is we are a VERY SMALL MARKET, so why would you make something here, then export it?
> When you can export the raw materials, and then make the consumer product where the market is, and cheap labour is.
> It isn't rocket science, what I can't understand, is why people think companies would want to manufacture anything here?
> ...




A good thing about industry becoming more capital intensive rather than labour intensive is that it reduces the incentive to move factories off shore, 

If the main reason to move is he cost of labour, then replacing labour with robots reduces that need.


----------



## sptrawler (15 March 2018)

Value Collector said:


> A good thing about industry becoming more capital intensive rather than labour intensive is that it reduces the incentive to move factories off shore,
> 
> If the main reason to move is he cost of labour, then replacing labour with robots reduces that need.




You're funny, even your spelling seems computer generated.

Do you have a tesla data cable inserted?


----------



## Value Collector (15 March 2018)

luutzu said:


> I don't think I was being emotional, just factual.
> 
> Your model of production is an accountant's, economist's simplified version of reality. i.e. They ignore every other "extraneous" and "immeasurable" or "irrelevant" factors and reduce their variables to something measurable - money.
> 
> ...





Dude you are all over the place, you are singing the praises of dole cheats adding to the economy by working while collecting the dole, and then trying to trash the people actually investing dollars to produce goods.

Anyway, I am not going to respond to your cynicism any more, it seems everyone is out to rip you off, you are a bit nuts. 

You just seem to see the worst in everything, even when it’s all above board eg, your solar system.


----------



## Value Collector (15 March 2018)

sptrawler said:


> even your spelling seems computer generated.




Typing to fast on this iPhone key pad, plus it’s late.

But don’t you agree, if robots are making everything, why place the factory over seas?


----------



## sptrawler (15 March 2018)

Value Collector said:


> Typing to fast on this iPhone key pad, plus it’s late.
> 
> But don’t you agree, if robots are making everything, why place the factory over seas?



O.K copy that, Roger and out.

Sorry I'm tired, but to answer your question.
There is no way they will build factories here, robots or not.
Because it makes far more sense to fill ships with raw materials, and manufacture where the market is, than build $hit here and try and cram it into ships.
They can fill a ship to 60% capacity, with raw material, then just import the few products need for our small market.
It isn't rocket science it's logistics, the problem is our useless politicians can't get their head around it.
We are too small a market place, with too high a labour cost, to make manufacturing here worthwhile.
That's why the Government has to find anyone with money, to rob, because they are $hit scared of the mining lobby.
But have to perpetuate the myth, that we are a first world economy, to support their pensions and perks. lol


----------



## moXJO (15 March 2018)

We should ramp up food production into asia,  but we are building mines or selling farm land off to overseas already.


----------



## SirRumpole (15 March 2018)

Value Collector said:


> I am saying simply taking money from one group of people to give to another group of people doesn’t increase the size of the pie, it just divides the pie up differently.




And I'm saying that if you take money from those who are less inclined to spend and give it to people who are more inclined to spend then you create demand and keep businesses in business.


----------



## Wysiwyg (15 March 2018)

luutzu said:


> There are many ways people pay, or not pay, than just with money.
> 
> Some paid more than their share a long time ago, and are just getting some help because they can no longer pay anymore. Some never paid anything but appear to be doing so.
> 
> ...



Have you ever known people to make their own life decisions and take responsibility for those decisions? Like having kids they can't afford, going to a war that is not theirs, working forever in a job with low pay or taking a lifelong job that wears out the body (that's me lol)?
I'm surprised you don't need daily blood transfusions for bleeding heart syndrome.


----------



## Wysiwyg (15 March 2018)

moXJO said:


> We should ramp up food production into asia,  but we are building mines or selling farm land off to overseas already.



There are some huge numbers of Asians going to become middle class in the years ahead and to get there they will consume stuff to reflect that status. Food, wine and vacations are some things and I am sure entrepreneurs will find niche markets. Prosperity straight ahead but ideally environmentally conscious.


----------



## luutzu (15 March 2018)

Value Collector said:


> Dude you are all over the place, you are singing the praises of dole cheats adding to the economy by working while collecting the dole, and then trying to trash the people actually investing dollars to produce goods.
> 
> Anyway, I am not going to respond to your cynicism any more, it seems everyone is out to rip you off, you are a bit nuts.
> 
> You just seem to see the worst in everything, even when it’s all above board eg, your solar system.




Dude, I was giving (maybe exaggerated, but not false) example of the uses of dole bludgers to the economy. That's not singing praises of those who cheat or praising those for various reasons need social welfare. 

Everyone is out to take money from everyone else. That's just life. If they can do it legally, that's just life with friends in high places.

Maybe I don't see the worst in everything, just seeing certain things for what they are.

So the energy supplier aren't screwing those who installed solar panels? You serious? 

So that guy my dad knows that switch his solar input to his batteries instead of selling it, he have absolutely no reason to feel cheated? He's just cynical and doesn't believe the brochures. 

My own experience with solar panels... not true either. It's just me being cynical and either don't know anything or just think badly of power companies.


----------



## luutzu (15 March 2018)

Wysiwyg said:


> Have you ever known people to make their own life decisions and take responsibility for those decisions? Like having kids they can't afford, going to a war that is not theirs, working forever in a job with low pay or taking a lifelong job that wears out the body (that's me lol)?
> I'm surprised you don't need daily blood transfusions for bleeding heart syndrome.




It's not bleeding heart liberalism. It's punching up. 

What's with this beating down on the poor and the needy. 

Being in one of the richest countries in the history of the world yet for this or that reason there are still people having to live day to day, or being forced into a position where they would cheat and lie just to afford a home or pay those next bills. 

Not saying that people should not be responsible for their own action and financial position in life... just that in reality, it's not always hard work and brain power that make a person rich or poor. 

Some time those who do no study, abuses drugs and leech off others end up with nothing... some times there are those who sacrificed their own self interest to help others that they end up with nothing.

Sometimes there are those who gain wealth because they worked hard for it; sometime they just screw other people over or cares for nothing and nobody beside that mighty dollar. 

To live in a world where you'd think that those with money are automatically praiseworthy or diligent and good while those who are poor are lazy and parasitic... that's not living in the real world.


----------



## SirRumpole (15 March 2018)

sptrawler said:


> Because it makes far more sense to fill ships with raw materials, and manufacture where the market is, than build $hit here and try and cram it into ships.




A packet of fish I bought. Caught in NZ, processed in China, transported to Australia.

What ?


----------



## luutzu (15 March 2018)

SirRumpole said:


> A packet of fish I bought. Caught in NZ, processed in China, transported to Australia.
> 
> What ?




Chinese trawlers in NZ waters?


----------



## Humid (15 March 2018)

Wysiwyg said:


> Have you ever known people to make their own life decisions and take responsibility for those decisions? Like having kids they can't afford, going to a war that is not theirs, working forever in a job with low pay or taking a lifelong job that wears out the body (that's me lol)?
> I'm surprised you don't need daily blood transfusions for bleeding heart syndrome.




Just imagine the immigration numbers if people didn’t have the kids that they couldn’t afford


----------



## Wysiwyg (15 March 2018)

Humid said:


> Just imagine the immigration numbers if people didn’t have the kids that they couldn’t afford



Immigration is okay if the jobs are here and the immigrants have evolved psychologically. (I.e. no to religious backward looking)


----------



## Tisme (15 March 2018)

luutzu said:


> It's not bleeding heart liberalism. It's punching up.
> 
> What's with this beating down on the poor and the needy.
> 
> ...





The reason the Asian dudes are doing well is because they have recently embraced white anglo western superior ways of doing everything, even if said pale faces never invented anything before it was invented by a mythical race that obviously had no idea how to bring it to market 

When the Asians can afford dole bludgers, then they can be considered a rung up from third world ladder economically, but until they learn the rule of law, parliament, AFL, etc they will always be a seething mass of humanity that lives on the streets and hand to mouth.


----------



## Tisme (15 March 2018)

Humid said:


> Just imagine the immigration numbers if people didn’t have the kids that they couldn’t afford




Which is why the govt subsidises children.


----------



## Wysiwyg (15 March 2018)

Tisme said:


> When the Asians can afford dole bludgers, then they can be considered a rung up from third world ladder economically, but until they learn the rule of law, parliament, AFL, etc they will always be a seething mass of humanity that lives on the streets and hand to mouth.



I thought the trick to a successful economy was to keep the carrot dangling in front of the majority of productive people. If they get within a sniff of the carrot then move it away with various creative measures.


----------



## Humid (15 March 2018)

Wysiwyg said:


> I thought the trick to a successful economy was to keep the carrot dangling in front of the majority of productive people. If they get within a sniff of the carrot then move it away with various creative measures.




They up immigration and you can fight over the carrot


----------



## luutzu (15 March 2018)

Wysiwyg said:


> I thought the trick to a successful economy was to keep the carrot dangling in front of the majority of productive people. If they get within a sniff of the carrot then move it away with various creative measures.




No, that's how you move a stubborn donkey. And that's what you tell press when you kick the widows and orphans off of a few bucks in food and housing: independence, dignity, get a job you parasite etc. etc.


----------



## luutzu (15 March 2018)

Tisme said:


> The reason the Asian dudes are doing well is because they have recently embraced white anglo western superior ways of doing everything, even if said pale faces never invented anything before it was invented by a mythical race that obviously had no idea how to bring it to market




Which ways? The taking all of South China Sea, East China Seas and strategic ports from home to Africa, Australia... That way or the Liberating the poor savages way? The exploiting the poorly educated then give them a safety net (literal and metaphorical) way? 

Ah dam it, you're right. 

You White people are alright. There's only like 20% of the world you didn't take and ruin. And maybe 10% of those were yours to begin with. 



Tisme said:


> When the Asians can afford dole bludgers, then they can be considered a rung up from third world ladder economically, but until they learn the rule of law, parliament, AFL, etc they will always be a seething mass of humanity that lives on the streets and hand to mouth.




Was that your round-about way of saying that a welfare state is a sign of a civilised society? Turning Red or Green there McGee?

Come on now, Foxconn does have safety nets at the second-floor level catching any suicidal workers too sensitive to being paid diddly for those stupid iPhones and gadgets.


----------



## Tisme (16 March 2018)

luutzu said:


> Which ways? The taking all of South China Sea, East China Seas and strategic ports from home to Africa, Australia... That way or the Liberating the poor savages way? The exploiting the poorly educated then give them a safety net (literal and metaphorical) way?
> 
> Ah dam it, you're right.
> 
> ...




Mate you know I'm right, I'm always right.  You're just defending a 20th century myth your forebears had some kind of advanced civilisation before John Bull came knocking on their doors. Sure the Spanish, French, Germans, Portuguese etc were ar4s5oles, but they didn't get properly civilised themselves until the yanks took them over post WW2.


----------



## luutzu (17 March 2018)

Tisme said:


> Mate you know I'm right, I'm always right.  You're just defending a 20th century myth your forebears had some kind of advanced civilisation before John Bull came knocking on their doors. Sure the Spanish, French, Germans, Portuguese etc were ar4s5oles, but they didn't get properly civilised themselves until the yanks took them over post WW2.




Didn't the yank also took over "great" Britain? And I don't just mean the rich yanks buying manors and castles the gentry poms could not longer afford to keep either. 

Didn't they also take all the Pom's colonies and overseas assets.

Yea, all civilisations have its moment feeling all superior and invincible. Then a couple generations of their leaders do something stupid and got a few knocks at the gates from the friendly neighbourhood preacher on a mission from God.


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## Tisme (17 March 2018)

luutzu said:


> Didn't the yank also took over "great" Britain? And I don't just mean the rich yanks buying manors and castles the gentry poms could not longer afford to keep either.
> 
> Didn't they also take all the Pom's colonies and overseas assets.
> 
> Yea, all civilisations have its moment feeling all superior and invincible. Then a couple generations of their leaders do something stupid and got a few knocks at the gates from the friendly neighbourhood preacher on a mission from God.




Some say the the City of London still controls the USofA


----------



## luutzu (17 March 2018)

Tisme said:


> Some say the the City of London still controls the USofA




It look that way to the unobservant eyes because the invaders had made themselves very much at home.

I mean, you rule your new domain by settling there and leave the inhabitants that sense of freedom lest they dig to find where the treasuries really flow to.

Much like the "Chinese" Yuan Dynasty of Kublai Khan in modern-day Beijing controlling all the Khannates; or the Last Emperor of Vietnam ruling IndoChina.


----------



## Wysiwyg (19 March 2018)

WSJ has a video on Basic Income. "Universal Basic Income" a phrase coined by  future-world designer, Elon Musk?


> Mark Zuckerberg, Elon Musk, Richard Branson and other tech titans are promoting the idea of universal basic income, as a way to help citizens weather job disruptions caused by emerging technologies. Canada is giving it a try, with a pilot program that gives participants up to $17,000 annually for three years — no strings attached.



https://www.wsj.com/video/series/mo...upstream/AAF2641C-53F5-4C32-99C9-C0BD8409D7C6


----------



## So_Cynical (19 March 2018)

This really shouldn't be an ideological argument.


----------



## Value Hunter (21 March 2018)

Value Collector, this is what you said "the most important part is that I put 6800 tonnes of iron ore into the economy, so I can then go and take out some bread, rum, petrol or anything else I need, the unit of exchange of the day is less important." 

That is a completely absurd way to look at things. The secondary market in equities adds nothing to productive capacity it merely transfers ownership of assets. Only when shareholders participate in IPOs or secondary market capital raisings (e.g. rights issues, share placements, etc) do they add to the productive capacity of the economy. When you place an order through your broker on the secondary market to buy shares in for example Fortescue Metals and that order gets filled the all that happens is the ownership of those shares get transferred form the seller to you. If you never bought shares in Fortescue metals, somebody else would still own those shares and the company would still have the same amount of shareholders equity and would produce the same amount of iron ore. Likewise if you sell your shares the company will still produce the same amount of Iron Ore. When you buy and sell shares on the secondary market all you are doing is impacting the liquidity and price of the shares, you have zero impact on the production and earnings of the company. Now I realize that due to Soros's reflexivity theory that the above is not black and white and there is a bit of a grey area but the general point holds true. 

Now when you participate in IPOs and share placements etc potentially you are directly responsible for adding productive capacity to the economy.


----------



## bellenuit (21 March 2018)

Value Hunter said:


> Now when you participate in IPOs and share placements etc potentially you are directly responsible for adding productive capacity to the economy.




Without the secondary market there would be no primary market, so to say it adds nothing is wrong. It facilitates the primary market.


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## luutzu (21 March 2018)

bellenuit said:


> Without the secondary market there would be no primary market, so to say it adds nothing is wrong. It facilitates the primary market.




Why not?

The primary market, or market for the sales of ownership in businesses, would be illiquid, or less liquid, but it would still exist. 

Secondary market just make it easier for the raising of new capital. It does so mainly because it allow investors of very modest means to own a share or two in enterprises they would otherwise not be able to own if it's sold privately.


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## Value Collector (22 March 2018)

luutzu said:


> Why not?
> 
> The primary market, or market for the sales of ownership in businesses, would be illiquid, or less liquid, but it would still exist.
> 
> Secondary market just make it easier for the raising of new capital. It does so mainly because it allow investors of very modest means to own a share or two in enterprises they would otherwise not be able to own if it's sold privately.




The secondary market allows capital to stay in the business, and continue working after the original investor wants to pull his capital out.

Without the ability to sell their shares, the original investors would would have to pull their investment directly out of the companies balance sheet.

A share is a perpetual capital placement, it doesn’t expire like a bond and require money to return to the investor, these sort of investments are only possible because investors know they can sell the share and get their investment capital back.

When an original investor sells out and is replaced by a new investor on the register, that new investor now owns the equity of the business, and the equity gets to stay inside the company working, rather than being taken out by the exiting investor.


----------



## SirRumpole (22 March 2018)

Value Collector said:


> The secondary market allows capital to stay in the business, and continue working after the original investor wants to pull his capital out.
> 
> Without the ability to sell their shares, the original investors would would have to pull their investment directly out of the companies balance sheet.
> 
> ...




I don't think anyone is saying that investors should not be allowed to sell their shares, the question is whether share trading adds any value to the company or contributes to the economy. It doesn't as it's just a transfer of ownership not an injection of new capital.


----------



## Value Collector (22 March 2018)

Value Hunter said:


> Value Collector, this is what you said "the most important part is that I put 6800 tonnes of iron ore into the economy, so I can then go and take out some bread, rum, petrol or anything else I need, the unit of exchange of the day is less important."
> 
> That is a completely absurd way to look at things. The secondary market in equities adds nothing to productive capacity it merely transfers ownership of assets. Only when shareholders participate in IPOs or secondary market capital raisings (e.g. rights issues, share placements, etc) do they add to the productive capacity of the economy. When you place an order through your broker on the secondary market to buy shares in for example Fortescue Metals and that order gets filled the all that happens is the ownership of those shares get transferred form the seller to you. If you never bought shares in Fortescue metals, somebody else would still own those shares and the company would still have the same amount of shareholders equity and would produce the same amount of iron ore. Likewise if you sell your shares the company will still produce the same amount of Iron Ore. When you buy and sell shares on the secondary market all you are doing is impacting the liquidity and price of the shares, you have zero impact on the production and earnings of the company. Now I realize that due to Soros's reflexivity theory that the above is not black and white and there is a bit of a grey area but the general point holds true.
> 
> Now when you participate in IPOs and share placements etc potentially you are directly responsible for adding productive capacity to the economy.




If no market existed for Fortescue shares to be bought or sold, investors wishing to exit the investment would have to raid the companies balance sheet to get their capital back.

So when I buy a share of Fortescue I own equity that is working productively, I bought it from an investor wishing to exit, and now I own it. I have replaced his capital with mine.

Also, the longer I own it, the more of my earnings are retained, because they don’t pay out 100% of earnings as dividends.

Investors could get the board to pay out 100% of earnings, and refuse to fund new exploration and just let the mines deplete and equipment wear out, and return all cash flow back to us, but we aren’t doing that, we are letting the company retain earnings to continually make new investments on our behalf.


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## Value Collector (22 March 2018)

SirRumpole said:


> I don't think anyone is saying that investors should not be allowed to sell their shares, the question is whether share trading adds any value to the company or contributes to the economy. It doesn't as it's just a transfer of ownership not an injection of new capital.



Trading for the sake of trading doesn’t.

But I am not talking about trading.

I am talking about equity owners capital adding value at the business.

If the same share is sold every day for 365 days, all that trading doesn’t add extra value, the same value will be generated, you would just say that each investors capital worked for a single day.

(Trading costs would out weigh the value generated though, so those hyperactive investors would lose out over all)


----------



## Value Collector (22 March 2018)

SirRumpole said:


> I don't think anyone is saying that investors should not be allowed to sell their shares, the question is whether share trading adds any value to the company or contributes to the economy. It doesn't as it's just a transfer of ownership not an injection of new capital.




If a company is started by selling $10 million of shares, and the company is productive that $10 million of capital is working productively.

If in 5 years the share holder wants out, and sells out to another shareholder, that new shareholder is now the owner of that productive capital.

The founding shareholder has gone, and the new shareholders capital is now working in the business.

If that new share holder retains his shares for another 5 years then we have a total of 10years of productive investment at the company, 5 attributed to the founding shareholder and 5 to the second owner.

This is the same even if the share was sold 1000 times during the 10 years, each investor just gets you say their capital was productive for a shorter period.


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## bellenuit (22 March 2018)

SirRumpole said:


> I don't think anyone is saying that investors should not be allowed to sell their shares, the question is whether share trading adds any value to the company or contributes to the economy. It doesn't as it's just a transfer of ownership not an injection of new capital.




Apart from what VC said, it facilitates IPOs and capital raising. The company would find it very difficult to raise capital in the first place if initial investors had no way to get their capital out. If they cannot raise capital from IPOs or other capital raising, the company will be forced to get capital from other more expensive markets, like bank loans and bonds, assuming they can.

What do you mean by add value to the company? Are you using the market cap or NTA or something else as the metric? Assuming market cap, anything that assures the smooth running of the company adds to that value. So things like easy access to capital adds to its market cap as the market cap is based on share value and share value is very much related to confidence as well as just the performance metrics. In just the same way one could ask how do audited financial reports add to company value (a la market cap). Just watch what happens when a company fails to get its accounts passed by the auditor or is persistently late. The share price will go south quickly. Yet audits do not in any way add to revenue and in fact is an expense that reduces profit.

Between the NTA of a company and its market cap is a thing called goodwill which is derived from all those other items that make investors confident about the company. Management integrity and capability, the market they are in, the competition, brand name, brand loyalty etc. Having a secondary market for the company shares is part of those intangibles.


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## luutzu (22 March 2018)

Value Collector said:


> The secondary market allows capital to stay in the business, and continue working after the original investor wants to pull his capital out.
> 
> Without the ability to sell their shares, the original investors would would have to pull their investment directly out of the companies balance sheet.
> 
> ...




Yes but that does mean that without the secondary market equity would be removed from the business. 

A privately held business with one or more investors can sell out and have their equity be replaced by the new owner as it would on the stock/secondary market. 

The only difference is liquidity and price. 

On the secondary market there are more potential investors/buyers, there are super funds and smart monies needing places to stack their cash for a fee.

That just make it easier for the owner to sell (or buy more); easier to only sell certain quantity (to settle tax or trust or personal debt issues etc) instead of the whole lot. 

So the secondary market is unnecessary as far as equity ownership from sales is concern. 

Its benefits are a more transparent (or lack of transparency depends on how management want inundate investors with everything to put them off; or from small investors not bothered with meeting face to face with management vs a proper talking to in private companies); more liquid as said above; easier to raise cash if needed; easier for the more knowledgeable investor to make money selling high and buying low.

In privately held companies where the buyer/s are often more knowledgeable buyers, they being either a competitor or a well funded investor with knowledge or consultants looking into all the details... So the prices they paid would often be either fair or a lot less than on an open market with many less knowledgeable buyers like index fund managers or day traders who doesn't care about the business as much as its market sentiment. 

Insofar as the owner wanting out and would either take all their equity out or have it replaced by sales to a new owner/s... that depends on their voting power. 

I'm no corporate lawyer but I haven't heard of any case where a minority owner could sue the company or its majority holder to take the equity out because they wanted to. They either offer it up for sale (at a fair or unfair price), or be stuck with it and enjoy the dividends.


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## Value Collector (22 March 2018)

luutzu said:


> A privately held business with one or more investors can sell out and have their equity be replaced by the new owner as it would on the stock/secondary market.
> 
> The only difference is liquidity and price.




Exactly, thats my point.

When you buy a share on the secondary market, it is exactly the same as if you are buying into a privately held company, you are allowing the previous owner to take their capital and walk away, and replacing that capital with your own, the transaction is just done in a way that no disturbance to the companies balance sheet happens, the other investors equity is left at the company and you just pay him out and take ownership of that equity.

Hence the reason shares are called "equities".



> A privately held business with one or more investors can sell out




So which Private investor could buy Disney? Apple? or Commonwealth Bank? etc etc

These companies are all far to big for any single investor.

if you got rid of the stock market we would certainly live in a world even more dominated by the super rich, there would be no way for small investors to invest in the large companies.



> Insofar as the owner wanting out and would either take all their equity out or have it replaced by sales to a new owner/s... that depends on their voting power.




if shares weren't able to be sold into a secondary market, they would not exist.

No investor is going to commit to a perpetual subordinate security such as a share, where his capital is tied up forever, and he can't sell or have any rights to extract capital from the balance sheet.

You can bet ordinary shares would disappear and securities such as preference shares or some other new security would take it's place where the holders have more rights to determine dividend payouts and capital return cycles etc.


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## SirRumpole (22 March 2018)

Value Collector said:


> No investor is going to commit to a perpetual subordinate security such as a share, where his capital is tied up forever, and he can't sell or have any rights to extract capital from the balance sheet.




There are thousands of private company investors that do just that.


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## Value Collector (22 March 2018)

SirRumpole said:


> There are thousands of private company investors that do just that.




Really? can you name one?

Any private company in Australia can sell its shares. 

And when the owner wants to retire he will either sell the company as an operating business to a new owner, and walk away with cash.

or if there is no one to buy the company, he will extract capital directly from the companies assets, in the same way I said would happen if the secondary share market didn't exist.


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## SirRumpole (22 March 2018)

Value Collector said:


> Really? can you name one?




One private company ? There are thousands of them.

The last I heard is that a private company shareholder can't sell his shares without the agreement of the other shareholders.


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## Value Collector (22 March 2018)

SirRumpole said:


> One private company ? There are thousands of them.
> 
> The last I heard is that a private company shareholder can't sell his shares without the agreement of the other shareholders.




I have never heard of that, except in situations where the company itself has written in a rule into its constitution.

however my claim was this.


> No investor is going to commit to a perpetual subordinate security such as a share, where his capital is tied up forever, and he can't sell or have any rights to extract capital from the balance sheet.




then you mentioned there are thousands of private companies in that situation.

Now I don't think you are correct in your claim that people are investing in these businesses with the intention their "*capital is tied up forever, and he can't sell or have any rights to extract capital from the balance sheet.*"

They can sell their shares, and would have many ways to extract capital from the balance sheet.

-----------

Think about it, what shares do you own?

Would you have bought these if there was no way of selling them and getting your investment back? or no way of accessing the balance sheet to get your funds back directly from the companies assets?

I believe my claim is true that if ordinary shares didn't have a secondary market they wouldn't really exist, some new security would have to be invented, that was a mix between a share and bond, where people could invest in the equity of a company like they do when they buy shares, but they are not perpetual, they would have to expire like a bond and the company return its capital to share holders after a certain time.

The days of investors buying shares and allowing companies to keep that capital and all retained earnings in perpetuity would be gone, because the only reason they allow that now is because they are hoping the company grows that capital and they will make a capital gain when they sell.


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## SirRumpole (22 March 2018)

Value Collector said:


> The days of investors buying shares and allowing companies to keep that capital and all retained earnings in perpetuity would be gone, because the only reason they allow that now is because they are hoping the company grows that capital and they will make a capital gain when they sell.




Yes but private company shareholders choose what proportion of profits the company retains and what is paid out to them. The ordinary shareholder in a public company has no control over this.

But anyway this is off the topic of a UBI which we both agree with, so let's leave it there.


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## Value Collector (22 March 2018)

SirRumpole said:


> Yes but private company shareholders choose what proportion of profits the company retains and what is paid out to them. The ordinary shareholder in a public company has no control over this.
> 
> .




Yes, which means the ability to sell your equity holding is even more important, not less important.

-----
But the retained profits are decided by the board, and the board is put in place by the share holders, so even in a public company it is the share holders that ultimately decide the pay out level, via voting board members.

If they had no other way to get their capital back, you can be sure a growing number of share holders would be seeking board members willing to pay out larger dividends or other capital returns.


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## SirRumpole (22 March 2018)

One opinion on the future of work.

http://www.abc.net.au/news/2018-03-22/future-of-work-not-robots-we-need-to-fear/9567112


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## Value Collector (24 March 2018)

SirRumpole said:


> Y
> 
> But anyway this is off the topic of a UBI which we both agree


----------



## Value Collector (24 March 2018)

Value Collector said:


>





I like the idea at the end of the video of having tax brackets for companies that increase as they become more automated, and would allow the BUI to increase gradually over time as the automation increases.


----------



## SirRumpole (24 March 2018)

Value Collector said:


>





Good summary.


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## Value Hunter (30 March 2018)

I think one factor being overlooked in the argument that additional participants in the equities secondary market add value to the economy are the factors of marginal additional users and declining marginal utility. 

Value Collector if you or I buy or do not buy BHP shares or Commonwealth Bank shares it makes no difference because a large and active secondary market already exists without us, and the shares are already liquid enough to the point where additional share trading liquidity is not really going to bring down the company's cost of capital or increase their ability to raise more capital. Perhaps there is some limited merit in this argument that you are doing something productive for the economy if we are talking about buying shares in companies outside the ASX300, but for the large cap stocks I do not really see an argument to be made.


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## SirRumpole (2 May 2018)

This may give pause for thought...

http://www.abc.net.au/news/2018-05-01/finland-universal-basic-income-welfare-reform/9709798


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## Tisme (2 May 2018)

SirRumpole said:


> This may give pause for thought...
> 
> http://www.abc.net.au/news/2018-05-01/finland-universal-basic-income-welfare-reform/9709798




A better solution would be to give them all honourary degrees so they feel and perform as useful as most graduates are these days. Self esteem is a great driver of self actualisation  and enthusiasm.


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## Value Collector (2 May 2018)

Value Hunter said:


> Value Collector if you or I buy or do not buy BHP shares or Commonwealth Bank shares it makes no difference because a large and active secondary market already exists without us, and the shares are already liquid enough to the point where additional share trading liquidity is not really going to bring down the company's cost of capital or increase their ability to raise more capital..




BHP only has all the mines it has today because share holders invested capital and have allowed most of their earnings to be retained each year and reinvested to replace mines and grow, they could decide to just take 100% of free cashflow till the mines are depleted and walk away with their pile of capital and go to Disneyland. 

When you own shares, you own the working capital that the business relies on to continue functioning, With out the accumulation of shareholders funds inside the business, the business simply wouldn't have the capital operate.

saying that the market is big enough that no one share holder is needed is irrelevant, it's just like saying Woolworths is big enough that no one customer is needed, but that does not prove that customers aren't needed for it to survive.

The fact is the system requires capital to be invested and held inside the companies, especially equity capital this comes investors, the capital might stay working in the business for 50 years and the owners of it might change every year, but each group of owners has the choice to retain the funds working in the business and reinvesting capital each year to continue operations, or liquidating the business or taking 100% of cashflow draining the company.

---------------------

So if you buy shares on the secondary market, and hold them for 2 years, your capital is working inside that business for 2 years, because you have bought out another investors and taken over their ownership of the assets.


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## Value Collector (2 May 2018)

SirRumpole said:


> This may give pause for thought...
> 
> http://www.abc.net.au/news/2018-05-01/finland-universal-basic-income-welfare-reform/9709798




I think it is still to early for it to work properly.


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## SirRumpole (2 May 2018)

Value Collector said:


> I think it is still to early for it to work properly.




I think you are right.

Unemployment needs to go up to about 7% I reckon before this becomes an issue.


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## luutzu (2 May 2018)

Tisme said:


> A better solution would be to give them all honourary degrees so they feel and perform as useful as most graduates are these days. Self esteem is a great driver of self actualisation  and enthusiasm.




That or create industries that employ people.


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## luutzu (2 May 2018)

SirRumpole said:


> I think you are right.
> 
> Unemployment needs to go up to about 7% I reckon before this becomes an issue.




The property sector employs about 14% of Aussies?

Property prices have been going down, slightly, lately. With some 3/4 of mortgages due to move from interest-only to principle and interest over next 2 years or so... It's a crack in that proverbial dam.

I've been dealing with tradies past months. You can see the financial stress on them. Some deal with it by working harder, doing a proper job to get more work. Others try to shaft you. Maybe that's just typical but yea... tougher times ahead.


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## Value Collector (2 May 2018)

luutzu said:


> The property sector employs about 14% of Aussies?
> 
> Property prices have been going down, slightly, lately. With some 3/4 of mortgages due to move from interest-only to principle and interest over next 2 years or so... It's a crack in that proverbial dam.
> 
> I've been dealing with tradies past months. You can see the financial stress on them. Some deal with it by working harder, doing a proper job to get more work. Others try to shaft you. Maybe that's just typical but yea... tougher times ahead.




In Australia we have 2.5 people per house hold.

Every 3.5 minutes our population increases by 2.5 people,

So we need to add roughly 411 new dwellings built every day to maintain the status quo, 

Also we have 9,200,000 existing homes, these either need replacement or major refurbishing at least every 50 years, So thats another 505 homes built or requiring major work every day,

Add to that the required new or refurbished Schools, hospitals, office buildings, hotels and tourism, shopping centres, industrial buildings, infrastructure such roads, airports, mining, farming, etc etc etc.

I don't think those involved in the property sector are at risk of being unemployed for to long.


----------



## luutzu (2 May 2018)

Value Collector said:


> In Australia we have 2.5 people per house hold.
> 
> Every 3.5 minutes our population increases by 2.5 people,
> 
> ...




Don't know about other people's kids but our 3 kids haven't moved out yet 

There are birth but there also death. Migrants coming in and going overseas. 

So the demand/supply of housing is not a smooth curve but a lumpy one. Very lumpy. And supply is about to, if not already, outstripping demand for the next 20 years (yes, I just pulled that number out of thin air). 

And while it's true that property do need repair and maintenance. Its schedule depends on having the cash, or the time to DIY... It's not, it's looking old so we should repair it kind of deal. 

I know of houses where the tin roof is all rusted and leaking. But it's not fixed because it doesn't rain that often and when it does you just put a bucket or ten out, then promised to fix it "tomorrow".


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## Value Collector (2 May 2018)

luutzu said:


> Don't know about other people's kids but our 3 kids haven't moved out yet




Thats called pent up demand.


> There are birth but there also death. Migrants coming in and going overseas.




Do you really think I didn't allow for deaths?

after deaths and people leaving the country are accounted for, we get 1 new resident every 1 min and 24 seconds.

http://www.abs.gov.au/ausstats/abs@.nsf/94713ad445ff1425ca25682000192af2/1647509ef7e25faaca2568a900154b63?OpenDocument


one birth every 1 minute and 43 seconds,
one death every 3 minutes and 16 seconds,
one person arriving to live in Australia every 1 minute and 1 seconds,
one Australian resident leaving Australia to live overseas every 1 minute and 49 seconds, leading to
an overall total population increase of one person every 1 minute and 24 seconds.



> outstripping demand for the next 20 years (yes, I just pulled that number out of thin air).




As usual.



> And while it's true that property do need repair and maintenance. Its schedule depends on having the cash, or the time to DIY... It's not, it's looking old so we should repair it kind of deal.
> 
> I know of houses where the tin roof is all rusted and leaking. But it's not fixed because it doesn't rain that often and when it does you just put a bucket or ten out, then promised to fix it "tomorrow".




Yeah demand can be pent up for a while, but if construction really stopped to the point where a decent chunk of that 14% you mentioned were put out of work, the pent up demand would build super fast.

Also, in a keynes system, the infrastructure spend should kick in to absorb some latent capacity in the private market.


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## Value Collector (2 May 2018)

The population clock is even more impressive from a global scale.

Population grows at 10 people roughly every 4 seconds.

world population clock uk

Check out this link.


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## luutzu (2 May 2018)

Value Collector said:


> Thats called pent up demand.
> 
> 
> Do you really think I didn't allow for deaths?
> ...




And every newborn go out to buy a unit? Before or after immunisation?

Every new immigrant rent to 2.5 per unit or bunk up in their cousin's room?

There's always demand, for everything. The problem has never been lack of demand. It's money. Money in terms of credit or savings.

With the average property in Sydney being around the $1M mark past few years; with average wage being $80K... you reckon those who can buy that average house have enough left over to do a reno?


Yea, infrastructure should kick in. But should and does are different things. And when a person owes the bank a couple of mortgages or more... 

Have you seen property investors calling up everyone they know, or hardly know, asking to borrow a few hundreds because one of their tenants didn't have them on time? I have, and that was back when the market and economy barely drop.


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## Value Collector (2 May 2018)

luutzu said:


> And every newborn go out to buy a unit? Before or after immunisation?
> 
> .




No, you see human reproduction didn't start today, its been going on for a while, so we have people that were born 21 years ago moving out of home today, it's like a pipeline, kids born today get fed into one end, and 21 years later they pop out require a place to live.

and the pipeline is currently primed, there has been no gap in the breeding cycle. ( I know, the kids in the pipeline are consuming more Disney movies, books shirts and toys than ever)



> Every new immigrant rent to 2.5 per unit or bunk up in their cousin's room?



No thats just the average. the immigrants bunking is offset by the single elderly lady or the divorcee



> There's always demand, for everything. The problem has never been lack of demand. It's money. Money in terms of credit or savings.
> 
> With the average property in Sydney being around the $1M mark past few years; with average wage being $80K... you reckon those who can buy that average house have enough left over to do a reno?




my argument isn't that prices won't decline, just that those employed in building and refurbishing won't be out of work (for long at least) and that any bust will be followed by an equal but opposite boom (in activity, not necessarily prices)


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## luutzu (2 May 2018)

Value Collector said:


> No, you see human reproduction didn't start today, its been going on for a while, so we have people that were born 21 years ago moving out of home today, it's like a pipeline, kids born today get fed into one end, and 21 years later they pop out require a place to live.




One of your Disney version again or what? 

So an average kid walks into the bank after uni/TAFE... ask to transfer the savings from that average DollarMite account... and will not at all be laughed at by the lending officer when asked to take out a mortgage for that average $500K unit.



Value Collector said:


> and the pipeline is currently primed, there has been no gap in the breeding cycle. ( I know, the kids in the pipeline are consuming more Disney movies, books shirts and toys than ever)




My quick sums of a CoreLogic report on new apartments being built in Sydney since 2009 to 2017 totalled some 1.2M new unit. 

I think your ABS's 2.4 new person in Sydney [or was it Australia?] during the same time period averages 1.5m new people, all of whom aren't of legal age to buy a property yet. Some might still be in their cot.

And that doesn't include the new houses, just units.




Value Collector said:


> No thats just the average. the immigrants bunking is offset by the single elderly lady or the divorcee
> 
> my argument isn't that prices won't decline, just that those employed in building and refurbishing won't be out of work (for long at least) and that any bust will be followed by an equal but opposite boom (in activity, not necessarily prices)




I hope you're right. 'cause if the economy goes a bit, the current record level of personal debt will hurt a lot of people. Maybe most of their live's savings and investment will be wiped out... and that's something no one wishes for.


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## Value Collector (2 May 2018)

luutzu said:


> So an average kid walks into the bank after uni/TAFE... ask to transfer the savings from that average DollarMite account... and will not at all be laughed at by the lending officer when asked to take out a mortgage for that average $500K unit.
> .




They don't have to Buy a house, they can just rent. As long as they are occupying a dwelling they are contributing to demand for the construction industry.



> My quick sums of a CoreLogic report on new apartments being built in Sydney since 2009 to 2017 totalled some 1.2M new unit.




Persons per dwelling (which have trended down), affect the number as well, for example if in 1990 there was 3 people per dwelling and that trended down to 2 people per dwelling, then even with no population growth we would have to increase housing stock by 50%.

the population has grown, but family sizes are also smaller and there are more single person homes.

So the same total population if spreading out into more homes.




> I think your ABS's 2.4 new person in Sydney [or was it Australia?] during the same time period averages 1.5m new people, all of whom aren't of legal age to buy a property yet. Some might still be in their cot.




In 2010, you get demand added by the people born in 1990.

You don't seem to be appreciating that every year there are kids reaching an age where they wish to move out, you don't have to wait for babies born today to age, because as I said there has been kids born every day for in the previous decades.

although babies born today would increase demand a bit, because people with new borns might not want to live in a share house or have room mates anymore, so new household formation does come about by people deciding to have a family




> And that doesn't include the new houses, just units.




you have to demolish houses to build units, so 1.5 Million new units isn't a net gain of 1.5 Million, it would be 1.5 million minus what was demolished.

also lots of those units are 1 and 2 bedrooms, which are created to facilitate the shrinking household size as the population spreads out among more dwellings

But as I alluded to above, demographics have changed.

Single child families are more common than 4 child families, and that family might not live in the same house eg single mum and child in one house dad in another.

elderly parents are more likely to live in a retirement village now rather than move in with kids.

lots of factors causing household size to shrink, which adds to demand for dwellings over and above than simple population growth.




> I hope you're right. 'cause if the economy goes a bit, the current record level of personal debt will hurt a lot of people. Maybe most of their live's savings and investment will be wiped out... and that's something no one wishes for




Even if there is an over supply, the growing population will fill it pretty rapidly.


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## SirRumpole (2 May 2018)

Value Collector said:


> Even if there is an over supply, the growing population will fill it pretty rapidly.




I'm finding it hard to follow your and Luutzu's argument here. Are you trying to justify rapid population growth or what ?

RPG adds to the demand for housing which is not being filled thus the massive increase in house prices over the last 30 years making this country one of the most expensive places in the world to live.

The fact that propert prices have levelled off is not due to increases in supply, it's simply un-affordability.


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## Value Collector (2 May 2018)

SirRumpole said:


> I'm finding it hard to follow your and Luutzu's argument here. Are you trying to justify rapid population growth or what ?



Not justifying it, I am just pointing out that its happening.

luutzu seems worried that building activity will stop and 14% of the population will be out of work.

I am just saying that the combined effect of 

1, Population growth
2, Household size reducing
3, the need to replace or refurbish existing housing stock every 50 years or so.

means that over 1000 homes need to be build or get major work done every day, So we won't see mass unemployment in the housing industry.

Not to mention demand from all the other factors I mentioned, eg schools, hospitals, office buildings, industrial buildings, air ports, roads, hotels and tourism, mining farming etc etc.


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## luutzu (2 May 2018)

Value Collector said:


> They don't have to Buy a house, they can just rent. As long as they are occupying a dwelling they are contributing to demand for the construction industry.
> 
> 
> 
> ...




I think the average rent goes for some $450 a week. That's $23.4K a year. Say that power is $200 a week, mobile $50, home internet $50, food maybe $100, netflix... So that's about $50K in expenses a year. Not including transportation. 

Don't know man. Demand is there, money might not be.

--------

The early 90s was a few years after property crashed, big time. That's why it was so cheap and anyone working could easily, comfortably afford it. 

Nowadays, a couple earning $200K a year would find it hard to buy a comfortable house in Western Sydney. That's nuts. 

I recently saw an ad for a fibro on 550m2 block on a major road, some 100m from a major Hume Highway. Its roof collapsed in; there are smoke stain i.e. fire. Glass and windows and doors broken. The yard are littered with the last tenants' rubbish.... asking for $800K. 

That's freaking crazy. Didn't they know that a half-burnt house has had its chi escaped?


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## luutzu (2 May 2018)

Value Collector said:


> Not justifying it, I am just pointing out that its happening.
> 
> luutzu seems worried that building activity will stop and 14% of the population will be out of work.
> 
> ...




I really hope you're right. 

Just my take on it is that it will get a whole lot worst before it'll get better.

Too many people owing way too much money. It's not going to be good.


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## SirRumpole (2 May 2018)

Value Collector said:


> luutzu seems worried that building activity will stop and 14% of the population will be out of work.




Are we saying that building activity can continue indefinitely with little degradation of lifestyle, environmental destruction or loss of prime farming land ? 

I don't think so, in fact I'm appalled at the way population has been allowed and encouraged to increase so much with so little planning.

We are heading for Bejing type problems with population density causing pollution and road chaos.


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## Wysiwyg (2 May 2018)

Tisme said:


> Self esteem is a great driver of self actualisation  and enthusiasm.



Prolonged rejection is a self esteem destroyer with the exception of beautiful people for which all doors open.


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## Macquack (2 May 2018)

SirRumpole said:


> We are heading for Bejing type problems with population density causing pollution and *road chaos*.



It is already here. I know you live in a rural area. Have you been to Sydney lately? Sydney is f*****.


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## SirRumpole (2 May 2018)

Macquack said:


> Have you been to Sydney lately?




Thankfully no. I go to Melbourne during at Christmas and it seemed ok, at least the parts I went to. Maybe the trams help a lot with traffic there.


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## Value Collector (2 May 2018)

SirRumpole said:


> Are we saying that building activity can continue indefinitely with little degradation of lifestyle, environmental destruction or loss of prime farming land ?
> 
> I don't think so, in fact I'm appalled at the way population has been allowed and encouraged to increase so much with so little planning.
> 
> We are heading for Bejing type problems with population density causing pollution and road chaos.




I am not saying that life styles won’t change or that the effects with be positive.

I am simply stating the facts about population growths effect in the number of dwellings needed.


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## Value Collector (2 May 2018)

luutzu said:


> I think the average rent goes for some $450 a week. That's $23.4K a year. Say that power is $200 a week, mobile $50, home internet $50, food maybe $100, netflix... So that's about $50K in expenses a year. Not including transportation.
> 
> Don't know man. Demand is there, money might not be.
> 
> ...




I am not making any claims about property prices, simply talking about how many need to be built to maintain the status quo.

In a 5 - 10 years today’s teenages will have kids, and their parents and grand parents will still be alive, that’s all it takes for population growth.

Mean while foreigners stream in looking for their share of the good life.


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## luutzu (2 May 2018)

Value Collector said:


> I am not making any claims about property prices, simply talking about how many need to be built to maintain the status quo.
> 
> In a 5 - 10 years today’s teenages will have kids, and their parents and grand parents will still be alive, that’s all it takes for population growth.
> 
> Mean while foreigners stream in looking for their share of the good life.




Yea, true. But like Rumpole said, it boils down to affordability isn't it?

If wages and job (in)security remain as it is... people will either have to win lottery or get real creative with their living arrangements. 

That's why in addition to new units and duplexes, there's practically a granny flat or an extension in every house.


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## Tisme (3 May 2018)

Wysiwyg said:


> Prolonged rejection is a self esteem destroyer with the exception of beautiful people for which all doors open.




Couldn't agree more. I'd add in the pressure to conform to moronic norms.


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## Wysiwyg (3 May 2018)

Tisme said:


> Couldn't agree more. I'd add in the pressure to conform to *moronic norms*.



Could you provide some examples please? I want to observe them for realisation purposes.


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## Tisme (3 May 2018)

Wysiwyg said:


> Could you provide some examples please? I want to observe them for realisation purposes.




I shall have to sort my grab bag for the freshest ones.


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## SirRumpole (23 May 2018)

The IMF has a pessimistic outlook on automation.

http://www.abc.net.au/news/2018-05-23/we-should-fear-robots-says-imf/9786460


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## Value Hunter (15 March 2020)

The problem with UBI (Universal Basic Income) is that its only ever going to provide a subsistence level income. 

So sure the supermarkets and pharmacies, and other essentials will still have customers but all of the products and services aimed at middle class people will shrink a lot. Who is going to take vacations or buy cars or dine at restaurants on subsistence level income? So a lot of businesses providing non essential services will cease to exist.

I am not sure how good things will be for businesses in general in a future where automation levels are high.


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