Welcome to Finance and Fury, the Furious Friday edition.

This is part 3 in the poverty miniseries, which is alongside the supply side economics flow on.

The first episode was supply and poverty.

The second episode was the big 5 factors of poverty.

Today we will put it all together to derive a system that can reduce overall poverty.

This system: will it be perfect?

  • Just look at Utopia
  • “misplaced faith in political utopias has led to ruin”
  • All systems have flaws
  • Having less freedom leads to more poverty
  • Could technically lead to more poverty, if it’s by choice

The system has to be 2 parts:

  1. What system works best to reduce the big 5 factors: reduce diseases, increase knowledge, reduce apathy, reduce authoritarianism and build resilience rather than dependence.
  2. What provides individuals freedoms?

Disease:

  1. Death from chronic disorders in the first world
  2. Death by horrible diseases in the third world like respiratory infections, diarrheal diseases etc
  3. The necessities: clean water, electricity, food, and education
  4. Where do these factors come from? Why aren’t these a problem in Western countries?

The System:

  • Corruption comes with any system
  • Greater power can show more corruption
  • But power is needed to provide a structure for secondary factors
  • Money in politics can represent a form of corruption
  • There is no sense of service working in institutions
  • Any powerful system will punish you for speaking truth about their evils
  • Lack of transparency within institutions, to remove this, politicians should forgo financial incentives
  • The formal education of politicians and the real world experience of politicians are very slim
  • Reducing the element of these factors helps to reduce poverty, by using a meritocracy

What does any system have the ability to create?

  • The remaining 3 factors – dependency, apathy and authority
  • The more power the government has, the worse off the population are
  • The focus should be not to make the population reliant
  • The battle between freedom and free stuff
  • Welfare helps to a point, but after that point it keeps people in poverty
  • The safety nets can either be voluntary or compulsory
  • Most people don’t want to support people who want to remain in the safety nets
  • These are not long term solutions
  • The lack of knowledge is a responsibility of ours
  • 12 years of school is not enough, Focus on practical and applicable skills. A libertarian view on education. Learn the basics
  • The best and brightest from these suffering populations leave, leaving no one to help fix local issues
  • Community systems that can help build self-reliance, dialectic systems help communities

Recap of the System:

  • Allows for the provision of infrastructure, concentrated responsibility to provide this
  • Corruption needs to be low to reduce poverty
  • Lack of decision-making ability
  • Provide jobs and the ability to get jobs
  • Greater the economic freedom, the lower unemployment is and the lower tax is
  • More freedom means less inflation and the greater price purchasing parity
  • Countries at the bottom have high government expenditure to GDP %
  Top 10 Bottom 10 166-176
GDP Growth

3.3

-2.8

0.9

Inflation

1.4

189.2

111.4

GDP per capita

$59,194

$9,140

$11,127

Unemployment

4.2

9.1

6.0

Public debt

52.2

69.6

57.6

Gov Expenditure

30.6

68.3

41.6

Tax Burden

22.1

21.5

24.1

 

The last 3 factors are solved by individual and Economic freedoms

  • Small percentage of people think that poverty has gotten better, the majority think poverty has gotten worse
  • Stop using a relative poverty measure, only 4% of Australians are in absolute poverty. It’s not extreme poverty.

Which political party seems to be on the right track?

  • Listen to the podcast to find out!
  • Government spending is about $16,000 per person in this country
  • Public earnings are about $1,775 pw whereas private earnings at about $1,590 pw.
  • The 74 senators have interesting life experience before politics

To summarise the episode:

  • More economic and individual freedom, the lower the poverty rates

Next week:

Back on track next week with the pitfalls of supply-side economics. There are 2 major faults.

If you liked the episode let us know by leaving a review, or get in touch with us at the contact page here.

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