Government Incentives

"The government should..." is generally the opening of a bad idea. This post I'm going to take apart government incentives.

Lets start with the first time buyers grant 5% rebate on a home up to €500,000 that's €25,000. Sounds great right? Well no, the market reacts to the available funds of the buyer, lenders were happy to give 5% extra and sellers rose the price to the available funds of the buyers. Which is why we've seen an increase on first time buyers homes by 5%, that brings first time buyers back to square 1 and not able to afford houses.

Lets look at the limitations on rent, landlords cannot raise rents by more than 4% from January of this year. Which saw a drastic increase in rent before January. Furthermore it petty much guarantees rents will increase by 4% per annum, in 12 years rents will have doubled. Given wages increase by 2% per annum and people are already paying over half there wages we could reach a critical mass for wages to rent within 20 years. I'm theory the market should stabilise before that critical mass hits, in theory landlords won't let it get to that point as they'll end up in a position with no one to rent to. Unless another government incentive kicks in.

Essentially what we see with any state incentive to relieve the market only works for a short period until the market increases to take advantage of the extra available funds of the consumer. The rules of supply and demand lead to the funds of the consumer dictating the price a product will be sold for, essentially no vendor will price themselves to a point of no sale. This has to be taken in balance with how essential the product is.

Now lets throw on the conspiracy hat. A number of politicians are property owners. If they're in a position to regulate their market upward then they likely will. Even worse they're doing it with tax payers money. This is even further reason government has no place in the marketplace.

Universal Basic Income

Update another interesting UBI post in favour here.
Preamble:
The 2 most convincing arguments around UBI I've seen so far
Dangers Of Universal Basic Income
Libertarian Case for Basic Income

I'm still opposed to it, essentially it comes down to these points.
People need encouragement to develop, it's often said that the greatest developments come from war, it's not necessarily war but the act of competition, some of the greatest innovations in road safety come from races, the space race was a dick measuring contest between the US and Russia, whilst part of the cold war it wasn't a conflict, so on that a competitive wage market or even a lack of money are major contributing factors to people to do something. Personally I would never have gotten interested in process development and analytics if I hadn't ended up in role that paid more. Some will end up working in science or medicine to make things better but most end up disillusioned through the college process and crippling debts.


Not pushing people into a state where they need to work could be unhealthy, leaving them complacent, watching drivel, reading some rambling ranty blog or playing video games. Taking away there routine and allowing people to slip into an unnatural sleep cycle and poor diet will cause depression.

Where does the money come from before you say "gummerment", back to my usual point, where do they get there money from? Taxes, what's the largest source tax? Income tax. As you reduce the number of people employed or having to be employed you reduce the number of people who can be taxed, so that leads to higher VAT (sales taxes) and/or higher income tax on the few left working. You might think it can come from corporate tax, some sort of automation tax but like how Ireland gets companies into the country, we risk losing them to countries with lower automation tax and looser environmental laws.

In favour there's a simple argument for UBI it should be a single payment unlike our multi-payment system we have now, a fairly simple payment to all citizens cutting back on the bureaucracy needed to issue social welfare.

Further to that it should leave people free to develop as they want, study what they want and work a lot less if not at all. As I said above I don't see it working like that for the vast majority.