February 23, 2007

20 Grand for What?

Following Germany's example, the government of Stravaraland is seriously contemplating introducing a £20,000 bonus for every child (after the second) born on the island. This will boost low birthrate figures and gradually pull the social security fund out of bankruptcy, not to mention help us in our struggle to safeguard the rightful place of Stravaralanders on earth, for the sake of posterity. The measure will also help us in the struggle against the infidels by increasing our numbers relative to theirs.

This new policy has been hailed by most commentators. Lazaros Mavros hailed it because we need a higher quantity to preserve ourselves, a duty to our great ancestors. Not all commentators have agreed with this particular measure though, and for reasons that make perfect sense, see this.

Lazaros Mavros, who makes perfect sense when not talking about Turkey, Greece, Cyprus or international politics in general, pointed out that it is not just quantity that is needed but also quality. Let me expand on that.

Recent research that was popularized by Freakonomics asks what has determined the big decrease in crime rates in the US over the last decade. Is it economic growth? Is it better policing? Is it better courts? Is it better prevention?

Well, No. The answer lies with the advent of The Pill. The idea is simple. Once abortions were legalized in the U.S., unwanted children were not born. Unwanted children bring less attention to them, and they eventually end up committing crimes. Get rid of the unwanted children and 20 years later one witnesses a dramatic decrease in crime!

Now, in Stravaraland, we have the opposite. Encourage the birth of unwanted children at the rate of 20 grand a pop. Pay less attention to these children because you did not really want them in the first place, and in 20 years' time you simply end up with more people around and a higher percentage of gangsters on the loose….

Now how's that for unintended consequences?

14 Comments:

Blogger Σωφρόνης Κληρίδης said...

Apodime, thanks for the reference. The funny thing is that although most commentators hailed the measure, every person that I have talked to so far (including both left- and right-wingers) thought it was a ridiculous idea. Makes you wonder who the populists are pandering to.

24 February, 2007 08:04  
Blogger apodimos Kypreos said...

Well, it is not necessarily a populist idea, it does get implemented in most continental EU countries (eg Germany and I think France). One can argue that in theory this is a reasonable incentive to have more children.

24 February, 2007 11:07  
Anonymous illantros said...

Anything that involves handing out cash is populist by definition. The larger the cash dispensation, the greater the degree of populism. Simple math, really.

24 February, 2007 14:23  
Blogger apodimos Kypreos said...

Handing out cash for a reason is not populist by definition, I think.

Increasing a payment to the elderly who receive less than 100 pounds a month from 100 to 120 pounds so that they can live an "easier" month does not count as populism in my books.

I only need one counterexample.

24 February, 2007 14:35  
Anonymous illantros said...

It's populist, but only very slightly (20 pounds worth it). 20,000 pounds on the other hand, now THAT is populism!

P.S. As for the specific example: I wonder how many of those starving pensioners are self-employed individuals who contributed next to nothing to social security, paid no income tax, have loads of cash in the bank, oikopeda, horafouthkia, and so on and so forth....

24 February, 2007 14:51  
Blogger apodimos Kypreos said...

OK, I do not disagree that most of these handouts are populist. But in this case, they want to achieve something with it. So it is not just handing out money, it is handing out money to change behavior, to produce more babies. The poor guy who proposed it looks at social security and realizes something needs to be done. They dont let him increase the retirement age, cut the benefits or increase taxes. So, he comes up with this borrowed idea from continental EU thinking that nobody will object...

So 2 things,

1) The fact that is was not proposed by a political party but by the labor minister, makes me think that this was an honest (granted not very smart) idea to do something to solve a problem. Whereas populist implies an explicit goal to win votes by giving money out for no reason.

2) The fact that it is conditional on having a third baby is not exactly a handout because the cost of the extra baby will much exceed the 20000 grand.

As for my example, you can easily tell who is starving and who is not among the pensioners in Stravaraland... And if you cannot tell, you should be able to coordinate and have all that information you talk about in a central registry to determine who should be getting means-tested benefits.

24 February, 2007 15:04  
Anonymous illantros said...

Point 1:

Perhaps it was not populist to begin with. But once it was out there, the populists gathered around it. It's difficult for any politician to oppose a measure like that.

Point 2:

Interesting point. Let's think about this for a minute. Twenty grand is much smaller than the cost of raising a child, so no-one in their right mind would have a third child for the money. This implies two things: (i) the policy will be ineffective; (ii) it IS just a handout (conditional, sure, but most of them are).

But I don't actually believe that. I think the policy WILL be effective and it WILL raise births. Which takes us back to your original point: what kind of person would choose to have a third
child just because of the 20 grand?

Final comment about the pensioners: sure it's easy to find out who needs help. You think they will?

Enough thinking for one day. Phew!

24 February, 2007 17:08  
Blogger apodimos Kypreos said...

Deep down you know we agree...

24 February, 2007 21:23  
Anonymous illantros said...

I said I was going to shut up but then I found this. According to the US Department of Agriculture the cost of raising a child (to 17 yrs old) in a low-income household in the USA is 139,000 dollars. If it's the same in Cyprus, that's a bit more than 60,000 pounds. Therefore the check covers about a third of the cost. Not too shabby!!!

24 February, 2007 22:21  
Blogger apodimos Kypreos said...

You know, if you start them early on bread and Pollybeef (Baloney), the ones some people used to give out to their doggies and others to the soldiers at the various KENs, the cost might be even lower...

If also you start them early to work on the various businesses of the family, especially if the family is into those cabarets (that unlike their counterparts on The Other Side spread the message of our Lord), well, who knows, one might even make a profit...

25 February, 2007 08:56  
Blogger the Idiot Mouflon said...

And thus no-one even mentions the possibility of raising wages or increasing the contribution of the employers to the social security funds.

25 February, 2007 17:52  
Blogger Illantros (Ιλλαντρος) said...

Hey, I grew up on polibeef and look what happened to me - I became illantros!

25 February, 2007 18:23  
Blogger apodimos Kypreos said...

I guess BBC caught the story too...Unintended consequences for the short run...Wait until you see the long run ones...

Enjoy...

Fears over Cyprus baby cash plan

Birth rates have become a political issue in divided Cyprus
A proposal to give a huge cash bonus to Cypriot women who have large families could in fact lead to an "epidemic" of abortions, an MP has warned.
The government has proposed a £23,000 (34,000 euro) bonus to mothers who have three or more children.

Maria Kyriacou says several pregnant women have contacted her to find out when the scheme is likely to start.

Women expecting a third child are considering aborting, and trying again once the payments are active, she said.

"I have had questions from ladies in the earliest stages of pregnancy considering whether they can afford to have a baby [at the present time]," Ms Kyriacou told the BBC News website.

"They could better afford it with a lump sum of thousands of pounds," the Conservative MP added.

"A baby's life is very important. It's wrong even to discuss killing a baby."

Turkish increase

Last week, Labour Minister Antonis Vassiliou said the government was considering a payment of 20,000 Cypriot pounds "for every third child born and thereafter".

The measure forms part of a package of welfare policies designed to promote the family and counter a tumbling birth rate.




Europe's abortion rules

The birth rate among the Greek population of the divided island is much lower than that in the Turkish part, meaning the Turkish population is catching up with the Greek one.

Governments across Europe are trying to tackle falling birth rates.

The German government introduced a "baby bonus" beginning on 1 January this year, leading to some mothers due in late December reportedly trying to delay their labour.

'Insulting'

Abortion is tightly restricted in Cyprus, but is said to be common nonetheless.

Ms Kyriacou said that "to stop this from reaching epidemic proportions, we decided to sound alarm bells so that the labour ministry clarifies the amount and the time from which it will apply so that this confusion can end".

Mr Vassiliou dismissed fears of a rise in the number of abortions, saying: "I don't believe [Cypriots] would stoop so low as to use such methods and actions. I believe it is insulting to our people to project such claims."

Family planning groups said the government should simply announce that the payments would be paid retroactively, to make currently pregnant women eligible.

26 February, 2007 20:59  
Anonymous Anonymous said...

From Strovolitis:
Unfortunately, abortions have already started. The insecurity over the matter has left many couples saying "let's have the third one AFTER the law is passed." The Ministry of Finance does not want to give out the dosh (and will rpobably win the bet at tehe end of the day) while the idiot of a Labour Minister wants to win votes for TeePee next Feb. That is insulting Mr Vassiliou.

01 March, 2007 11:53  

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