18. maj 2006

Real Welfare, real Globalization

From ideology to reality

An obstinate and persistent propaganda about an idea from 1930s bore fruit. Very well, a better system of hospital-treatment and new schools did not seem to be the worst. But it certainly did not stop here. The ideology had got off the ground, and ideologies always continue towards the clouds, from where you perhaps are aware of that it is not easy to listen to and to look at the Earth.

The system of welfare in Denmark built on services and transfers as private right, but arranged with collective financing, so that the originators of the project imagined that individuals of the society should receive a little more from the society than they actually paid in taxes. This was of course nonsense, because the public cannot give you anything, before it has collected it via taxes[1], printed too many notes or borrowed the money.

Welfare and Globalization in an European context

In Ireland the export income was 7.5 times larger than the public transfers to unemployed, expelled and pensioners in 2004. In Denmark 1.95 times.

Welfare + Globalization – Ideology = Future

Denmark as an example: Population 5,427,459 – a little smaller than Berlin or Paris distributed on a larger area

The chairman of the headmasters’ union Peter Kuhlmann confirmed April 9 2006:

”… that the new reform of the gymnasium has not tempted more in the gymnasium to choose the scientific subjects. That is caused by lack of well-qualified scientific education in the Folkeschool…”

Welfare and globalization are closely connected problems, the gained sources of finance from globalization is the basis of welfare. An overall solution of the two parts in the Danish reality is the presumption to get any of them solved.

Welfare is almost totally tax-financed transfers and public services in Denmark, i.e. the payments and the services are private rights but the finance is collective.

In other European countries nations the principle of insurance is much more dominating, i.e. also individual financing. Globalization is a new smart word for the international competition. Even where the principle of insurance is leading the development there is heavy considerations of what to do to secure the home front.

Shifting Danish governments have built up the welfare system over a period of 40 years, developed the society further or chosen to dismantle it. By this the country has come in a situation, where we will hit natural stops of financing the welfare a few years from now. Taxation yield cannot finance the welfare, and the rate of taxation, the prices on the export goods and the state debt stops the development also via globalization.

To increase the share on the labour market in order to increase the yield from taxation is one strong side; and strong interests try to make us believe in this one-sided solution. That a much bigger production is needed is simply totally ignored.

It is central to make it attractive to establish new businesses and to extend the part of the existing that are fit for the development with strong international competition and welfare.

The welfare in Denmark cannot be financed, if the country as the country has been structured has to continue to export to get enough income of which the welfare must be financed.

From this starting point the way must be found, regardless what you may have learnt of or misused of John Maynard Keynes’s works and apart from this have learnt of welfare-ideological assumption-logic. There are a few possibilities of choise to adapt, but not a lot, and it is certainly an urgent matter. Export-incomes simply have to be gained. At the same time the total consumption has to be reduced, simply to because there is too little capital in the sector of production.

It has become advantageous to invest the capital outside the production in Denmark or invest it abroad. This implies that more than 594,112 (in 2004) or more than 22 p.c. are unemployed or expelled, cf. table 2 and table 1 respectively below.

Globalization means that the countries outside Western Europe actually have become more able to take over a lot the productions that earlier had been in clover here. Outside Western Europe and USA you do not have a fully developed industrial society, and even enriched or loaded with a welfare system.

The development of globalization has been active since the early 1980s, where outsourcing began from USA. The businesses reflag, establish new firms in Eastern European and Asian areas, where the cost level is substantial lower than here, or the foreign countries start businesses that as time goes by easily drive out the most wage-heavy Western businesses of competition.

The respective governments in the Europe must try to adapt to this reality, even though it perhaps might be regarded as substantial deviation from at least one ideological project, when you look carefully at the welfare and also at EU.

It is not possible to fight against the globalization with other means than bloc and import policy that just postpone the pain for the time being or end up in regimes fare from democracy. EU is such an experiment to restrain the competition from outside. And as EU is an ideological project it obvious continues its rather hopeless battle against the development. The same for all the other ideological conscious. They imagine they fight globalization, that they have completely misunderstood, and they believe the governments in the rich countries have started globalization as an ideological project, if not it must – in their imagination – be the result entirely of the liberalistic way of thinking. It is not. While the economic summit of the world are at a meeting indoor the demonstrations are active outdoor. That the participants in the summit-meeting try to find protection against the worst effects of globalization that developing and the less developed countries actually benefit from is far from understood among the demonstrators in the streets outside. You can also say that the countries that take up the challenge have not yet reached a level of development or dismantling as the situation in most the Western countries.

The fact is however that the swing of the pendulum leads the development to the countries that from their own points of view need development, and away from the West that will develope or dismantle, if no big changes are to take place in the way the responsible think and act in the West. All ideology still harms here.

Farewell to the ideologies – or collapse
Immigration to Western Europe built on an ideology or view of the world: by moving the many poor and oppressed in the Third world to the Western world the problems world wide would be solved, they imagine. That figures, numbers of births uncover the dimensions of the project, and it’s impossible success does not enter the brains of ideologists, because figures and logic is realism – idealism attend to moods, feelings including false sentimentality as the subject to be directed from.

A lot of businesses were/are very much interested in getting cheap labour force in to press the wages to a more tolerable level, the money wages had been forced through by strong unions – often monopolies – while the taxes as never before rose at the same time to make it possible for the welfare-elite to develop its project towards the clouds.

The business interest of lower rates of wage was no ideology, even though the ideological liberal way of thinking rather has to be blamed in another connection as we shall see.

It appeared however that chiefly immigrants without the needed qualifications went to Western Europe from the Middle East, South Asia and Africa. A few coped with the labour market, but the big majority were let in, and just draw extra from the welfare that has been built up without any demand from the ordinary citizens by the Danish ambitious ideologists.

The Danish Welfare Commission has in the May-report 2005 shown that immigrants consume more than three times more of the public budget compared with the Danish relatively to their percentage part of the population. [compare with the Welfare Commission in Boersen December 1 th 2005].

That distribution of ages influences this fact is in a realistic analysis without any relevance to the problem. Even the government has proven this in Denmark (in it’s thinktank the Rockwool-foundation). Much of what was expected from this project has not been fulfilled, compare with: https://danmark.wordpress.com/2006/11/04/six-goid-reasons-to-count-the-immigrants-in-europe-correctly/ eller http://www.lilliput-information.com/economics/seks.html (in Danish)

Immigrants draw 40 p.c. of the social welfare, the earlier Minister of Social Affaires Henriette Kjaer was referred to have reported May 1th 2005: http://www.filtrat.dk. And Aarhus municipality: “58 p.c. of the immigrants on social welfare and alike are unfitted for work – the politicians are upset”.

The liberal wing cannot reject that the imagination about the free movement of the labour force was tried in EF/EU (read details below). It was an ideological miss, an imbalance that has to be rectified, if it is possible. It was however easy to reach agreement with other in the ideological family about this theme. The International has sung the song about people that could settle down, where they were pleased in order finally to hear the trumpets of Jerico or Judgments Day.

But there is always mistakes in the ideological problems. After the collapse of the Eastern Bloc it ought to be obvious to anyone what ideology – every ideology – leads to. But no, now almost incredible numbers of civil servants were employed and a whole so-called industry of refugees grew up. And this automatically lead to tax-payment to all those who had built up the welfare system, to those acting in the welfare system, and to those protecting the unworried continuing of the system from the beginning of the 1980s with a Danish Foreigners’ Law with a jurisdiction extended to whole world and with turned up burden of proof.

In the period 1960-2001: Tax-payments more than doubled, and the state debt was multiplied 9.7 times accounted in fixed prices, the number of helpers doubled while the number that needed help was multiplied with three, and the original population decreased every year from 1968. Documentation: https://danmark.wordpress.com/2006/06/14/top-and-buttom/

In spite of these facts the song sounded that the immigration created employment, and this was what was needed, the ideology-mislead leaders maintained. Latest the song has changed to that we need the workforce, and that is the reason why we have to have more immigrants. Perhaps it should be well-qualified immigrants this time, but the question still is: Where are they expected to come from? We certain do not need employment that further limits the saleable production and the export is my answer.

It was income from export to pay our very expensive welfare system that was needed.

Already from 1968 there was a birth-deficit among the Danes every year[2]. This will succeed in the long run when you have a system, where payments and finance are arranged in a way that they should equalized between the citizens in a lifetime. In the first decade of the 21st century big shares of older people appear because of this birth-deficit, and this big share of elderly come at the same time as the workforce decreases caused by decreased accession. Additionally we have the problem of globalization that actually has become a much bigger hurdle to overcome caused by the many ideological mistakes.

Competing ideologies created a fateful arrangement
In the period while the economy-consideration still were debated publicly among the political selected (until about the midd 1980s) you could frequently hear about e.g. import and export rates as respectively the share of GNP that the import respectively the export accounted for of the total disposal amount.

This worried the responsible, because especially in Denmark we had to import so much to create the necessary export using our skills. Denmark was/is very vulnerable towards inflation. And it came, and it became unpopular at last even among its earlier strongest spokesmen. It was caused by – inspired by John Maynard Keynes’s theory bits – a public surplus-consumption that rised its share from 14 p.c. to 28 p.c. of GNP that was even tripled in the period.[3] Reality showed itself.

We also were expected to understand that the vulnerability of the country has disappeared since we entered EU, that ideological was thought of as an almost self-sufficient bloc a la USA.

The Danish national account is defective caused by ideological fragments, primery originating from John Maynard Keynes’ works, that was built into the Danish national account by Viggo Kampmann. That is the reason why we will not use this account very much. The defective fragments were built in while Viggo Kampmann was a civil servant. Later on he became Prime Minister from 1960 to 1962.

Denmark is a country that from the course of nature has not given us much more to supply than agriculture production in newer times. Relatively late there was however created an industrial establishment that gradually took the lead in the foreign trade and the income after WW2. An effective system of schools and education was just the condition of that to happen.

Then the abrupt radical change came (but put into plans long before) to the total system of education in the 1960, because the task was to built up a tax-financed and ideology-ruled system of welfare and a massive public sector belonging together. A public sector to solve a lot of problems that almost nobody outside the leading welfare-elite had understood they had[4].

An obstinate and persistent propaganda about an idea from 1930s bore fruit. Very well, a better system of hospital-treatment and new schools did not seem the worst. But it certainly did not stop here. The ideology had got off the ground, and ideologies always continue towards the clouds, from where you a aware of that it is not easy to listen to and to look at the Earth.

A small supplement:

The economic reality is that it is the producers in every society who drive the economy forwards, savings is regarded as the fuel of this process.

What the consumers – private and public – give out does not start the economy, but perhaps it maintains the plant. The other thing has never happened, and will never happen. Sometimes we hear economy-commentators report that the expenditures spend on private consumption amounts to a certain percent of the entire demand. We also hear a lot of nonsense about consumer-expectations. To give the reader an impression that almost the opposite is deciding the following is mentioned: In the end the 1920s the private consumption in USA amounted to just 8.5 p.c. of the producers’ total expenditures. I.e. consumption of factors for production was 12 times bigger than the private consumption.

The process of production consists of a lot of complex stages – a lot more today. It is a necessary implication of this that total combined expenditures at all those stages/levels have to substantial exceed the expenditures of consumption. As an illustration you might imagine that total capital apparatus gradually transformed to final consumption; this could just happen in a period of several years (here 12). What has been paid on consumption – private as well as public – originate from production, while production originate from capital included expenditures on factors for production, of which wage-pay is a central factor-pay, that in the first link originate from savings. Therefore, the more savings the more real capital is created and accumulated in order to produce and consume more.

You could accept the following fact:Government expenditures and private consumption do not stimulate, but drain the economy. That is true regardless if you find these expenditures fair or you do not. This is deciding to understand.

The results of changing ideologic treatement can be read
Table 1

Not working outside the working ages in 2004

[The workforce that supply themselves on labour market: 2,867,000]

Outside the labour market
Early retirement pensioners[5]: 269,135
In between early retirement and Folk-pensioners: 205,761
Total: 1,224,331

Source : New from Denmark’s Statistics: No 326, 29 July 2005

Table 2 Not working in the working ages (16-66 years) in 2004

In the working ages 16-66 years
Registred unemployed: 335,000
Clients of social security: 144,000
Revalidents: 26,748
Municipal activated: 49,268
Job center-activated: 19,269
On leave: 7,535
On yield of unemployment: 12.302

Total: 594,142

Source : New from Denmark’s Statistics: No 326, 29 July 2005 [6]

Total tabel 1 og Tabel 2 : 1,818,473

Table 3 Other receivers of public transfers and public civil servants in 2004:Receivers of sickness- and childbirth benefits: 423,858
Public employed: 874,500
Total: 1,298,358

Total of table 1, table 2 and table 3 number of receivers of transfers as basis of living and public employed: 3,116,831 of a population of 5,427,459

To reach the total number of the population the number of healthy employed in saleable production and about 1 mio. children and young ones less than 18 years have to be added, and the number of receivers of sickness- and childbirth benefits in the public sector have to be subtracted, some of the last mentioned and some of young ones less than 18 years are obviously included in number mentioned above.

Public running costs: 771.6 bill. dkr. in 2004 and 801,6 bill. dkr. (budget 2006)
Of this transfers: 336.7 bill. dkr. in 2004 and 375,4 bill. dkr. (budget 2006)
Export income totally: 656.6 bill. dkr. in 2004 and 663.1 bill. dkr. (budget 2006)

Source : New from Denmark’s Statistics: No 30, 24 January 2006
Source : New from Denmark’s Statistics: No 131, 29 March 2006

Just one comparing example:

In Ireland the export income was 7.5 times larger than the public transfers to unemployed, expelled and pensioners in 2004. In Denmark the factor was 1.95. Source: http://www.cso.ie/statistics/expend_social_welfare.htm and http://www.cso.ie/statistics/botrade.htm

Denmark has larger public running costs than export income. Of every dkr of export income 0.51 dkr. is used on transfers, and of every dkr. of export income 0.66 dkr. is used on public running costs, mostly transfers and public wages.

Without further you conclude that the export income that we want to increase in order to make free scope for the financing on home front, is not officially expected to increase in the same rate as the public running costs and the public transfers.

The export is just used as an indicator here, and with this comparison it is relatively easy to compare the figures in this reading with the corresponding results in other countries that have done much better, Ireland, Iceland and the Czech Republic.

With 2,867,000 in the workforce in 2004 distributed on 594,192 unemployed and expelled, 874,500 public employees and about 1,400,000 in saleable production subtracted all in all 423,858 receivers of sickness- and childbirth benefits the society cannot continue to finance the welfare payments and also finance the needed expenditures concerning 1,224,331 pensioners and alike in reality outside the labour market. The last number even increases relatively and not just the intake, but also the workforce itself are expected to drop absolutely.

The official number in the workforce in period 2001-2005 has been reduced by more than 30,000. The official number outside the workforce has been increased by more than 50,000 in the same period. Even more distance between a smaller workforce and a increasing number in the ages of pension is expected. According to Erhvervsbladet 4 Marsh 2006 10 out of 14 Labour Market Councils estimate that the workforce will fall by 8,000 more in the year 2007. The Danish Welfare Commission prognosticated 350,000 fewer in the workforce and 400,000 more in the group of pensioners in the year 2040, if the parameters of development is maintained as today. This implies a budget deficit of about 100 bill. dkr. a year.

6 April 2006 Danish union of Employers reports that 50,000 will leave the labour market as pensioners and alike the next 4 years. Assumed their jobs are not filled by others, this implies a lost of income and lost a extra public expenditure of about 15 bill. dkr. a year in 4 years.

One thing is that the employees are expelled from workforce, another is that the scale of groups of ages is staggered substantial in the future caused by ageing and the lack of intake to the workforce – caused by the low birth rate since 1968, and later on the immigration that demonstrably three times as often as for the Danes leads to receivers of transfers from the young ages in even second and third generation: https://danmark.wordpress.com/2006/11/04/six-goid-reasons-to-count-the-immigrants-in-europe-correctly#_ftn5 , according to the Danish Welfare Commission in Boersen 1 November 2005, and former Socialminister Henriette Kjær 1 May 2005, read below.

In the groups early pensioners cf. table 1 and other not-working in the ages 16-66 years cf. table 2 there were 863,277 of which about 100,000 treatment-demanding mentally ill, prostitutes, treatment-demanding alcoholics, drug-misusers and homeless, according to the Danish Welfare Commission, source: Analysis Report, May 2004, chapter 9.Immigrants and their later descendants in all generations are according to the Danish Welfare Commission represented 3 times as often when it comes to draw on the public sector, and the groups on early retirement also have surplus-representation compared with their share of the population.

The Rockwool Foundation reported in 2001 that 36 p.c. of the non-Western women in Denmark supply themselves on labour market; among the Danish women 72 p.c. supply themselves. I.e. 64 p.c. of the non-Western women are not disposal for the labour market. Of those about 13,000 did not receive public transfers, according to Ritzaus 10 Marsh 2005 (one year later, of course), but the rest received early retirement pension and alike. They are on the other hand underrepresented in the group of Folk-pensioners, and in the receiver group in between, where their share amount to about 10 p.c. against the Danes’ 22.6 p.c.

If we stick to the correction of foreigner account of 25 years on http://www.lilliput-information.com/economics/uscan.html (most foreign foreigners about 13 p.c.), the share of most foreign immigrants and descendants among the unemployed and the expelled: 3 multiplied with about 13 p.c. equal about 40 p.c. This is their draw on the services and the payments. This figure was confirmed by former Social Minister Henriette Kjaer who reported this concerning the social security (cf. above).

[In addition third check of our correction to the number of foreigners in Denmark]

The estimated number of foreign receivers in the working ages, cf. table 1 and table 2: not less than : (594,142 + 269,235)*0.40 = 345,351

I.e. not less than 345,000 of the receivers of transfers in the working ages were immigrants and their descendants in 2004 [today more like 100,000 more], and 458,000 were Danes.

Increased saleable production and export – the system of welfare reformed
If the welfare as we have known it for 40 years, shall be preserved, the country necessary has to be prepared for the reorganization towards the strong international competition globally. The immigration is the liberal and international ideological part of. Therefore substantial changes have to be introduced. These changes must perhaps be bigger than changes from vegetable to animal production in the last half of the 1800s under the European agriculture crisis.

In reality the crisis then arose caused by the carrying capacity of American rails made possible by the new processes of performing hard steal. The freight rates a ton dropped immense, and lead to an advantage of competition for the American grain coming far away from the Midd West finally to be supplied in Europe at substantial lower prices on both bread grain and feeding grain. This had nothing to do with ideology. It was simply an invention. The PC was also an invention.

It will be almost impossible to make changes among the politicians as the VKR-government accepted the ideological welfare policy already in 1968, and also because no politician will risk his skin, and everybody knows it might be their turn to take responsibility of necessity after a change of government.

Therefore all will participate with small bits and aim at that the others to face the music, when the projects as here have long-term impacts. In addition more than 60 p.c. of voters are employed by the public, sent on daily benefits or social security.The system then continues until it dissolves itself – precisely like other ideological projects – or are stopped by the creditors.

You might expect small adjustments without any real impacts in the political space. And this will with mathematical certainty lead the country directly to the state’s bankruptcy, where the welfaresystem shall being abolished randomly stick by stick, when we assume that the war does not come, before quickly increasing deficits on the public budget are realized. At the same time we will experience falling export incomes, and the outsourcing will increase further caused by the neglected tax-decreased, even quicker wastage from the workforce coming from both the increase in the group of pensioner, the expelling from the workforce, and the lacking intake to the workforce in the other end.

The ideologists will continuing maintain that peace and no danger are ruling, and the last 20 p.c. will never discover/admit anything has happened, even after the war.

Nevertheless it must right to point at some ways that could save the system that a lot of people have got used to is ruling, and that among other things decide their rent. Some of it must be suggested dismantled, because the development has shown that it does not have the impacts they used as an argument including the benefits that was assumed when the system was arranged.

When it is officially maintained that the purpose of the ongoing (May 2006) agreement attempts concerning the welfare-negotiations unbalanced should be to get more individuals into the workforce, then it will just effect the yield of taxation in upward direction, and at the same time even increase the incentives to accept more immigration, i.e. and inflow at a higher speed.

Well then, the questions of globalization and of welfare has not been linked. This will undoubtedly be fateful. More tax-payments to finance the welfare do not solve any of the problems fundamentally. The complex of problems is even getting worse, as we shall see. Perhaps the catastrophe is being postponed a little, and this is in every case almost the longest engaged professional politicians a prepared to go in the thoughts and actions, when something big has to happen in their world building mostly on party loyalty fare from reality.

Let us take their words for granted: More to the workforce, i.e. more who supply themselves on the labour market than today. Does this implies more jobs in saleable production, or does it imply more public employed (is to answered below)

Areas of problems

1. Childbirths in Denmark:

a. In average the first child is born about the mother’s 28th years – hereafter we are in difficulties to get more children.

b. 15-20 p.c. of the women of age 40 in the Western countries have no children – this figure has increased substantially.

c. The number of abortions has recently risen again to more than 15,000 of a birth cohort of 68,000-70,000.

As b. concerns it is distinct characterizing for original European being unemployed or expelled from the labour market that they don’t dare to bear children.

2. Immigrants

3. European directives and recommendations

4. Welfare arrangements, generally

5. Educations and research

6. Income-tax reductions

The taxes have to cover the public expenditures. With increasing intake to group of more than 65 years old, and still fewer in the workforce caused by lacking childbirths and the expelling from the labour market it become impossible to get the yield of taxes to cover the public expenditures. Already in 2010 a deficit on budget of 40 bill. dkr.

If the taxes are increased, the total tax-base of which the taxes are accounted from, and also included in, will be decreased, because the saleable production and the export go down caused by the worsen status of competition.

This might seem like a problem corresponding to squaring the circle, but it is no, as the circle and the square has nothing to do with ideology.

The system of welfare in Denmark built on services and transfers as private right, but arranged with collective financing, so that the originators of the project imagined that individuals of the society should receive a little more from the society than they actually paid in taxes. This was of course nonsense, because the public cannot give you anything, before it has collected it via taxes[7], printed too many notes or borrowed the money. But we skip this detail. We look at the impacts of the way of thinking among the political leaders, and we try to give some instruction of where the system must be cleansed from ideology.

All welfare-ideology, liberalism, internationalism, keynesianism, Europeanism, all ideology must be removed from the ruling Danish welfare-system.

1. Childbirths:

It could given a try to effect the age in which the first child is born and effect the the number of women who give birth – “without sending the women anywhere”.

By the number of children could eventually be increased. The proposal from the government about varying transfers to individual in the education system could perhaps have an effect, even though the proposal in the open was made to increase the number of tax-payers by stimulating the students to finish the education earlier. When we know that a substantial but unknown amount of grants/scholarships are paid to young ones who speculate in these payments, and often change their study with pleasure to maintain the payments, you could say that the arrangement have the same effect as supplementary social security in a number of cases. Some new regulations are not expected to be without effects here, perhaps more is needed (read below).

One proposal of how the number of childbirths can be increased among unemployed and expelled individuals of more than 30 years of age, is to transfer a public payment according to the difference between their present payment and the lowest wage on the labour market for five years, when they give birth to their first child after the mothers 29th year. The payment is effective for both parents.

Total expenditures in connection with abortion that does not have medical or criminal indication must be collected from the miscarrying herself or from the father to the child.

Public measured out and assigned gifts to families with children do increase the incentive to give birth among childless, or gifts to elderly or other marginal groups of voters who could threaten a coming election. This does have any other

explanation than distribution-political causes. In Turkey and Thailand they distribute kitchen-machines before the election. There is not much difference. All these public assigned gifts must re-arranged to lower taxes, that increases the demand for the workforce in an increasing saleable production.

2. Immigrants

When 40 p.c. of the unemployed and expelled in the working ages in Denmark belong to a part-population that amount to 13 p.c. totally, it is difficult even for the Danish Welfare Commission to find solutions to financing-problem for the welfare system by manipulating this very large part of the problem in 2006 after 25 years of mass-immigration to be a central part of the solution to the problem in the future.

In other of the government’s thinktanks it is much easier to do so.

The immigration still increased from 11,369 new in 2004 to 12,644 new foreign citizens in 2005, of which 9.730 came from areas outside Western Europe, North America, Israel, Japan, Australia and New Zealand.

2006 Free immigration:
No doubt, the liberalism will also have concessions after the international has harvested the most of yield from immigration for the last 25 years:

Already before the election in 2001 a so-call green-card-arrangement was introduced. It implies a maximum tax rate of 25 p.c. of the earning for the first three years for foreign, high-educated key-employees. With this taxation the concerned get the same rights and the same admission to the public financed Danish welfare as the Danes who of course must pay the full price. Even such a high price that our saleable products cannot be produced and sold in sufficient amount to finance the welfare in the future. So, you see the leading figures certainly do know what is wrong
Documentation: http://www.workindenmark.dk/ Taxation/0/1/0

The arrangement has shown itself not to have the intended effects. The reason must be found in the fact that the qualified began immigrating to USA and England in the beginning of the 1980s.

In the spring of 2006 a new arrangement is being introduced that permits immigrants without further to cross the border to Denmark and look for a job for 6 month, without any formal application. Uncles, cousins, brothers-in-law are already here.

With Danish voters NO by referendum twice to more EU the Danish politicians compete to secure that Denmark accept the coming EU-rules beforehand:

3. EU-directives and recommendations

First step

Interior market 1986 with four freedoms, where products, services, capital and workforce could move freely between the member states from 1. January 1993. All EU-citizens.

Second step

Schengen co-operation was decided in 1985 and lead actual to co-operation with Amsterdam-treaty coming into force 1 May 1999. Every border control inside EU was removed. Citizens from other parts of the world in principle got the same right to move around freely. Common minimum rules and regulation of immigration must secure that one member-state not just transfer its burdens to the other member state.

Third step:

25 November 2003 where EU-directive was decided: about status of the third-world-immigrants as residents after five years unbroken and legal stay in EU were given free movement in EU too.

Next step

11 January 2005 EU-Commission published a so-called greenbook about the method to manage the economic migration (between member states with e.g. different economic policy) in order to get common rules. A point of view that was strengthened two month later by the publication of another greenbook with the title: ‘Demografic changes – need for a new solidarity between generations’.
7 November 2005 the Commissioner for Justice and Interior Matters, the Italian Franco Fratinni, a USA inspired Green Card-system that gives high educated from the whole world the possibility to gain access and permission to work in all member states.

In need of common EU-immigration-policy

Tammerfors-declaration 1999, point 18:

The European Union must secure a more justice treatment of third-world-citizens who have taken legal residence in EU. A more effective integration-policy that admits rights and duties that can be compared with those of EU-citizens, and it continues with a Holy Hymn about racism, different treatment, economics, culturel and social relations.

A directive in the summer 2001: About conditions for third-world-citizens’ entry and stay in connection with employment as employees and practicing independent businesses.

Marsh 2004: EU-Directive about the conditions for third-world-citizens entry and stay in connection with studies, other education or apprentice, also called the students’ directive.

A directive: October 2005 the Council decided a directive about special entry-procedure for third-world-citizens in connection with scientific investigation and two other recommendations.

How to go on:

A road map with initiatives to be proposed in the period 2006-2009.

According the refused EU-Constitution (section 51-54) a decided road map meant that the politicians in the member-states practically were not independent as the Danish Constitution strongly presupposes they definitely are in it’s section 56. Practically a road map meant/mean that the politicians were/are bound by this road map declaration, and that they even had/have to work for the realization of the scheduled decisions, and certainly not decide otherwise in their national legislation until the final decision could be made.

The solution is not difficult to see. It just assumes to overcome the ideological scruples. But this task perhaps cannot be overcome before the light has been turned off over Europe.

4. Welfare arrangements, generally

The arrangement for transfer-receivers in between early retirement and Folk-pensioners was introduced with an argument that hard physical worn-out on the labour market created a need for early gradually transition to the a pensioner’s life, and in addition it was maintained that this arrangement would substantial reduce the unemployment/expelling among young ones. The arrangement has especially been used by school teachers, pedagogists and library-employees. With increasing duration of life and an transition in progress to generally lesser physical demanding work, the arrangement has become a general early retirement arrangement that already exists.

It benefits to increase the age-limit for folk-pensioners corresponding to the projection of the longer life time.

Public finance of cancellation of debt to unemployed and expelled to make it worth to earn money again will certainly be useful. Especially in country where you are heavily run down, if you loose your job and have debt at the same time.

Different leave arrangements that e.g. give freedom for parents from work in about a year just make the production more expensive without any other ideological aim/need is satisfied. That small businesses do not dare to hire young women in the birth-giving ages must be understood. They almost have to hire and pay for two to get one.

5. Educations and research

are extremely central to get arranged realistic. Ideology has replaced teaching in disciplines of tools and of basic skills. It is quickly becoming a catastrophe.

In the areas ‘education’, ‘health’, and ’social care’ 630,000 or 22 p.c. of the total workforce employed in 2001 (according to the Danish Welfare Commission). Precisely how many in each of three sectors and the distribution between kinds of institutions and sizes measured by number of clients, pupils, students, patients is not available information to throw light on. Taken into account that the area has more than doubled since 1960, even accounted by the percentage it takes up of the total GNP we have to have this kind of informations, that might make us able to account some measures of productivity (achievement divided with the amount of resources) and measures of effectivity (objectives related to resources).

Primo April 2005 DR-text-tv reported that education of the children amounts to 30 p.c. of the working hours of Folk-school teachers: This situation has been prepared and created by lots of changed school laws and the union’s agreements of common consent for more decades. It started much higher, not by chance, and was continued for 40 years in Denmark by both liberal and formally more socialistic originators as useful political marionets. It started with basic values of life that had to be changed. The parents was not fit for upbringing, if they did not accepted ideologists’ values. Later on we had to hear the excuse that the pedagogists and the teachers had to take over the upbringer’s role. The parents were actually not fit, if they had not attended a targeting course organized by the knowing masters of mind control: http://www.lilliput-information.com/economics/revo.html (in Danish). The whole history: http://www.lilliput-information.com/economics/engeune.html
(in English) and http://www.lilliput-information.com/economics/wu.html (in English)

Now you perhaps better understand why Dutch 9 years old school pupils are educated twice as much at half the costs. Or take some other areas: About 10 p.c. of the students drop out from the higher educations, and the yearly intake on the engineer educations in Denmark has decreased with 50 p.c. from 1985 to 1995[8].

Without detailed accounts of distributed resources and individuals you cannot exposure the problems. 11 April 2005 TV2-News reported that 57 p.c. of the Folk-school teachers who teaches in the subject ‘Danish’ had not chosen ‘Danish’ in their education on the college of education, and according to this 97 p.c. of those who teaches in the nature subjects and subjects of technology the same. The most demented is that we did not get this information long before the school actually broke down. That pupils learn the ideology is a central part of the basis evaluation to find out which pupils who are doing well, and who are doing unsatisfactory right from the kindergartens and the Folk-school.

Knowledge and competences must be brought in front:
If Denmark shall have a chance in these years with reflaging, there have to concentrated whole-hearted and consequently on knowledge and competences that can bring us in front in Western world. The workforce to take care of the growing elderly-part in the population will never become a problem. The second most dangerous development we witnessed for two generations now is the teachers’ – especially in the upper secondary school (gymnasium) – reproduction of their own irrelevant competences that mostly are not business-relevant at all, if we shall survive as civilized nation. It is not better in the Folk-school, but here we have to concentrate on Danish, English, German, mathematic, biology, economics, data and history, because it is not possible to replace large parts of the teachers’ staff here, and at the same time find a development-carrying substitute that will make the pupils fit for a new the upper secondary school.

The means to rectify the imbalance in 3-5 years are in the comparative advantages that Denmark should have utilized on education area at once in 1960s instead of letting young unknowing people decide, where to go with everything using other people’s money with good help from some of the so-called modern teachers in the upper secondary school. We have to import relevant education systems and textbooks (eventually translated them) from Ireland, Holland, England, Germany and USA, and perhaps hire a few teachers from these nations to key positions here.

USA began to tackle the questions of globalization action oriented already in the beginning of the 1980s: http://www.lilliput-information.com/economics/curint.htm. England did the same.

Ireland’s production was half of the Danish production in 1970. Today Ireland’s production per inhabitant is 10 p.c. larger than the Danish.

Regardless if we shall see the welfare system break gradually down because of impossible finances, perhaps with a last grasp for inflation formally outside the Euro-zone, and just for as long EU has not stopped it, we can expect more cheap import products with an education and research sector, where 2 of 3 educated still turn their eyes towards the public sector in a country where a steady growing part of the population refered to public assigned transfers as their conditions of life. Exchange of products and factors included knowledge with the wage-light areas will be topical for years to come towards the end.

A long row of the humanities educations must simply have a very low or no intake of students. And if it cannot succeed to break down the ideology on what the free choice of education leads to after years influence from teachers in the upper secondary school, there have to be introduced an education-duty corresponding to the total costs of education and a stop for assigning public grants to education that will not give any employment in the saleable production sector, and just by natural resignation in lot years to come.

The public financed grants could be removed and replaced by loans, just like a duty might be introduced to cover the total costs. Grants and so-called free education is generous and unequal, partly because a lot of educated do not get employment with their choice of education, partly because those who do not take a higher education actually pay for the education that even pay off a substantial higher wage. You can just give reasons for this by including élite-thinking. At the same time our plants of production are being consumed to it’s own destruction or reflaged away.

The repay of the private costs of education might follow an annuity loan of 20 years’ duration[9].

6. Income-tax-reduction

The wages have to be reduced with 30-35 p.c. [10]. The income tax can be changes to a kind of source taxation, when it come to wage a proportional wage-tax collected directly and finally at the source as an wage sum tax, paid directly by the employers, primery to remove the tax control[11]

The yield from wage sum tax has to be reduced with an amount corresponding to a available wage increase of about 2-3 p.c. The coporation tax must be reduced at least to the Irish level, and this could be the only tax on businesses. The different contributions on the wage-pay slip apart from pension savings are being gathered after a reduction with 50 p.c. in one contribution to an indiviualized education foundation.

All daily benefits, transfers, supports and pensions must be paid as tax free amounts.

This will imply some public budget deficits the first years, but as the arrangement attracts a lot advanced businesses the drop in tax yield will fully be replaced within 10 years, because capital will be injected into production sector, the opposite of what is happening now, where it is drained to the last drop of capital, and therefore clear out looking for cost savings. The result will be a dominating sector of knowledge based production with high educated and well-paid employees.

A lot new business and an increased production in the existing businesses are the results. This will automatically draw the workforce into employment and create purchacing-power to so-called welfare . Here the turning of world in the universe is followed. That a mental turning of the pole also is needed nobody shall doubt. 40 years with the pyramid turned upside down by ideology.

“Now back to reality” we might call this project after 40 years in Danish Utopia.

6 May 2006
M. Sc. (Economics) Joern E. Vig


[1] To start with they were operating with a weak deficit-budgetting that citizens experienced the first 10 years, where the inflation gradually increased substantially, and the lending rate rose to about 22 p.c. in 1979. Notice that the welfare system came to the first test in this decade, where two oil-price-chocks hit in 1974 with more than 400 p.c. and in 1979 with less. They were called the reasons to the mass-unemployment from 1973. This definitely was not the truth.

[2] 2,05 – 2,10 child a woman is needed to overcome the infant mortality and the reproduction to secure a stable population in the Western communities.

[3] I addition the transfers amounted to 20 p.c. in 1960 and 44 p.c. in 2001 of GNP; the last mentioned percent even accounted on the basis of tripled GNP – the triple is partly unrealistic as the ideology was built into the national account e.g. so that public consumption was artificial transformed to be production instead.

[4] The number of employees in the public sector rised from 406,000 in 1960 to 844,000, 874,500 or 925,410 in 2004 (of a workforce of 2.87 mill in 2004). The number differs depending on if you look at the different accounts of the state published by http://www.dst.dk or you look at the account of ATP-foundation.

[5] How large a share of this group that actually is fit for the Danish labour market or rather belongs to another labour market that they have left is not easy to spell out and publish information about via the available public statistics.

[6] This was the coherent social statistics from mentioned source. In New from Denmark’s Statistics nr. 22 of 2 February 2006 the unemployment is reported converted to fulltime unemployed from 573,100 in 2004 and 543,100 in 2005 that converted allegedly amounts
to respectively 176,400 and 157,400 fulltime unemployed – here counted as unemployed members of unemployment fund.

[7] To start with they were operating with a weak deficit-budgetting that citizens experienced the first 10 years, where the inflation gradually increased substantially, and the lending rate rose to about 22 p.c. in 1979. Notice that the welfare system came to the first test in this decenium, where two oil-price-chocks came in 1974 with more than 400 p.c. and in 1979 with less. They were called the reasons to the mass-unemployment from 1973. This definitely was not the whole truth.

[8] E.g. mathematics of vectors that is the basic of electronics and advanced physics was abolished already in the beginning of the 1980s in the upper secondary school (gymnasium) with reference to that the recruited pupils in the upper secondary schools found the subject too difficult. Now you do not find the Danish word ‘vektor’ in the dictionary when you will try to translate from Danish to English.

[9] It was fateful from the start to give free entry to the educations, and even do so by letting almost all the costs of education be tax-financed. In UN the answer to the public U-90-report from 1960s: ‘You must be able to afford it’. There is a chance to get rid of this ideology-element now, but it will certainly meet tremendous resistance among the young ones who understand this element as a well-acquired right, almost limited to a nature law, even though it has been ruling just on the cost of the other half of the population that do not take a higher education.

[10] Not in order to compete with the wage-light areas about the wage-heavy productions, but because our products are too expensive to be sold in sufficient amounts to repay the statedebt and at the same time create new job in the sector of saleable production. This is the task.

[11] It has been proven more than 25 years ago that all progression in the taxation scale depending on height of income has no meaning. The progression is being fully equalized by larger deductions in the income from which to calculate the tax.

7 kommentarer »

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