[mschuster91]

> Why do people need to receive hundreds of thousands of Euros for children daycare?

It's not about "daycare", it is about assisting families in the (massive) expenses that raising a child incurs. Why? Because unlike the American pension system which is mostly backed by the stock market, European pension systems depend on young and healthy workers to pay the pensions of the current pensioner generation.

Obviously this has the advantage that stock market crashes won't wipe out a whole generation's pensions and that the stock markets are not inflated artificially by enormous amounts of "dumb money" being loaded into anything that promises a profit (which is partially what caused the 2008ff crisis), but it has the disadvantage that society has to really take care of not falling into demographic traps.

[Kaotique]

I think you misunderstood me. I am not saying they don't deserve support. I am saying that the government can support people in a way that is not so bureaucratic. Pay the institutions like schools, daycare, etc directly and don't burden the parents with requesting benefits and sending around enormous amounts of money. The institutions can apply for government money for each child they have to take care of. And the parents can just go to work and not move around swats of money.

On of the examples in a mother with 3 children who had to pay back a hundred thousand Euro that were classified as wrongly received benefits. That means she received tens of thousands of Euros per year! What an insane burden to put on mother.

If something goes wrong the consequences are gigantic. Just like it happened in this scandal.

[Beldin]

> That means she received tens of thousands of Euros per year!

I'm writing this from memory, so it may be wrong, but as I remember it: parents would receive "modest" support; a much larger part would go directly to the daycare, outside of the parents' view. Now if the daycare was deemed to be illegal/fraud/..., the parents would be on the hook for both the money they received as well as the money the daycare received.

Again, I may be misremembering - but this is definitely one way to put a mom into 100s of thousands of debt that she'd never seen.

[VBprogrammer]

The British "tax free childcare" system seems to be setup specifically to make it as hard to deal with as possible. My partner mostly deals with it but essentially you setup a weird bank account through which your childcare provider collects their payment.

[em500]

There are a few more reasons that I don't have time to delve into right now. But the main practical reason is that government assistance for daycare is very income dependent, so government paying directly to the daycare would require giving them parental income information, which is a big privacy no-no.

[pessimizer]

> the main practical reason is that government assistance for daycare is very income dependent

They should stop doing that. The wealthy pay more taxes, so refund them as free childcare. If you think the wealthy are getting away with something under a universal entitlement, raise their taxes.

[mrep]

I'm guessing he means have the government pay for all daycare for everyone fully and just pay for it from tax revenue generated by a progressive income tax.

[orwin]

This is why I really dislike social solutions that involves money. I understand that you have no choice but to use money in a developed economy (because if you just give services, it doesn't count toward GDP), but this is peak 'indicator became the target' dumbassery.

[BlueTemplar]

> (because if you just give services, it doesn't count toward GDP)

And considering GDP as the most important metric isn't peak dumbassery ?

[harvey9]

Who would give the services if there is no payment? Are you talking about a barter society?

[iggldiggl]

> but it has the disadvantage that society has to really take care of not falling into demographic traps.

Does it? Or is it just that the demographic issues are more readily apparent?

You can't eat the stock market, so you can accumulate as much wealth as you want in stock market-backed pensions plans or otherwise – if by the time you want to retire there aren't enough working-age people left around willing to provide you goods and services, your pension scheme is worth zilch.

[nullc]

> Why? Because unlike the American pension system which is mostly backed by the stock market, European pension systems depend on young and healthy workers to pay the pensions of the current pensioner generation.

Using investment returns to pay for retirement is no less dependent on young and healthy workers. Us retirees own the companies, working people work for them, and we skim the returns. It accomplishes the same thing but with less central planning. It's still vulnerable to demographic traps.

[Cthulhu_]

In theory, the Dutch pension system is ALSO backed by the stock market, which is why they will cut down on payments if the stock market isn't doing very well (according to their own calculations). The more I hear about things like that, the more I'm inclined to just handle my own pension fund. But that's where things get tricky, because an employer's pension contributions are tax-free, if they were to be paid out, income tax would be charged on it.

[jacquesm]

The way I deal with this: make a good profit, pay myself a decent salary and the remainder as dividends, invest those in very low risk asset classes myself. It isn't quite as tax efficient as a pension scheme would be but the chance that the money will be there when I need it is about 100%.

[ChuckNorris89]

>Why? Because unlike the American pension system which is mostly backed by the stock market, European pension systems depend on young and healthy workers to pay the pensions of the current pensioner generation.

Which IMHO the European pension system is massively flawed as it's basically a Ponzi scheme that requires more and more people to keep the system going, more people that will consume more resources and need more real estate to live in, real-este which governments and banks have turned into a speculation vehicle making them unaffordable for the new generation of young people who are supposed to be many and pay into the system.

[BlargMcLarg]

The real problem is everyone wants to rely on the current working population, especially the middle class, despite it being evident the middle class is doing progressively worse. You don't need to pump the population numbers year after year if retirees can accept they'll be a little worse off relative to the younger generation compared to their ancestors, for example. Instead, many retirees expect the younger generations to carry the full burden and figure it out on their own.

Add to that several other problems in NL in particular, and you have a recipe for disaster. One of the main reasons people with a median income have huge trouble finding a decent place to live.

[peoplefromibiza]

> Which IMHO the European pension system is massively flawed as it's basically a Ponzi scheme

flawed, maybe, it is actually been good for people that strted working in the 50s-60s, but a Ponzi scheme?

I don't see the connection.

Most pension systems in Europe are in balance and have no problem paying the pensions, the only real problem is that the population is growing older but people get their first job much later in life and the age of retirement is not advancing at the same rate of the aging of the population.

Many pensions in my country are contributing to the economy of the family, so they are not going into the pockets of some old grumpy grandparent that lives on the shoulders of the younger generations and spend 9 months/year cruising the Mediterranean sea, having breakfast in Venice, lunch in Split and dinner in Crete.

> real-este which governments and banks have turned into a speculation vehicle

real-estate is mostly a cost in Europe, unless you have a shitload of money.

[rocqua]

In my current pension plan. If Right now everyone stopped participating, the pension is setup to be able to pay-out all currently outstanding pensions in full. There is of-course some variance in the interest rates attained, and the actuarial factors (how long people live) which mean that in reality this might not be the case. But the Dutch pension system is very much setup to _not_ be a Ponzi scheme. Money I put in is earmarked for me. The only 'collective' situation is that if there is a shortfall some of the money earmarked for me can be used for others. But such shortfalls are rare. Especially because there is 'slack' in the system to catch a shortfall not by touching my money, but by not (fully) compensating inflation.

[BlueTemplar]

Sure, but using this logic civilizations themselves are also basically Ponzi schemes.

[djbebs]

Its about gathering power to the institutions and bureaucrats that work in them.

Anything else is just an excuse to get higher budgets and grift.