Kagey

I read this morning that Ian Duncan Smith has jumped on the criticisms of the Benefit Cap that will limit the amount available to the families of the un-employed. Claiming that the principle that it should always be more rewarding to work than claim benefit is one that everyone will support.

However it suggests that claimants are exercising a choice over whether to work or claim benefit, to in IDS’s words ‘work hard and commute long hours’ or presumably sit on their arse’s watching daytime TV. As if £35k jobs were in abundance! I’m sorry but it’s the same old nonsense and distraction that runs well in the tabloids. It sets people against each other to obscure what lays at the heart of the problem; how money is created.

The Benefit Cap is about moving the un-employed out of high value city centre properties to reduce costs as the house price bubble that has continued grow even in tough times shows no signs of shrinking and bringing relief to the government’s Housing Benefit burden. It is however a burden of their own making.

Why do property prices continue to rise when it’s plain that prices have moved beyond many people’s ability to buy? The answer has less to do with demand and more to do with where the money comes from in the first place.

The modern banking system has developed in such a way that 97% of all the money in the economy is created by Private Banks. You’d be wrong if you thought the Government or the Bank of England creates most of our money as the BoE prints around just a measly 3%.

What’s more banks don’t need to actually have the money you apply for to extend you a loan or a mortgage. The bank just creates digital money out of thin air for you to make your purchase albeit a car, holiday or a home. It’s simply a matter of creating numbers in your account.

As banks control how most of the money in the economy is used they inevitably choose the safest bet. Property for the banks is a no brainer… Simple, automated credit checks enable decisions to be made quickly and if in the end the borrower can’t meet the loan the bank can repossess. Consider for one moment the position of the bank in this scenario. The bank created the money for your mortgage out of thin air but if you can’t keep up the repayments they get the very real asset that was your home!

In the last decade the money supply created out of property debt has ballooned dwarfing the money available to the productive economy. While banks have fuelled a property price boom the money made available to businesses continues to be rationed.

For years we have been fed the myth that rising property prices are beneficial, creating wealth, jobs and a sense of wellbeing. Looking around it’s not hard to see why we’ve been robbed. As property prices rise, essential but marginal businesses start to disappear. When the value of the village bakery is distorted by what it could fetch as a country home it soon becomes history together with pubs, petrol stations and independent stores. In towns, workshops and small industries disappear along with anything else that is more valuable as residential or commercial property. Historic places of work like wharfs and canal side workshops become ‘waterfront properties.’ Rising property prices are as destructive of community as they are a sap on the productive economy stealing places to work and marshalling money away from the things that generate real prosperity and diversity.

In the past a blend of social and private housing ensured that even in cities there were necessary homes for key workers and the low paid who helped to fulfil necessary functions. Today, the Benefit Cap is just another step along the road that Margaret Thatcher began with the sale of Council Houses; from mixed communities of incomes, skills and backgrounds to segregation along the lines of ability to pay, to convenience for those with money and increasing commuting for those who can’t.

The power to create a nation’s money supply endows the Banks with tremendous power and it is clear that they influence many government decisions including financial regulation. The banks have acted in their own interest for too long and clearly in way that has created many distortions in the way things are valued. Government cannot scapegoat scroungers, the work shy unemployed, immigrants or whatever else they can dream up to cover the reality that they are complicit in a allowing private corporations to create our money.

There is an alternative way and I would urge you to begin to understand the monetary system… it’s not as complex as they would have you believe. For real change to come about depends on how much our current government has vested in maintaining the status quo … the level of privilege, wealth and connections in the current administration suggests that change won’t come easy!   Ken Finn

Read/View/More Info

http://www.positivemoney.org.uk/

http://www.neweconomics.org/

Taking Peston to pieces on tax.

George Monbiot reported on a tax heist by this government which was dissed by the BBC’s Robert Peston… The above is a good rebuttal

The original by George, ‘A Corporate Coup Detat’ is a compelling read – Read it Here

 

I’ve started seeing more DVLA ’don’t pay your tax you don’t use your car’ wheel clamps on the street.  There doesn’t seem to have been much of an outcry at this rather draconian response to non-payment of road fund licence. Surprising since following a clamping the DVLA move fairly quickly to crushing the vehicle.

The motoring organisations seem to support this heavy handed approach taring all non payers as criminals who need to be removed from the roads and or society. In days gone by I can imagine being in the situation of being without the cash to tax a vehicle but having to use it till the money comes in. An offence perhaps but does this kind of poverty warrant the seizure and destruction of a vehicle and further impoverishment?

And what is the natural progession of this kind of ‘name and shame’ justice? How about non payment of council tax, will offenders return home to find themselves barred from their home? Will they have days to find the cash or see their home auctioned to pay back tax and charges? It seems possible.

Mostly the people who clamour for such measures are the least likely in society to ever find themselves prey to the attention of a ballif. If they only knew!

Not so long ago I rented my home to someone who should have paid the council tax as part of the agreement, but he missed a couple of payments. He paid the arears but it was too late, the debt had been placed into the hands of the council’s debt collection agency. I became involved in an attempt to resolve the situation but I quickly realised that I was actually dealing with licenced extortionists. A £300 bill quickly became a £500 bill and rising! The baliff was little more than a bad mouthed thug with the legal right to enter my home and remove anything of value and all the time the bill got bigger. He made his point very forcefully that unless he received money he would be back to seize goods whoever they belonged to. It was a nightmare.

Thankfully I identified a legal error in their proceedings and was able to stop them in their tracks but it was a close run thing.  And as there was no outstanding monies the case was closed.

It was an education in just how frightening debt can be and how unjust the system is for people who find themselves rightly or wrongly in the ‘recovery’ system. It’s also an example of how errors are made and how devastating the consequences can be.

It made me realise just how without compassion we have become for those who cannot afford to keep up the payments.