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SA – Thanks for this; I am waiting for the implications of this bombshell NHS shakup to perculate a little before I comment further. I am part way through reading the Book 99% by Mark E. Thomas to the point where I am painfully aware of the consequences of doing nothing to change the political trajectory that I fear will be held very firmly in place by the Tory Sovereign Dictatorship led by Boris Johnson. Thomas’s book elaborates on warnings spelled out on the 99%.org.uk Website that continued neoliberalism and further austerity policies will massively increase inequality thereby creating mass impoverishment in the UK just as it is doing in the US. There is no acceptable reason why in two of the richest countries on earth destitute people should be sleeping on the streets and relying on foodbanks to feed their families despite being in work. This was my Valentine’s Day wake-up call for us to demonstrate genuine love for our fellow citizens, especially the children. Beyond the horrific toll of misery and hardship that this grim political choice offers Thomas warns that this level of selfish exploitation is patently unsustainable for civilization to maintain beyond 2050!
Prior to the Covert 2019 Rigged Election I was filled with hope by the Labour Party’s categorical rejection of the austerity agenda and the exposure of these cruel policies as a sadistic political choice that had cost 120,000 lives during its implementation. There was genuine hope for a radical change of direction, shattered by the ‘borrowed votes’ lies that accomplished the corrupt result of a stolen Tory ‘landslide’ that still demands full Investigation to correct the injustice. We are being forced to accept further ongoing corruption with the reckless squandering of public funds to enrich the wealthy elite. In the Vox Political Article entitled, “The richest UK citizen doesn’t own any money; it all belongs to the government,” Mike Sivier explains and tries to answer the question, “Why do some people cheat with it? This is not a bombshell, it’s very simple economics. As Richard Murphy explains in this Video; money has no value in and of itself.” Other vital information from Richard J. Murphy at Tax Research.org about economics can be accessed Via this Link.
Sivier explains how at one time our currency used to be valued, “…when the United States applied the Gold Standard (meaning the Dollar was worth its value in gold), but when the States had trouble funding the Vietnam War, Richard Nixon put a stop to that.
The Pound was also tied to the Gold Standard, because it had a fixed exchange rate with the Dollar, but that all changed in 1971. The value of our currencies became fluid, attached only to the promise by the Governor of the Bank of England, a government employee, to pay the bearer, on demand, the sum printed on the front of our banknotes and coins. That promise, in turn, is only worth anything at all because the government refuses to take our taxes in any form other than the Pound. That’s why we do all our trade in the UK using the pound; because if we didn’t, we would have to put our cash through an exchange system, possibly with an adverse exchange rate, before paying our taxes.” He asserts that, “tax is important because it stops our money losing its value.”
Sivier reports what Mr Murphy explains so well in his Video clip, “Governments create money. They must also destroy it, otherwise the system fills with too much of it, meaning we have to pay more for the goods it buys, and we get inflation.” He then points out that, it occurs to him that this must mean that, “certain people are screwing up the system for the rest of us.” Sivier encourages us to view the video to better understand his assertions. He asks the question, “What about people who hoard up their money in tax havens and refuse to pay it back? I’m referring, of course, to the super-rich. They seem to think that the cash they have accrued is theirs; it isn’t. It belongs to the government, no matter whose bank account holds it.” He reminds us that our money, “was created for a purpose, and the government sets tax rates in order to recover it after that purpose is achieved. So it follows that anybody avoiding tax is deliberately sabotaging the government’s plans.” This is a very interesting perspective that alludes most people.
Sivier then asks, “What can a government do about it? Well, as we’ve seen with the Tories, the most common choice is to do nothing and let the greedy fatcats keep their ill-gotten gains. This, in turn, must have an inflationary effect as not as much cash comes back to the government as intended.” So he asks, “how would a government deal with that? It would tax the rest of us, those who have no choice but to pay more.” Sivier concludes that, “So it seems to This Writer that you pay taxes for the super-rich who avoid paying theirs.” He asks, “Do you think that’s fair?” We should then contemplate the worst consequences of the Tory agenda of protecting the wealthy as this rampant inequality has inflicted inhumane suffering on the poor which Sivier refers to in a recent report in an earlier Vox Political Article entitled, “The ‘shocking’ part of this report is that it was so easy for 1.3m children & babies to fall into poverty” He says, “Family poverty skyrocketed under Tory policies of benefit denial and wage depression.”
Despite the horrendous damage of Tory ideologically driven austerity, in a cruel twist of fate, Sivier claims that, “Now they can blame Covid-19 for it.” We should not allow them to escape accountability with this deception. Sivier reports that, “Research from the Joseph Rowntree Foundation and baby bank charity Little Village has shown that 1.3 million babies and children aged less than five in the UK are now in poverty. The report found 34 per cent of families with one child under five live below the poverty line, meaning they survive on less than 60% of the median household income in the UK. 1.3 million of the 4.2 million children in poverty in the UK are babies and children under the age of 5. Two in five of the families of the children in poverty have seen a reduction in their earnings as a result of the ongoing Covid crisis.” Sivier cites the Mirror Online Article entitled: “1.3m babies and kids under 5 live in poverty in Britain, ‘shocking’ new report finds.”
Sivier claims that, “Undoubtedly the government will want to blame Covid-19. Measures to control the pandemic have meant lower-level incomes have suffered. But who imposed those measures? The Tories. And why were so many families already so close to poverty that it took only a 20 per cent reduction in their incomes (the difference between normal wages and furlough payments) to drop them into it? Because the Tories encouraged wage depression over the 10 years prior to the pandemic. Finally, let us all remember that the pandemic has been a windfall for the richest people in the country. They have increased their income hugely.” We must demand that those who have profited from the Covid crisis must be ‘windfall’ taxed appropriately to pay for it. That will require progressive Socialist leadership and vocal MPs to forcefully reject and call out any attempt to impose pay freezes or any aspect of austerity including strong repudiation of the Tory rebranding of austerity under the deceitful guise of the ‘Lev…up’ lie.
In the London Economic Article entitled, “Pandemic: eye-watering spending must not lead to austerity,” they claim that, “Rather than quantitative easing for the banks, there should be quantitative easing for the people. The vast sums of money governments are spending to sustain locked down economies are eye-watering, so far around $12 trillion globally. Estimates for the UK are at least £400 billion or around £6000 per person. This money is inevitably described as needing to be met by government borrowing. The assumption is that the state does not have any money of its own and relies on a jumble of various foreign and domestic financial investors to fund any deficit in tax income. This is patently untrue, modern states have central banks which have the ability to create new money out of fresh air, a privilege that flows through to the rest of the banking system. How far the central bank uses its money-creating powers to back bank lending rather than enabling state spending, reflects a political choice.”
London Economic say, “That choice determines whether or not countries are put into debt. Government borrowing places the burden of repayment onto the populace leading to calls for austerity. The current dominant ideology of neoliberalism demands that new money must only be issued through the commercial banking system. Governments are set arbitrary levels of debt and deficit such as the EU’s 3% of GDP as a maximum for deficit and 60% for debt. The UK deficit is currently around 20% and total debt over 100%, and the sky has not fallen in. There is concern that states ‘printing’ money will cause inflation. That is not the worry at present, the bigger danger is deflation and a collapsed economy. Money is the lubricant that enables the economy to flow. Like a water system or a blood circuit if there is a break, the water or blood drains away. The money system, like a leak or wound, needs to be constantly replenished until the break is mended. It is on life support. There is a place for debt and government borrowing, but that is not now.”
London Economic point out that, “The money to rescue the economy during the pandemic should be created and circulated by the state, free of debt, until the crisis is over. The UK is temporarily a public economy, total public spending is nearly 60% of GDP. A public economy should be funded by public money, this is not the time to provide financial institutions with a profitable investment. Nor is there any need for austerity. The current emphasis on state borrowing leads to the ridiculous situation where governments are selling government bonds to raise money, while the central bank is buying up the self-same bonds through ‘quantitative easing’ that is, creating new money. The result is that central banks end up holding a substantial amount of government ‘debt’. This means that in a democracy, one part of the state owes money to another part of the state. If we owe the money to anyone at all, we owe it to ourselves. Rather than quantitative easing for the banks, there should be quantitative easing for the people.”
In the London Economic Article entitled, “Watch what happens to the UK’s debt pile under the Conservatives,” Joe Mellor explodes the myth of Tory fiscal responsibility. He explains the consequences of Tory austerity policies on the UK economy and it is not a rosy picture of fiscal recovery after the banking crisis. He says that, “It means the UK’s overall debt is now around 99.5 per cent of gross domestic product (GDP), which is a measure of the size of the economy, a level not seen since 1962. Despite claiming to be the party of fiscal responsibility, the UK’s debt pile under the Conservatives has increased exponentially over the past decade. Often weaponised against the Labour Party in the elections of 2010 and 2015 it has increased in every year since the Tories took charge, and has grown at an alarming rate this year. Government borrowing surged to a record £31.6 billion in November as efforts ramped up to support the economy through the second wave of the pandemic, official figures have shown.”
Mellor reports that, “The Office for National Statistics (ONS) said last month’s borrowing, excluding state-owned banks, soared by £26 billion year on year and marked the highest seen in November and the third highest in any month since records began in 1993. The latest estimate saw public sector net debt reach a new all-time high of £2.1 trillion at the end of last month. It means the UK’s overall debt is now around 99.5 per cent of gross domestic product (GDP), which is a measure of the size of the economy, a level not seen since 1962.” Mellor has provided a few handy graphics to help illustrate how badly the Tory strategy of austerity introduced by Goorge Osborn managed to rapidly increase the national debt despite all the deceptive Tory claims of ‘fiscal responsibility’ and the constant repudiation of Labour’s appeals to protect the social safety net. This hoax of better management of public finances is trotted out at every election and the progressive Left need to robustly reject this lie and present the true picture to the UK public.
Mellor points out that, “Borrowing has hit £240.9 billion for the first eight months of the financial year, £188.6 billion more year on year and breaking yet more records. Recent official forecasts from the Office for Budget Responsibility (OBR) predict borrowing could reach £393.5 billion by the end of the financial year in March, which would be the highest seen since the Second World War. It comes after the Government launched more than 40 schemes across the UK to help households and businesses through the coronavirus crisis. One of the most costly has been the furlough scheme for workers, which was last week extended again until April 2021. The most recent figures from HM Revenue & Customs showed another £3.4 billion worth of claims were made between November 15 and December 13, taking total claims to £46.4 billion and 9.9 million furloughed jobs.”
Mellor reports that, “The ONS said borrowing rose as tax and National Insurance receipts fell by £38.3 billion, or 8.6 per cent, year on year in the eight months to November. But government support for individuals and businesses during the pandemic contributed to a 30 per cent or £147.3 billion hike in central government spending. Howard Archer, chief economic adviser to the EY Item Club, cautioned the furlough extension and extra Government support could send borrowing ballooning to more than £400 billion this financial year. He said: ‘If the trend of the first eight months of fiscal year 2020/21 continued, the budget deficit would come in around £264 billion. ‘However, it looks likely to come in significantly higher than this with the furlough scheme now being extended until April and other supportive fiscal measures announced for the economy in the recent Spending Review. ‘Indeed, if introduced, more support for businesses affected by Tier 4 restrictions could potentially send the budget deficit above £400 billion’.”
In an even more depressing London Economics Article entitled, “Repressionomics: Get ready for the new permanent austerity,” T.J.Coles paints a grim picture of the road ahead. He predicts that, “Government and corporations will again balance the costs of a long-term stimulus on the backs of the poor. No prizes for stating that the economy is in crisis. By late-June, government debt was £1.9 trillion, more than the entire national GDP; a debt not seen since 1963, following six years of Tory mismanagement under Chancellor and later PM, Harold Macmillan. In the second quarter (April to June), GDP dropped by more than 20 percent. Another record was broken when government borrowing exceeded £127 billion. Economists predict that the deficit, ie., expenses exceeding revenue, could top £370bn. Analyst Nick Hubble calls the Tory solution a potentially ‘limitless stimulus’ (paraphrasing). Others say that this approach amounts to a type of management called financial repression. And guess who will pay the price… again?”
Coles describes, “austerity and covid” as “a match made in hell,” saying that, “Britain was the hardest hit of the G7 nations. The ex-hedge fund managing millionaire Chancellor, Rishi Sunak, claims that the UK tanked so badly because:‘Social activities, like eating out, going to the cinema, shopping… comprise a much larger part of our economy than they do for most of our European comparative countries.’ But is this true? By the end of July, France’s GDP had fallen less than 14 percent and Germany’s just over 10. France’s household consumption expenditure is between $1.3 and $1.5 trillion, Germany’s is $2 trillion. The UK’s is not radically different ($1.7 and $1.8 trillion.) Although Germany’s services sector comprises just over 60 percent of its GDP compared to the UK’s 70+ percent, the sector in France likewise constitutes over 70 percent of GDP. So, by these measures Sunak’s claim is false. The BBC parroted the assertion regardless.”
Coles claims that, “A more plausible explanation is that the deep cuts imposed by the Tory-Liberal regime (2010-15) after the Financial Crisis (2007-09) weakened the UK’s resilience. An article by the Oxford Research Group calls COVID off the back of austerity ‘a match made in hell’. After the Global Financial Crisis (2007-09), austerity was imposed across the European Union, but the UK’s measures were particularly harsh. The French government continued to fund its health system, introducing new taxes to pay for the budget. It ‘took steps to protect people with low incomes,’ says the World Health Organization, for instance by increasing the national insurance contributions of wealthy people. In Germany, according to the Centre for European Economic Research: ‘the increase in the debt ratio overstates the cost of banking sector stabilisation because the public sector also acquired significant assets,’ thereby preventing long-term austerity.”
Placing the blame fairly and squarely on greed obsessed Tory mismanagement Coles says, “In the UK, Chancellor Osborne (who was almost certainly a millionaire at the time) cut the top rate of income tax, reduced the National Health Service budget, and decimated social security. By the time COVID struck, two-thirds of the so-called job recovery market comprised of what the Resolution Foundation calls ‘atypical work’: precarious small business ownership or unstable gig economy-type jobs.” We cannot be duped by this ruinous and dangerous tactic again. That is the crux of the warning in the ‘must read’ book: “99% – Mass Impoverishment and How We Can End It.” We should understand that it was the hollowing out of our NHS and public services that left this country so uniquely ill equipped to combat the Covid 19 crisis in the first place with people already surviving on the brink of destitution.
Coles asks, “So, how will the government, which is comprised of millionaires and funded by billionaires, manage the unfolding COVID crisis? Barclays notes that policymakers ‘will have to choose from overt debt reduction policies, such as austerity and taxation, to covert ones, such as financial repression and inflation’. ‘Repressionomics’ sees funds borrowed from the private sector to reduce government debt. The acquisition of private funds facilitates the continuation of low-interest rates for government spending. The measures are ‘repressive’ in that savers earn less than at the rate of inflation. Ideologues are already pushing for this as the least-worst option. The Telegraph, for instance, finds reasons not to re-nationalise the Bank of England or spend on a massive, post-WWII-type infrastructure project, backed by government-secured jobs and housing. ‘That leaves the last option: financial repression’.” This is the dystopian nightmare option that Thomas’s 99% book warns will result in mass impoverishment!
Coles explains that, “Contrary to the impression given by Barclays, financial repression and austerity are not mutually exclusive. Ad van Riet of the European Central Bank (ECB) confirmed that European technocrats ‘applied the tools of financial repression to restore stability after the euro area crisis,’ following the Crisis of ‘07-09. But that didn’t stop the ECB from imposing austerity in the form of public spending cuts. Corporations are not in the business of having their profits repressed. They will likely continue to defer the cost of lost profits to lower-level employees and pension holders. With embedded public spending cutbacks resulting from policies undertaken during the last decade, social security will continue to be meagre for the recently-redundant and retired. Nearly nine in ten pension funds saw a drop of up to 15 percent in the first quarter. Harvard economist, Professor Lance Taylor, predicts that ‘profits from job losses will finance government borrowing for COVID-19 bailouts’.”
Coles reports that, “The former Chief Economist at Citi, Willem Buiter, says that even without protectionism, ‘the organisation of production and trade will emphasise planned redundancy.’ Buiter cites only ‘painful ways to restore fiscal sustainability.’ The rich and powerful have ways to offset the ‘pain’ of lower-than-expected returns. ‘That leaves the familiar tools of public spending cuts and higher taxes,’ says Buiter. However, corporations and wealthy individuals already create a ‘tax gap/ of £35 billion. In late-2019, the Institute for Fiscal Studies reported that ‘an awful lot’ of austerity was ‘baked in’ to the Tories’ supposedly generous manifesto. In April this year, millionaire Boris Johnson said: ‘I think this government will want to encourage that bounce back in all kinds of ways, but I’ve never particularly liked the term [austerity] and it’s certainly not part of our approach.’ Notice that Johnson said he didn’t like the ‘term,’ not the practice.” The reality is that the PM is using the ‘Lev…up’ lie to obscure his rebranding of austerity.
Despite the very real probability that the alt-right UK Media fully understand exactly what Boris Johnson is up to with this deceptive propaganda they are not letting on. But, according to Coles the, “Media read this as a pledge not to continue the trends set by millionaire PM David Cameron in 2010. But in reality, Chancellor Sunak has already confirmed that ‘tough times are here,’ though not for people like him and Tory donors. Talking to the Confederation of British Industry, former Chancellor and millionaire, Philip Hammond, says: ‘My personal view is that this government will be extremely reluctant to either increase taxes or reduce public spending.’ Hammond concludes that this will push austerity further down the road: ‘I expect that the great majority of the burden of this crisis is going to be absorbed through increased borrowing and left on the table for future generations’.” This is only a worrying prospect if you buy into the delusional fallacy of considering the national budget in the exact same light as a household budget.
It is the perpetuation of this myth that permits the Tories to sell the need for more austerity to the British people, but we have had an entire decade of seeing that the super wealthy are not only spared and share of this hardship, they are enriched by the selective Tory policies that protect them. Coles says, “The usual suspects are lobbying for belt-tightening. Matthew Lesh, head of research at the Adam Smith Institute, claims that government spending is too generous: ‘The Tories are caring less and less about fiscal responsibility. They are instead looking for a magic money forest.’ Sajid Javid, the millionaire ex-banker and former Chancellor, recently published a report for the Tory-backing Centre for Policy Studies, recommending VAT and national insurance relief for employers, and ‘[n]ew fiscal rules to gradually eliminate the current budget deficit after the economy recovers.’ Javid concludes: ‘When things have returned to some form of normality, fiscal conservatives may have to win the argument all over again’.”
That statement is code for ramping up the Tory propaganda to convince the public that they are now responsible for repaying the reckless squandering of public funds and rampant corporate profiteering throughout the past year. We have a very small window of opportunity to hold the Tories to account for their corruption using Judicial Review before this avenue of scrutiny is closed down by the Tory Sovereign Dictatorship. Coles warns that, “To prevent another decade of austerity, the grassroots must ensure that the Labour Party remains committed to socialist policies, otherwise it will repeat the mistakes of the austerity-lite leader Ed Miliband in 2015 and fail to gain a significant number of seats whenever the next General Election comes.” The potential for another election and the possibility that it might be free and fair is miniscule and we cannot count on it happening at all. The exposure of the blatant ongoing corruption of this Tory cabal is more than sufficient to remove them from office right now: we must rescue our democracy! DO NOT MOVE ON!