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article imageOp-Ed: Money doesn't come from nowhere, says Grant Shapps — Yes it does!

By Alexander Baron     Jan 4, 2013 in Politics
The British Government continues to wend its merry way towards disaster for us all, which is hardly surprising when the people who are running it are so totally ignorant of economics.
This week, the British Government has come up with some more novel ideas to pick the pockets of us little people in order to feed the insatiable machinery of bank created debt and misery. These schemes - child benefit, assisted care for the elderly and make-work for the long term unemployed - are being marketed in a very crafty fashion, or could it be that our rulers sincerely believe in what they are doing?
The latter scenario is arguably more frightening, and is just as arguably correct.
Let's begin with child benefit. This is universal and is paid to all mothers regardless of their income. Or it will be until next week. Why should it be paid to everyone, including people on high or very high incomes? That is the usual grouse, and it is one that seems fair, until one remembers that it is paid directly to mothers, which ensures that if she is in one of those unfortunate relationships of which we hear so much about, this is one source of income which is guaranteed to go where it is supposed to.
Taking away this benefit from top earners and means testing it into the bargain will hardly save any money at all, especially when the tax system and accountants are dragged in, so the propaganda that the money saved thus can be directed to those less well off doesn't hold water.
At the other end of the scale, there is a genuine problem of caring for the elderly, and the less than novel non-solution one MP has come up with is to rob Peter to pay Paul, or in this case to rob granny and granddad to pay great-granddad. Liberal Democrat Paul Burstow wants to "target" the winter fuel bonuses paid to the elderly in order to pay for care bills. Again, if this is applied, what will happen is there will be a few who gain and many who lose.
Unfortunately, this sort of idiocy is not confined to the Government, and the Opposition has its own ideas about reducing so-called unemployment. Speaking on the BBC this morning, Liam Byrne came up with the idea of subsidising the long term unemployed. He said nothing about the long term unemployable. Also speaking on the BBC, Grant Shapps countered this, but he too fails to see the real problem. As well as defending the Government's work programme he made the classic faux pas of claiming that money doesn't come from nowhere. Oh yes it does!
Does Mr Shapps not realise that the government both prints and mints money - about 3% of the total money supply, and that the rest comes into existence through the mechanism of bank loans, ie bank-created credit? Currently, an MP receives a salary of £65,738. They are also paid expenses, and many of them - including Mr Shapps - get a few freebies in addition, as can be seen by his entry in the Register Of Interests.
If this is an accurate reflection of his remuneration, one could hardly accuse him of being in the pockets of the banks or of big business in general, which means that rather than wilfully guiding us towards the iceberg he is simply rearranging the deckchairs on the Titanic, so at least we can take comfort from the fact that when the country finally does go to the dogs, we will have been led there by men and women of integrity. Ain't that a comforting thought? Not.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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