Can we please drop the nonsense of ‘tax payer’s money’?

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Can we please drop the nonsense of ‘tax payer’s money’?  The phrase is just political advertising, intended to manipulate us in to accepting cuts and constraints which are not good for us or the economy.   (Christopher Bacon explains why it’s a nonsense in his article ‘The Myth of Tax Payer’s money’ which is copied below.)

However, like all successful advertising slogans, the phrase ‘tax-payer’s money’ invokes what psychologists call a schema…. a whole body of emotions, experiences and knowledge which mediate our response.

Hence, ‘Tax payer’s money’ is intended to create a direct link between government spending and the individual.  You are invited to visualise your hard-earned pennies being frittered away unwisely ……. which is hugely convenient for a politician intent on running down public services, so that they can be privatised.  Also implicit in the schema is the threat that if the government spends more, you’ll have to pay out, depleting even more of your income.

And like so much of neoliberal-speak, it is contaminated by deliberately confusing government spending with household spending.  The phrase ‘tax-payer’s money’ comes from the same stable as ‘maxing out the credit card’ or ‘mending the roof when the sun is shining’. It is bunkum.  Government is not like a household.

And of course, you know that really, when you actually think about it …. Government spending is nothing like our own.  But as Drew Weston wrote in ‘The Political Brain:  The Role of Emotion in Deciding the Fate of the Nation’, …..‘the nature of political campaigns are where “rational minds collide with irrational thinking”

Drawing from the fields of psychology and cognitive neuroscience, Weston, a clinical psychologist and political strategist, demonstrated the extent to which candidates’ speeches and political ads, are emotionally laden with words and images designed to provoke strong feelings…. And by re-writing the actual speeches using alternative wording, he was able to illicit a very different set of responses.

Weston explains that these messages activate networks in the brain and become the avenues down which true or false political messages travel, connecting to the unconscious emotions of the voter in a nano-second and involuntarily triggering us to react emotionally and without ‘thinking’.

So let’s keep ‘thinking’ and not allow the Right to infect our minds with their manipulative false analogies….  and can we please drop the nonsense of ‘tax payer’s money’.

 

The Myth of tax payer money Christopher Bacon

We are told, time and time again, that the government should spend taxpayer money wisely, efficiently, and sustainably.  Often these pronouncements are followed by promises to use taxpayer money well by cutting government spending and making efficiency improvements.  There is an assumption behind these statements that is utterly inaccurate and dishonest, however.  Namely, that there is such a thing as “taxpayer money.”

Not only is there no such thing as taxpayer money, it is not the case – ipso facto – that the government spends taxpayer money.  To see how this is so, assume that taxpayer money exists and assume that the government spends it.  As we shall see, these assumptions actually lead to a paradox.

In this world, where the government spends taxpayer money, the following situation holds. The government invokes a tax on the population – say, an income tax.  This income tax takes money from the people who qualify and adds it to the Treasury account.  The Treasury, then, takes that money and spends it on whatever the government wants to buy: a new hospital, school, submarine, or whatever.

Where does this money come from, assuming God does not randomly drop it from the sky?  Well, it is “taxpayer” money.  So the money, presumably, belongs to the taxpayers – so it must come from them (i.e. the taxpayers must issue/print it).  Well, that is all well and good, but it does not represent this world.  Taxpayers, in the UK, do not print pound sterling. That would, of course, be a criminal offense.

In order to tax someone, there must be something there to tax.  Since taxpayers do not print their own money, there is nothing there to tax.  And in order for the government to spend, the government must first tax.  But since there is nothing there to tax, the government will never collect tax and so will never spend.

Clearly, this description is not one of our world.  In this world, the government does spend, and taxpayers do pay their taxes.  Something has to give – our initial assumptions must be wrong:  there is no such thing as taxpayer money and/or governments do not require taxes to spend.

If we jettison the second assumption, then it turns out that the government must spend before it collects taxes.  This is because if it does not spend, then there will be nothing to collect – remember, taxpayers do not print their own money and it does not magically fall from the sky.  Spending precedes taxation, by necessity.  Now that we can see the money in circulation is government money – money issued by the government – it follows that taxpayers do not own it; so the first assumption is jettisoned.  Therefore, the notion “taxpayer money” ceases to have any content.

Dear Philip Hammond, Chancellor of the Exchequer

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A letter to the Chancellor of the Exchequer from Prue Plumridge

I feel I must write to you in response to your speech at the Conservative Conference in which you referred to the medium-term challenge of dealing with the public finances so as not to burden future generations.

Aside from the fact that your government has been promising to deal with the public finances for the past seven years whilst regularly moving the goal posts for achieving it, failed Tory promises show astonishing ignorance about how the state finances work in practice.

Or, is it, perhaps, that you do know but prefer to keep the public in the dark with fake messages about household budgets, living within our financial means, paying down our debts and saving for a rainy day.

You (and George Osborne before you) have abused the trust of the public with your myths and lies about maxing out the credit card and going broke.  Neither of which can happen in a sovereign currency issuing state.  I’m sure you know that really.  In truth, this has suited the pernicious ideology of the Tory government which claimed that Labour overspent and austerity was unavoidable.  Neither was true.  But, as a result, seven years of cuts to public spending have led to rising poverty and inequality through the redrawing of welfare provision and the decimation of public services not to mention the on-going attacks on employment rights and the rise of insecure working and the gig economy.

And, all the time, while you tell us that there is no money for those services upon which we all depend from the NHS, to public infrastructure and services and local government we are witnessing the ongoing transfer of wealth into ever fewer hands and public money being poured into corporate pockets.

Admit it, Chancellor, this exercise has never been about necessity.  It has always been about ideology which can be best expressed in the words of the former head of John Lewis who said recently ‘the only way to provide good public services is to ensure a vibrant business economy’ …… which is not only neoliberal bunkum trading on the lie of discredited ‘trickle down’ but shows how this false narrative dominates the mainstream and infects public understanding.  To quote Richard Murphy from Tax Research on the NHS  (and whilst he doesn’t mention it, public services too)

there is no reason why we should not have health care in thirty years’ time, whatever that care might be…… All we have to do is decide we want it. Then we can pay for it. It will not be a matter of not affording it. It’s just a matter of setting priorities. “

Moving on to your claim that borrowing takes money from the pockets of future tax payers is plain wrong to put it bluntly.

As the economist Professor Bill Mitchell notes “Each generation chooses its own tax rates and that means that the mix of public and private sector involvement in the economy is a political choice”

In this case yours.  Government spending in the form of deficits (assuming of course a government that takes seriously its responsibility for the well-being of the nation) can work on behalf of citizens to create a healthy economy and a fairer distribution of wealth.  This not only helps today’s citizens but also creates investment in public education, public health and other infrastructure which benefits both current and future generations.  Or, of course, it can, as in the case of the Tories and already noted, represent wealth transfer to the already rich and public money leaching into private corporate pockets.  And just to be clear as I can hear you whispering but what about the printing presses, inflation and Zimbabwe I am not suggesting that deficits don’t matter – they do but not in the way you tell us they do.  The fact is that whilst governments are never revenue constrained spending will always be limited by available productive capacity and resources.  And that is what has to be managed.  It should never be about balanced budgets rather it should be about creating a balanced economy.

So, Chancellor, in conclusion, I will finish by saying that a time is coming when you will no longer be able to fool the public into believing your household budget version of the state finances which has claimed that we can’t afford public services, the NHS and the welfare safety net.  They will then understand that you made a choice to deny them the public infrastructure that ensures a healthy economy and the well-being of their families.  They will understand that you played with their lives and their survival.

It is to be hoped that in the near future you will indeed have plenty of time as a shadow minister in her majesty’s government to reflect on where the Tory party went wrong but then again you probably won’t.

Regards

Prue Plumridge

What does Inequality Look Like? 

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Bryan Gould, was a Labour  MP, and now lives in New Zealand.

What does inequality look like? In a society where the gap between rich and poor has widened significantly, what evidence of that gap would one expect to see?
A dramatic and painful answer to that question was provided to us this week with the shocking image of the burning London tower block. If we ever wanted evidence of how – even in a society that is relatively affluent – the poor can be disregarded while the rich pursue their own interests, this was it.
The “towering inferno” occurred in one of London’s most affluent boroughs. While around 120 poor families were crammed into Grenfell Tower, a 24-storey tower block, most of the borough comprises leafy suburbs and million-pound houses.
The borough’s elected local authority apparently saw it as its first priority to lift property values in the borough and, as a necessary step to that end, to corral the poor into limited locations, getting them off the streets, out of sight and out of mind. The residents of Grenfell Tower, it seems, sensed that this was the case – a perception borne out when the concerns they repeatedly expressed about the safety of the tower block were ignored.
We all saw the consequence of that neglect. It is already clear, even before the necessary inquiries into the tragedy have been set up, that the building was unsafe and had been from the moment that the first tenants had taken up residence.
There were, it seems, no fires sprinklers. The fire alarms were inadequate. The building design made no attempt to inhibit an outbreak of fire and on the contrary ensured that flames would spread rapidly. Worst of all, it seems that the cladding attached to the building when it was refurbished a little time ago was of “limited combustibility” – and we now know that any degree of combustibility was too much.
These manifestations – literally of “care-lessness” – reflect an order of priorities that should have no place in a civilised society. The local authority seems to have been more concerned with saving the ratepayers money, avoiding “unnecessary” regulation, and promoting the interest of the wealthy in seeing property values rise, rather than in providing a safe living environment for those who could not afford to buy their own homes.
We might have hoped that the democratic process would have ensured that the interests of the poor could not have been so easily swept under the carpet. But, sadly, the western world offers many instances of how democracy can be diverted to serve the interests of the already powerful. In Donald Trump’s America, for example, the President is celebrating his “achievement” in denying health care to 23 million Americans so that he can deliver billions of dollars in tax relief to big corporates.
In New Zealand, we like to think that we are spared such excesses. We know, because we read about it, that there are people who are homeless – living in cars and garages – and that there are many children growing up in poverty, suffering ill-health and inadequate education as a result.
We read about it, but it fails to make an impact on us, because our own lives are relatively comfortable. It is someone else’s problem – the government’s – and when we cast our votes to elect a government, we are more concerned with how much tax we pay than about the cold, damp rooms, the overcrowding, the wheezing lungs and the empty tummies.
Thankfully, these attitudes do not produce by way of consequence – or have not done so far – anything remotely as dramatic as a flaming tower block. We do not, after all, have many tower blocks available to test out degrees of combustibility – or culpability.
But the damage we do to ourselves – as a society and to its individual members – can be just as serious as the fire at Grenfell Tower. The flames that engulfed so many were a demonstration – cinematic in its power and intensity – of what inequality can mean. We have persuaded ourselves that we can live with the less dramatic but no less lasting penalties that we choose in effect to impose on our fellow citizens.
We may not force them to jump out of burning windows. We simply condemn them to a lifetime of disadvantage.
Bryan Gould 16 June 2017

#Grenfell – Negligence beyond Belief

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The shock and grief, the outpouring of emotions from anger, sadness and depair is what we are all experiencing. The full scale of this appalling tragedy at the #Grenfell fire leaves us numb. Those responsible are trying to shift opinion in order to avoid blame. Some criticise people by saying they are politicisng this tragic event. But the cause of this event was indeed political – austerity. For that reason it is inherently politicised. It was only this week when Theresa May admitted that austerity was unnecessary, avoidable, a political choice. In that, they are culpable and their actions inexcusable. They will not avoid blame; justice will be done.

There needs to be a full inquest regarding these deaths, not merely an enquiry, where in years to come evidence goes missing or locked away for 80 years

Ten shocking facts about #Grenfell

From leftfutures.org

Britain was shocked yesterday at the sight of Grenfell Tower, a block of flats that housed as many as 600 people in West London, engulfed by flames in the early hours of Wednesday morning. Since the fire, a number of shocking facts have become apparent, and Theresa May has called for a public enquiry:

  1. * Tower lies in the wealthiest locality in the country, the Royal Borough of Kensington and Chelsea. The average income is over £100,000 and the average property is sold for close to £2,000,000. David Cameron and Roman Abramovich both own a house there. The residents of Grenfell Tower are mainly working-class and ethnic minority, living in the cheapest accommodation in the borough, provided through the borough’s council, which pays KCTMO public money to manage the building. Senior managers at KCTMO earned £650,000 between them last year.
  2. *The residents formed an association, the Grenfell Action Group “to record our struggle and… remain as evidence for future generations of how our community has been mistreated by RBKC [the borough’s council] and its social housing management agents the Kensington & Chelsea TMO (KCTMO).” The Group raised serious concerns about fire risk following near catastrophes at other KCTMO properties but were ignored, causing them to write “[we] firmly believe that only a catastrophic event will expose the ineptitude and incompetence of our landlord, the KCTMO, and bring an end to the dangerous living conditions and neglect of health and safety legislation that they inflict upon their tenants and leaseholders.” 90% of residents signed a petition for an investigation into KCTMO’s handling of safety concerns.
  3. *The residents sought legal support to force KCTMO to improve safety in Grenfell Tower, but could not afford it due to cuts in legal aid. In 2009, under Labour, England and Wales had the highest per capita spending on legal aid in the world, before Conservative austerity measures cut it.
  4. *£10m was spent refurbishing Grenfell Tower from 2014-16, without addressing residents’ safety concerns or installing sprinklers. Instead, cladding was added to make the building look more attractive from the outside (presumably, to richer people who lived elsewhere in Kensington). Residents were told that the building was designed in such a way that a fire in one flat would not spread to others, and therefore advised to stay in their homes in case of a fire. This proved not to be the case,possibly because the cladding was flammable.
  5. *In 2009, a coroner’s report into another fatal tower block fire in London recommended that the government ensure sprinklers are installed during refurbishments. In 2014, given the lack of response from government, Labour MP and former firefighter Jim Fitzpatrick, pressed this in a parliamentary debate. Conservative minister Brandon Lewis said: “Sprinklers work. We know that. No one can deny it… They are an effective way of protecting lives and property.” But he rejected the idea that the government should enforce the fitting of sprinklers, citing the need to reduce the burden of regulation. Gavin Barwell, his successor as Housing Minister, and now Theresa May’s Chief of Staff, pledged a review of building regulations in this area, but never carried it out.
  6. *312 Conservative MPs voted against a Labour bill last year which required landlords to make homes “fit for human habitation”. 72 of those are themselves private landlords.
  7. *Ten fire stations and 500 firefighters’ jobs have been cut since 2009. Boris Johnson, then Mayor of London and now Foreign Secretary, told an assembly member objecting to these cuts to “get stuffed”. The new mayor, Labour’s Sadiq Khan, will review the cuts.
  8. *Thousands of ordinary people have donated money, supplies and time to help the victims of the fire, including many Islamic groups. According to witnesses and survivors, the Muslims who were awake for Ramadan prayers, having fasted all day, were crucial to raising the alarm and helping neighbours from the building.
  9. *As of Thursday, after decades of Conservative rule, Kensington is represented by a Labour MP (Emma Dent Coad) who has a strong record of campaigning against gentrification, for housing rights and writes a blogendorsed by the Grenfell Action Group.
  10. *Theresa May visited Grenfell today, but refused to speak to a single resident.
    To sum up: in the richest borough in the country, poor people died in their homes, despite repeatedly warning the authorities of safety concerns and possibly as a direct result of actions taken by KCTMO. The government knew what should be done to avert such tragedies and did nothing. Cuts stopped the tragedy from being prevented through legal action or mitigated by the fire service. Those responsible remain in power. But the people are fighting back.