Ad Fontes

Politics, Theology and Christian Humanism


Leave a comment

We are being cheated about benefit cheats

Clamping down of benefit cheats, those who fraudulently claim government benefits, has been a oft-repeated mantra of the political right in Britain. By ‘right’, I include the neoliberal New Labour project. Much of the mainstream media, not just the usual hard-right press, have merrily chimed in without needing too much encouragement. The usual news item focuses on some benefit claimant who is holidaying on a luxury yacht, or some other eye-catching headline. This follows the usual methodology of the populist right, use an individual story, even hearsay, to illustrate your point.

There have been various government strategies to encourage us to ‘shop the scroungers’, and now the ConDem government will be entrusting the credit-rating agency Experian with tracking down benefit cheats — all performance and profit led.

However, David Osler has posted on the statistics show that benefit fraud amounts to less than 1% of all benefit payments. So, the greater fraud is that perpetrated by politicians and journalists who have vastly exaggerated the problem. In absolute terms, that 1% translates into £1 billion, but even then, as Dave points out, the bank bailout was £850 billion.

Continue reading


Leave a comment

Money as Debt

Money as DebtI’m a fan of Paul Grignon’s animated films Money as Debt. They are pieces of advocacy for monetary reform, a tough issue that needs plenty of explanation. Almost any type of reform would be easier than this — electoral, political, social, ethical reform — which is perhaps an indicator of how important it is. Grignon’s new film, Money as Debt II: Promises Unleashed, introduces a light focus on bank bailouts, and it takes the educational message of the first film and develops a call for monetary reform.

The two films describe how around 95% of the money supply is bank credit, or debt money. This money is created by banks in the form of loans and mortgages. The loan isn’t taken from so-called ‘deposit money’ and given to the borrower, but created from nothing by the bank as a promise to pay. This promise to pay is considered to be money and may be exchanged for a house, car or for whatever we took out the loan. The first problem then is that the money supply is overwhelmingly in hands of private banks, generally unaccountable to governments. The second is that if a large proportion of the money supply is created by banks as the principal of loans, there is very little other money available from which to pay interest on these loans — it is almost as if the monetary system is designed to bring all money into the possession of banks and, no matter how diligent borrowers are, some will always default on loan repayments. To keep the economy working there is a demand that new loans are always taken out so that more money is introduced to pay off the interest on old loans. The treadmill never stops, demanding exponential growth and creating constant inflation. Problem number three is that natural resources, and the total global value that is derived from them, are finite, meaning that real economic growth can only occur with the discovery of new resources, greater efficiencies or redirecting the resources from another local economy (that old chestnut: imperialism is theft). Thus, a system that demands exponential growth in order to function is also demanding environmental destruction and the impoverishment of the poorer regions of the world. Continue reading