Friday, 15 June 2018

Exposing the Affordability Con

Whenever people are made to think society cannot afford to support what is important, but accept costly policies that mainly benefit the wealthy elite, the ‘affordability con’ is on.

Ever since irresponsible bankers utilised the vastly expanded scope handed to them by reckless deregulation to gamble away billions of their savers’ money, the public have been told one simple story. Money is in short supply. Therefore, ‘everything’ has to be cut back – help for people who cannot get a job, support for workers whose job does not pay them enough to live on, funding for the health service, for tackling homelessness, for education at every level, and the list goes on. And whenever anyone points to the desperate need to finance these services better, there will be those who faithfully repeat the mantra, “but we can’t afford it”.

So why is it that we can afford to hand billions over to bankers, despite the atrocious problems they have caused? Moreover, that money is given to them with no strings attached. They can pay themselves vast bonuses regardless of whether or not they are now lending more responsibly. And the deregulated financial system remains in place for them to exploit.

That is not the end of it. If billions are to be spent on sending bombers and missiles to attack a foreign country, that will go ahead without even a public debate in Parliament or Congress. Is there a serious threat to the lives of Britons or Americans if such costly action is not taken? No, if anything, it would just add fuel to the flame of twisted resentment against the West and raise the level of terrorist threats. It certainly does not compare with the threats and violence unleashed on ordinary people in the UK and the US as a result of growing economic insecurity and rising levels of hate crime. Yet domestic protection is unreservedly scaled back by the Conservative Government’s cuts to policing numbers in the UK, and the US Republican President’s de-prioritisation of all threats other than ‘Islamist’ terrorism.

What about the argument that money is needed elsewhere? Perhaps there are vital actions that have to be paid for to help society as a whole. So what do those cautious custodians, who tirelessly warn us about the need for austerity and deficit reduction, think our precious money should be put aside for? In the UK, the Conservative Government’s priority was to prevent losing votes to UKIP, and while both David Cameron and Theresa May (successive Tory Prime Ministers) had been unequivocal that they believed the UK was better off in the European Union, they would hold a referendum on the issue, and when that was lost, their government would spend endless amount to push ahead with Brexit even though it would make trade, jobs, standards of living, all worse off for the vast majority of Britons. In the US, the Republicans’ priority was to reward their superrich donors and friends. The federal deficit would be escalated to around a trillion dollars to pay for tax cuts that would overwhelmingly benefit the wealthiest few.

To compensate for such drastic losses to the public purse, the Conservative Government in the UK has taken an even more resolute stance on cutting back on expenditure in other areas, for example, by reducing the staffing level of the HMRC (Her Majesty’s Revenue & Customs) team tasked with tackling tax evasion by those with most to gain from evasion.

Finally, on the point about there being no money, it should be noted that a defining feature of any sovereign government is its power to oversee the flow of money in the economy. If it deems it necessary, it can issue more money. Under the guise of ‘quantitative easing’, a lot of extra money has been injected into the economy in the UK and the US. But it was not designed to help people in need. Indeed it is widely acknowledged that by far the biggest beneficiaries of quantitative easing have been the wealthiest who own shares and assets, and of course the bankers, for whom, affordability is always someone else’s problem.

No comments: