“When the MMT coin drops and you realise the suffering is gratuitous”
In this week’s blog, hunger is on the menu yet again. Gratuitous hunger and hardship. Gratuitous suffering. Whilst the government gives with one hand (not enough), lauds its generosity at every media opportunity and yet is selective in its distribution of public money, it is making it very clear that the magic money tree they swore blind didn’t exist prior to the pandemic does have limits and we can expect a tightening of the public purse in the future. Indeed, in a recent tweet Rishi Sunak made his position very clear in when responding to the question whose money are we spending:
‘… the simple answer is your money. The government is not some entity that has its own money. The government only has money because people pay taxes and we borrow money. That’s how we fund what we do.
That’s why I’m careful with how we spend that money. It’s why often I will say look we can’t do absolutely everything that people want. There’s obviously limits. I’ve got to try and balance what’s the right level of taxation, how much we can safely borrow, conscious that that will need to be paid back and the burden will fall on future generations.
We’ve spent an enormous amount and we’ve borrowed an enormous amount on everyone’s behalf.
We always have to be mindful of the money we’re spending. It’s yours, it’s everyone else’s and we need to keep an eye of needing at some point to know that we have to pay things back.’
Let’s not be under any illusions; Sunak may have found the money taps to mitigate for the worst effects of the pandemic and for their corporate friends benefit, but Maggie Thatcher’s dictum stands ‘There is no such thing as public money. There is only taxpayers’ money,’ when it comes to spending on the public and social infrastructure upon which our economy stands. Instead of focusing on the real limitations to government spending, which are our real resources, its fall-back line is that there will be a future monetary price to pay or future generations will suffer.
We are not so subtly being prepared for yet another round of some sort of austerity, more cuts to public spending and wage caps in the public sector (already on the cards potentially to be announced at the next spending review in November).
The government line of thinking seems to be yes, let’s clap for the NHS, give out awards for the ‘courage and dedication’ shown by frontline workers, as long as it doesn’t involve an increase in government spending on those very key workers who have gone beyond the call of duty during this pandemic.
Awards won’t pay the bills, but they will be the perfect distraction at a time when the country needs something more than a cynical diversion to take the public’s eye away from the realities of government policies. The household budget myth of how the government spends adds another layer of distraction and quite simply reinforce a useful lie to justify what comes next. And it’s not just more tightening of public sector spending.
This week Matt Hancock suggested with all seriousness that businesses, charities, and local government should be praised for ‘stepping up to the plate’ in support of Marcus Rashford’s Free School Meal Campaign. He said that he was ‘strongly on the side of those who have come out to help’. ‘It’s brilliant’ he said and added ‘I saw that Marcus Rashford said what we need is collaboration, people working together … making sure that everybody gets the support that they need’. It would be laughable if we didn’t know better what this distraction signals and it is much more cynical than at first sight.
Whilst Hancock praises the generosity of the nation, he hides a more insidious objective, which combined with the alarmist headlines about the huge levels of borrowing and trillions of public debt and on-going references to getting the public finances back in order by the Treasury should definitely set the alarm bells ringing.
Jack Monroe, the food writer, journalist and activist known for campaigning on poverty and hunger issues wrote in an article this week in the Guardian ‘long term, we need a reckoning as to how so many people have ended up at the doors of food banks, how so many people are falling into desperate situations’ A volunteer food bank manager at the Hillingdon Crisis Support Service in North West London pointing to the receipts for food that her team of volunteers purchased with their own money was absolutely clear when she asked the question ‘Where’s the government’?
Where is the government indeed? On the one hand, Rishi Sunak talks about the government’s enormous fiscal response; a message which is then tempered by his warnings that there will be a future price to pay. Heaven forbid that the public might get to know how the government spends.
Then from the Tory propaganda units in the basements of Westminster, their PR men and women spend their days writing their media press releases and ministers get dizzy at their generosity, the dissonance between the government version of events and reality is becoming ever starker as the crisis deepens.
It is worth remembering that whilst the current government through its employment and other policies has consistently rejected its direct responsibilities towards the health of the nation, since 1948 all Finnish children have been served a free lunch every school day. Children learn cooking through school subjects, the effects of food on health, the environment, economy and culture and as such education plays a central part in the health of future generations and the Finnish economy.
A healthy nation equates to a healthy economy, a fact our government ignores whether we are talking about public health, education or those public structures which enable them. You know, those very things that are ‘unaffordable’.
Whilst the smoke and mirrors of blame have pointed only too often at irresponsible parents, lazy people and scroungers, the enormity of the economic crisis affecting all working people who have already lost jobs or will do so in the months to come, will increasingly begin to unravel the lies about who is responsible.
The culprits lie at the heart of government; not just this government but successive governments who have bought into the lie of the superiority of markets, the scarcity of money and the unaffordability of spending on publicly paid for and delivered services. Our society is not just poorer for it, it is crumbling as a result.
The Joseph Rowntree Foundation warned in late September that if the government failed to keep its much-vaunted promises on protecting living standards and levelling up, then many more people would be pulled into poverty. It said that cutting the increased Universal Credit rate would hit those on the lowest incomes and families with children, and that the cut would impact on those who are having to turn to the social security system for the first time as a result of job losses caused by the pandemic as well as those who were already in poverty. This action, it said, would plunge 500,000 more people into deep poverty – 50% below the poverty line.
While Rishi Sunak reiterates the lie about ‘taxpayer’s money’ like a worn-out Thatcherite record, if people are not to face huge financial hardship this winter and if the economy is not to nosedive completely, particularly in the light of the prospect of a further lockdown, then the government as the currency issuer should do what only it can do; pay the people what they need to pay their bills and keep food on the table.
The rhetoric of generosity spouted by modern-day versions of Scrooge seated in Westminster should be ridiculed and shown up for what it is. Mean, monetarily unnecessary and very damaging to the health of the nation today and for future generations.
As the TUC and the IPPR made clear in their jointly authored research paper published this week, struggling families need an urgent cash boost and that strengthening the social security system (which is one of the least generous in the developed world), doubling child benefit payments or raising Universal Credit payments would make a ‘life-changing difference’ to many of the poorest families.
The IPPR’s executive director Carys Roberts made it clear that without a significant cash injection, more families would be forced to rely on food banks [at a time when donations in some areas are drying up as economic conditions worsen] and that putting more money into families’ pockets would ‘spare hundreds of thousands of children from the scarring effects of poverty over the next 18 months’ and would ‘also mean an economic stimulus to keep the economy going’
To this mix should be added, as a long term objective, a larger public sector to undo the damage caused by the last 10 years of cuts and the previous decades of shrinkage, a fit for purpose social security system, a permanent Job Guarantee programme to stabilise the economy when it falters and the implementation of a wage floor below which no-one can fall.
A government that fails to serve the interests of the nation is a failed government. A government that ignores poverty, hunger and hardship whilst pouring vast sums into corporate bank accounts is a rogue government.
As politicians cynically praise the public and local bodies for their collective action, it cannot be emphasised too strongly, as indeed GIMMS has done previously, that it is a signal of their real intentions to continue along a path reminiscent of the world of Victorian philanthropy in which the public’s goodwill is exploited and charitable donations and volunteering become the norm. A place where properly organised and publicly paid for public and social infrastructure (which lies at the heart of a functioning economy and the distribution of wealth and resources) becomes a mere shadow of itself, if it exists at all.
As the government faces more pressure to provide funding for free school meals, we need to examine this as just part of the vicious nature of government policies whereby power is being centralised, public money is poured into corporate delivery of public services and our local communities are dying a slow but quickening death, unable to withstand the pressures caused by a decade of austerity and now the pandemic.
When Johnson says ‘we don’t want to see children going hungry this winter’ but fails to provide adequate funding at national or local level, you can be sure that the opposite will happen. Whilst government ministers praise their response, they ignore the comments of local government leaders to the already spent allocation of funding; ‘the government’s rhetoric on the sums provided to councils was absolutely disingenuous’…‘the north London local authority share of the £63m (government allocation) was not enough to even cover free school meals over half term and Christmas’ and ‘the council is paying for this out its existing budget’.
As we stand at a significant crossroads in the history of humanity, it is an opportunity to examine our consciences, our values and the prevalent prejudices that we hold as a result of the demonisation of vulnerable, unemployed, sick and disabled people. Instead of accepting the prejudices as truth, we should be looking more closely at the motives for such an agenda.
Whichever way we look, there is no-one to vote for who hasn’t or can’t be bought by a corporate establishment which has been allowed, through its excessive wealth, to buy power and influence whilst the revolving door keeps the political machinery oiled and functioning in its favour. This has been at the expense of working people and the infrastructure which form the foundation of a good society.
If we turn a blind eye now, we are turning a blind eye to the future of our young people who deserve something better – stable lives, stable jobs and a sustainable economy.
The mantle of fiscal responsibility worn by successive governments to justify their policies and spending decisions, which have been the measure by which a government’s economic record has been judged, should be at the heart of future discussion. If we are to challenge the false narratives which have allowed such wealth disparities, poverty and inequality to exist, we can only do so from a position of public knowledge.
If the media as part of that orthodoxy will not tell the truth, then it is up to others to be the bringers of that knowledge.
GIMMS and many other activist organisations which are growing across the world are committed to making a difference. As Stephanie Kelton so rightly said ‘“When the MMT coin drops and you realise the suffering is gratuitous” that should be our lightbulb moment.
If you are interested in exploring further, you can find information here:
gimms.org.uk/tools-and-resources/
All that we ask is that you pass the knowledge on.
Upcoming Event
Phil Armstrong in Conversation with Neil Wilson – Online
November 15 @ 14:00 pm – 15:30 pm
The GIMMS team is delighted to host its next ‘in conversation’ event at which Phil Armstrong will be talking to Neil Wilson
Neil is an expert in finance and information systems and one of the UK’s leading thinkers about MMT. After more than 30 years in the systems business, Neil learned the hard way that operations rarely follow the manual. Moving from network crashes to financial crashes, Neil was intrigued as to whether the economy could be fixed with a reboot – which lead him to Modern Monetary Theory (MMT). His work challenges the high-priesthood of Important Grey Men who refer to people as ‘resources’ and who believe debt is bad for government and good for you.
He dreams of a world where everyone who wants a living wage job can find one, close to their home, their friends and family.
You are invited to join us for this informal event which we are sure will be both stimulating and insightful.
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