Harringay online

Harringay, Haringey - So Good they Spelt it Twice!

Anyone else livid about this? The BBC announce that the over 75s now have to pay the licence fee literally days after the D-Day 75th anniversary. So the heroes they interviewed during the celebrations last week could now face paying a fee. They served and put their lives on the line as well as paid the fee for decades.

Well done the BBC your compassion is noted

@boycottthelicencefee.

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Thank you Michael. Well said. 

I really do not understand this fuss!

If you can afford to pay for it you should. Why should over 75s be exempt but not students?

Of course, if you show me that the means testing costs more than the money saved, then I would find it absurd.

There are many well off pensioners. This has nothing to do with who fought the war or anything else.

The bigger problem is how to fund proper social care for all, including in old age. That is a fight to put your energies into!

... "Free TV licences for over 75s. What's the problem? What's the answer? What does the tax pay for? It actually doesn't pay for anything. That is propaganda designed to hide the true nature of money, of currency.

The TV licence fee is a 'hypothecated tax'. A hypothecated tax is one which is designed to reflect the cost of a particular service or infrastructure. The tax itself does not pay for the service, or in fact anything at all. It is impossible in our monetary system for central government taxes to pay for anything.

Taxes levied by central government do not fund government spending. The idea that there is a limited amount of money in the country and that government has to extract it from the populace before they can spend it is a myth. It actually works the other way round.

Every year we fill in a tax return, and the government collects tax revenue. Return = 'come back'; 'revenue', from the French 'revenir', meaning 'to return'. There's a clue. Taxes are money that the government has spent on things being returned to the government. It is impossible to pay taxes until the government has created and spent the money into existence.

How can that be? Well government creates money when it spends. That money pays for stuff like roads, railways, schools, healthcare, police, defence, welfare, infrastructure and services. Then the government taxes some of it back. What is left in circulation is people's savings - their nest eggs, pension funds etc.

By standard accounting practice there has to a be a debit for every credit - money as a credit asset can't just exist in an accounting vacuum. If someone has a net credit asset, someone somewhere else must have a matching debit liability.

When people have net financial assets, where is the net financial liability?

That's the government. The only entity that can sustain a net financial liability is a currency issuing government. That's because it the currency ISSUER, not like you and me, who are currency USERS. When they issue the currency by spending it, they generate a deficit on their books, which creates a surplus on the books of the currency users. That is the way it has to be, it cannot work any other way. Any attempt to reduce the deficit will only result in removal of currency from people's pockets, remove their disposable income, reduce their savings, put businesses out of business, make people poorer and homeless.

The currency issuer can spend as much currency as they like, because they create it as they spend. They can't run out of it or go bust. Never, ever. They don't have to 'balance the budget', it's neither feasible nor desirable.

That idea (that the government has to balance the books) is meaningless drivel of the first order. Utter bollocks. The proposal to make over 75s pay for a TV licence because it is needed to fund the BBC is a downright lie.

The TV licence fee pays for nothing. When it is received by the government it just reduces the amount of deficit that was created when the money was first spent into existence. It is impossible for taxes to pay for anything.

It is never a question of limited funds, it is only a question of limited resources. If the country can withstand government spending without causing inflation then there is no problem. Removing more money from the economy by taxing people on the worst state pension in advanced western economies is utter criminal stupidity"...

Here's a 2 minute video explainer:
http://www.barrons.com/video/what-is-modern-monetary-theory/A1156A5...

... yes... it was written by my friend Malcolm Reavell... excellent letter which neatly sums up the stupidity of the arguments on both sides... 

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