7 August 2014

Beneficiary fraud recovery a drop in the bucket

“The $47 million saved in the last twelve months through a crackdown on welfare fraud is just a drop in the bucket” Democrats for Social Credit Deputy Leader and Finance Spokesperson Chris Leitch said today.

“On top of which, most of the amount saved has been already been spent due to the costs involved in the 4614 investigations and 893 prosecutions.

“The net result is a negligible saving, an army of investigators and prosecutors getting paid, and mountain of cases clogging up an already overloaded court system.

“If the Government was serious it could have saved that much in just four days, without all the un-necessary wastage”.

“Currently the government pays out $12 million every day from tax revenue in interest on loans sourced mainly from overseas owned banks.

“While trumpeting its amazing “savings” on beneficiary payments, it continues to provide a direct line of corporate social welfare to overseas owned banks which helped produce them a massive profit last year alone of over $4 billion dollars – most of which was shipped out overseas.

“If the government was serious about savings it would stop paying interest on money the banks create out of thin air, and adopt the recommendations of a 2012 International Monetary Fund report and source its funding from the publicly owned Reserve Bank at no interest.

The report published in August 2012 titled the “Chicago Plan Revisited” analysed a proposal by eminent economists Henry Simons and Irving Fisher, for the separation of the monetary and credit functions of the banking system.

They claimed that “Allowing the Government to issue money directly at zero interest, rather than borrowing that same money from banks at interest, would lead to a reduction in the interest burden on government finances and to a dramatic reduction of (net) government debt, given that irredeemable government-issued money represents equity in the common wealth rather than debt”.

The report says that under the Chicago Plan, “what would cease to exist is the proliferation of credit created, at the almost exclusive initiative of private institutions, for the sole purpose of creating an adequate money supply that can easily be created debt-free.”

The adoption of the proposals would see inflation reduced to zero, the report says.

That means the government could fund its requirements from the publicly owned Reserve Bank at no interest rather than borrowing it from overseas owned financial institutions.

It could do so because all banks create new money out of thin air when they make loans.

The Bank of England confirmed this in its quarterly bulletin issued earlier this year “One common misconception is that banks act simply as intermediaries, lending out the deposits that savers place with them.”

“…..rather than banks lending out deposits that are placed with them, the act of lending creates deposits. Commercial banks create money.”

“Of the two types of broad money, bank deposits make up the vast majority - 97% of the amount currently in circulation. And in the modern economy, those bank deposits are mostly created by commercial banks themselves.”

The government should put its own house in order before looking any further into beneficiaries’ finances.

ENDS

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