Entitlement, the welfare state gone mad

We live in a country which embraced the disease that is socialism after world war 2 and it has been the ruination of the country. Today the dead hand of the state extends to more than half of the economy. No wonder we are rapidly being overtaken by countries which were in poverty just a couple of decades ago. And one of the worst consequences of socialism is the creation of a dissolute feckless underclass. When working for a living is optional there are many who will choose to become parasites and live off the state, creating babies as an income source. The Blair and Brown governments made the problem much worse by throwing money at it. They were too stupid to realise that state money was the cause of the problem, not the solution to it.

Here are some examples of where dependency culture has gone badly wrong.

Moira Pearce, 34, has three sons and seven daughters by four different men and has never worked. She receives more than £30,000 a year tax free from the state (you and me) but wants more so has applied to local charities for help.

Gary Bateman, 46, and Joanne Shepherd, 36,live in a free 5 bedroomed house and receive more than £30,000 a year tax free from the state. Joanne Sheppard has 12 children by three men and has not worked for 19 years since she became pregnant with her first child aged 17. Mr Bateman has been out of work for as long as he can remember.

Anita Hull 38 and her unemployed partner Steve Dalton 46 live in a large detached house with nine of their 13 children. They have not worked for 20 years and receive £38,324 of our money every year tax free. Recently they bought a £1,700 60 inch plasma television.

Unemployed 24-year-old Keith MacDonald has had seven children by seven different women and has never paid a penny towards looking after them. The cost of looking after his offsprings costs the taxpayer about £60,000 a year.

Carl and Samantha Gillespie and their 12 children live in a detached 8 bedroom period house with a garden and its own driveway in a desirable area of Newbury, Berkshire. This is paid for by the taxpayer, as is the £44,000 a year they receive in benefits because, obviously, they are unemployed.

A 21 year old man with learning disabilities is flying to Amsterdam to have sex with a prostitute. All paid for with taxpayers money. His social worker says: ‘Refusing to offer him this service would be a violation of his human rights.’

Many, many more similar cases can be found here.

It is pretty obvious that socialism and the welfare state has broken our society. Hard working people are expected to pay half of what they earn to the state in taxes, and the state then squanders that money by encouraging a feckless underclass who have no intention whatsoever of contributing to society. To these people all that they can see is their entitlement. And they always want more as you can read in the articles linked above.

Britain is bankrupt due to the profligate and out of control spending of Gordon Brown. It is only the timely election of the coalition with their sensible budgetary policies that have stopped us going the way of Greece. Yet we are still spending billions on a welfare state that is massively abused by many of its recipients.

The only answer is to get rid of the socialism, shrink the state and adopt libertarian policies. This is what all the successful countries in the world have done. In China, supposedly a communist country, the state is just 20% of the economy. This leaves 80% to get on with making money, no wonder their economy is growing so fast, soon they will be richer than us. The people listed above would find life very different there.

Sarkozy and Merkel fail again

Puppets

As discussed many times before on the blog the creation of the Euro (the world’s biggest currency) allowed counties to behave differently than when they had their own currencies. It gave them a higher credit rating so they could borrow more easily and at lower interest rates. To prevent excesses there was the Stability and Growth Pact (SGP) that limited each country to an annual budget deficit no higher than 3% of GDP and a national debt lower than 60% of GDP (oh how they wish these were the case now). With punitive penalties for breaking this. France then did break it and wasn’t punished which opened the floodgates for very badly managed countries to spend, spend, spend (much as Gordon Brown also did in the UK). Presumably with the assumption that ultimately the other member states of the Euro would bail them out.

But now the chickens have come home to roost, the markets realise that they have been sold one thing but have bought something entirely different. We stand on the very edge of default by the PIIGS countries of Portugal, Italy, Ireland, Greece and Spain with Belgium looking very unhealthy and France looking like it will go over the edge if the others fail. And the populations of these countries are up in arms because they can no longer enjoy the lifestyle that other people were paying for.

The response of the politicians has been a disgrace with abysmal leadership. Individual countries are “rescued”, sometimes repeatedly, just before they fall over the edge. But even with these rescues Greece will inevitably fail and already the world’s banks are writing down the value of the Greek bonds they hold. The question is what will the contagion be when Greece goes, how much of a domino effect will we see?

The IMF has come up with some bail outs, the European Financial Stabilisation Mechanism (EFSM) and the European Financial Stability Facility (EFSF) were set up but they were always too little too late. But the reality is that if the seven countries listed above start falling successively into default then all the money in the world won’t stop it. The debts are just unsupportable.

For a country going into default isn’t the end of the world. Those that have done it in recent times like Russia and Argentina have come out of it with far better and far stronger economies. It just hurts a lot at the time and that hurt is also felt by everyone who has lent to that country.

If the Euro countries had any sense they would have a simple rule that if any country defaults then it gets kicked out. This would work in so many ways to prevent problems and to handle them when they occur. But the EU politicians are doing the exact opposite, they are trying to keep everyone in, no matter what the cost. But it is something they may well not be able to afford or be allowed to pay for by their voters.

So another week, another crisis, this time in the middle of August when everyone is on holiday. Sarkozy and Merkel had to break theirs and meet up in Paris. Their solution is the idea of a Eurozone government, which basically means France and Germany telling the other Eurozone countries how to run their economies. It is the thin end of the wedge of fiscal union and of making Europe into a federal country like America, with what are now sovereign countries becoming mere states, something the population of Europe don’t want but something that many politicians have been working towards.

Meanwhile the market would probably like to see Eurobonds as the answer, borrowing jointly and severally guaranteed by all the Eurozone members. This would be fun with Greece going back to spend, spend spend with other people’s money.

The problem with the Euro is that it is fundamentally technically flawed. It tries to bundle together disparate countries with disparate economies and disparate attitudes to financial probity. The constituents are insufficiently heterogeneous for it to work. Sweden has been very sensible and very crafty in the way it has kept out of its obligation to join.

So it is time for us to break out yet more popcorn and watch from the sidelines as this story evolves. As it must because the current situation is impossible to maintain. We are in for some fireworks.

About Bruce on Politics

Bruce on Politics is a blog with regular articles. Here is it's web address: http://www.bruceonpolitics.com/

A look at how our society is run, based on a lifetime of observation and a healthy dose of cynicism. Experience tells me that the state is vastly too big, that the freedom of individuals has been taken away to an enormous extent and that we have a dependency culture that saps enterprise.

The new coalition government is socialist, just as all governments since the war have been. Their back is against the wall because of a trillion pound deficit caused by a profligate Labour government that lost control of the government departments that it was supposed to be running. Under the circumstances all the coalition can do is pragmatic fire fighting. Let’s hope that their trimming of the state is just the beginning and not just a temporary measure for whilst funds are short.