Tuesday, 10 August 2010

The “safety net” is actually a hammock [updated]

Greece’s bankrupt welfare state should have been a recent wake-up call for everyone that state-enforced largesse is neither benevolent, nor affordable. NZ’s ever-growing state welfare monster has finally had a microscope applied—by a team led by former Commerce Commissar Paula Rebstock no less--though not yet any kind of scalpel. The hope, a vain one perhaps, is that the former might engender the latter.  We shall see.

The welfare state itself is unsustainable. That much should be clear to any serious student of politics. In its current form it is a fairly modern invention —the “mature” welfare state and the mechanisms of finance and banking on which it relies are barely six decades old, and on the scale now involved barely half that—and any honest commentator would have to say it’s an experiment that’s failed.

It is a political ruse by which one group of people—”the needy”--seek to make themselves wealthy at the expense of another by means of that great fiction, the state. It is a ruse based on a moral subterfuge—that one person’s need is a claim on another’s life and production. But like every other ruse, it can’t last.

“There are two kinds of need involved in this process: the need of the group making demands, which is openly proclaimed and serves as cover for another need, which is never mentioned—the need of the power-seekers, who require a group of dependents in order to rise to power. Altruism feeds the first need, statism feeds the second, Pragmatism blinds everyone—including victims and profiteers—not merely to the deadly nature of the process, but even to the fact that a process is going on.” *

The needy and the greedy—one needing largesse; the other greedy for political power—both feeding parasitically from the group who keep them both afloat, the producers, who never figure in their thoughts except as anything more than the owners of wallets ripe for plucking.  The needy and the greedy, in both of whom is engendered the disease of Entitle-itis.

“There is only one institution that could bring about [this kind of dependency}: the government—with the help of a vicious doctrine that serves as a cover-up: altruism. The visible profiteers of altruism—the welfare recipients—are part victims, part window dressing for the statist policies of the government.” *

When Germany’s military dictator, Otto Von Bismarck, first began the welfare state on which all others were first modelled, he at least knew what he was doing.  He knew it was a means by which citizens could be turned into subjects.  Those today who still go along with it, thinking mistakenly that extracting wealth from one group and giving to another is somehow a kindness, fail to see either the moral cannibalism on which the system is based, nor where such a corrupt system will end up.

“So long as the power-seekers clung to the basic premises of the welfare state, holding need as the criterion of rewards, logic forced them, step by step, to champion the interests of the less and less productive groups, until they reached the ultimate dead end of turning from the role of champions of ‘honest toil’ to the role of champions of open parasitism, parasitism on principle, parasitism as a ‘right’ (with their famous slogan turning into: ‘Who does not toil, shall eat those who do')” *

As a system, it is both morally and economically corrupt.

“Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale. …
”The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which -- through a complex series of steps -- the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold. The holder of a government bond or of a bank deposit created by paper reserves believes that he has a valid claim on a real asset. But the fact is that there are now more claims outstanding than real assets…” *

As you can perhaps now understand, the very process of government money creation, which just brought the world to its knees, is itself based on having a welfare state against which the Reserve Bank may issue its paper money.

“The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves… Deficit spending is simply a scheme for the confiscation of wealth.” *

One might have thought that former Commerce Commissar Rebstock might have understood some of this, or even mentioned how minimum wage laws and youth rates make many people effectively unemployable at those rates, but sadly neither her remit in this inquiry nor the comments in her report go that far.

For perhaps the first time ever, however, a report has been issued that actually looks at some of the problems involved in a state welfare system in which one in eight adult New Zealanders is ensnared, and the facts it outlines are so stark it seems few wish to confront them.

  • In 1960, one in fifty adult NZers were taking a benefit. The proportion is now one in eight adult NZers, and one in five children.
  • Of these present 356,000 adults in name only,
    • nearly half have spent more than half of the last five years spending other people’s money;
    • only 20 percent have any sort of work expectation;
    • only a handful actually attend the “training programmes” in which the likes of PIta Sharples, Phil Goff and Paula Bennett place so much stock.
  • The majority of disabled people are actually in paid work. So much for primary moral justification of the welfare state—that it is necessary to help those who can’t help themselves because of a physical infirmity.
  • Only one in three mothers with dependent children is in paid work, and only one of every two solo mothers.
  • Most children who grow up with a parent on a benefit end up one themselves in their adult life. That’s a big unsustainable “tail” being built up.
  • Half of the 16- & 17-year olds who receive a benefit spend half of their next decade on the mooch—perhaps a result of intergenerational emulation.
  • Even during the boom period of 2004 to 2007, when one in ten adult NZers were receiving a benefit, employers were still finding it difficult to find staff—making it clear that this is not an “unemployment” problem in the sense understood by any of the mainstream commentators.

Written by the unlikely hand of former Commerce Commissar Paul Rebstock, this report on NZ’s unsustainable, unaffordable, iniquitous and destructive welfare system barely scratches the surface of the welfare state’s real problems, but even what it does say is far too much for NZ’s juvenile media to handle, apparently.  Because as Lindsay Mitchell points out, they aren’t up to even understanding it, let alone discussing it intelligently. Says Lindsay Mitchell,

_Quote The paper is titled Long-term Benefit Dependency: The Issues. Author Paula Rebstock said yesterday that it is not about the unemployment benefit which has actually been operating quite well over recent years. The focus is on the DPB, sickness and invalid's benefit… the report is about long-term welfare dependency and what drives it - the type of dependency that persists during good economic times.”

Yet as Lindsay points out, not only did TV One’s alleged news show lead by carefully crunching numbers that failed to address the core points of Paula Rebstock’s report, all of which they could have easily got from the report’s fact sheet, we had to suffer morons like Sue who can’t see past their own noses insist this are all about “a lack of jobs,” fools like Phil Goff and the Labour Party bloggers at The Double Standard wheel out the line that the government has “manufactured a crisis.”

Which is certainly true, but emphatically not in the sense that either Fool Goff or his fellow fools at the Sub-Standard meant.

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