Best of the Week
Most Popular
1.Stock Market in DANGER of Strangling the Bears to Death - Nadeem_Walayat
2. Germany Pivoting East, Exit US Dollar, Enter Gold Standard - Jim_Willie_CB
3.Flight MH17 – Kiev Flash Mob's Last False Flag? - Andrew_McKillop
4.Stock Market Crash Nightmare! - Nadeem_Walayat
5.Gold - The Million DOLLAR Question... - Rambus_Chartology
6.Gold And Silver – BRICS And Germany Will Pave The Way - Michael_Noonan
7.The Jewish Selfish Gene, People Chosen by God, Everyone Else is Goyim to Kill - Nadeem_Walayat
8.The Israeli Promised Land Dream - The Criminal Roadmap Towards “Greater Israel”? - Felicity Arbuthnot
9.Which Way is Inflation Blowing? Watch Commodities - Gary_Dorsch
10.U.S. Economy Quarterly Review and Implications for 2014-2015 - Lacy Hunt
Last 5 days
The Three Stocketeers: One for All and... - 2nd Aug 14
Significant Day in the Bitcoin Market - 2nd Aug 14
Gold Prices 1971 - 2014 in 3 Waves - 2nd Aug 14
Gold’s Seasonal Sweet Spot - Strongest Months Are August, September, November And January - 1st Aug 14 - GoldCore
Flagrant Rush To War In The Ukraine Crisis - 1st Aug 14
What Russian Sanctions Mean for Your Money - 1st Aug 14
The West's Reckless Rush Towards War with Russia - 1st Aug 14
Gold Price Advance Capped by the Dead Cat Dollar’s Recovery - 1st Aug 14
Big Banks Shift to Lower Gear Banking Operations - 1st Aug 14
Africa: New Land of Investor Opportunity? Pointing to the Positives - 1st Aug 14
Turning a Clinical Eye on Biotech Stocks with High Potential Investor Reward - 1st Aug 14
Gaza Death Cloud Hangs Over Sheffield Eid Festival 2014 at Millhouses Park - 1st Aug 14
Israels Final Solution of Turning Gaza Concentration Camp into a Grave Yard - 31st July 14
US Failure: Unintended Consequence - 31st July 14
Stock Market Breakdown! - 31st July 14
Echoes Of The Great War – Only An Echo In The Elite Mind - 31st July 14
This is Bad News for U.S. Economy and Stock Markets - 31st July 14
The Important Impact of This “Secret” Gold Agreement - 31st July 14
The Something For Nothing Society Death Spiral - 31st July 14
The Social Memory Dump, Shredding Society - 31st July 14
How Safe Are Unallocated Gold Bullion Accounts? - 31st July 14
USDJPY Big Bear Market - 31st July 14
No More School in Gaza Because All the Children are Dead Chant Israel's Jewish Fundementalists - 31st July 14
The Iron Dome Inside The Heads of Israel’s Leaders - 31st July 14
You Know a Politician or Talking Head is Clueless When….. - 31st July 14
Don't Get Married to Your Gold Stocks—It's a Performance-Based Relationship - 31st July 14
Stock Market Parabolic Collapse - Sowing the Seeds of the Next Depression - 30th July 14
How to Profit from the Russia Ukraine Conflict - 30th July 14
Greenspan: U.S. Economy Running Out of Buffer; Stock Market to See Significant Correction - 30th July 14
Rogue States And Loony Tunes - 30th July 14
Anne Elk’s Theory On Brontosauruses - 30th July 14
Our Totalitarian Future - Totalitarianism NOW! - 30th July 14
Stocks Bear Market Formation Revealed - 30th July 14
We Just Found “The Future” - 30th July 14
What the “Steak Bandit” Says About Asset Values - 30th July 14
Designer War By Default - Seven Types of Elite Madness - 30th July 14
Death of the U.S. Dollar? Gold an Inflation Hedge? Really? - 29th July 14
We’re Ready to Profit in the Coming Gold Price Correction—Are You? - 29th July 14
Their Economy Will Collapse, Including Ours - 29th July 14
Silver Prices – Megaphone Patterns - 29th July 14
Real U.S. Interest Rates - Fed Exit a Blue Pill? - 29th July 14
Why Israel Should NOT Exist, Just Like Any Other Rogue State - 29th July 14
Gold Still Looking Good - 29th July 14
Silver Price Set To Star - 29th July 14
Our Population Growth Totalitarian Future - 29th July 14
World War 1 Cause and Consequences - The Planned Destruction of Christendom - 29th July 14
Will Crashing Commodities Crash the Stock Market? - 29th July 14
Ukraine MH17 - Washington Thinks Americans Are Fools - 29th July 14
Stock Market Bubble Warning - 29th July 14
Gold Price and U.S. Dollar’s July Rally - 28th July 14
Second Quarter Corporate Earnings: Marching Toward a Strong Economic Recovery - 28th July 14
Time to Put a New Economic Tool in the Box - 28th July 14
Mossad in Gaza, Ukraine and the Cult Of The All-Powerful Elite - 28th July 14
Elliott Wave Gold Price Projection Since 1970 - 28th July 14
Investors Remain Uncertain As Stock Fluctuate Near Long-Term Highs - Will The Uptrend Extend? - 28th July 14
The Mass Psychology Of Decline - 28th July 14
Will the US Destroy the World? - Don’t Expect to Live Much Longer - 28th July 14
GDM and GDXJ Gold Stocks In-depth Look - 28th July 14
Stock Market One FINAL High? - 28th July 14
What It Means - Paradigm Collapse And Culture Crisis - 27th July 14
Wall Street Shadow Banking: You Can’t Taper a Ponzi Scheme: “Time to Reboot” - 27th July 14
6 Tips for Picking Winning Gold Mining Stocks - 27th July 14
Israel's War on Children, Exterminating the Palestinians Future - 27th July 14
Guilt By Insinuation - How American Propaganda Works - 26th July 14
Surprise Nuclear Attack On Russia To Liberate Ukraine - 26th July 14
Use "Magic" Of Gold/Silver Ratio To Greatly Increase Your Physical Holdings - 26th July 14
Derivatives Market Species Origins - Abuse, Props and Risks - 26th July 14
Stock Market Manipulation and Technical Analysis - 26th July 14
China’s Stock Market Finally Looks Like A Buy - 26th July 14
Ed Milliband Fears Israel Jewish Fundamentalist Gaza War Massacres Backlash - 26th July 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Biggest lie in Stock Market History Revealed

SMI Labour Benefit's Culture Catastrophe - Come to Britain and We Will Pay Your Mortgage!

Politics / UK Politics Mar 13, 2013 - 02:20 AM GMT

By: Nadeem_Walayat

Politics

You want a FREE £200k+ House? Then come to Britain, and we will give this and much more, only thing you need to do in return is to vote Labour. Britain continues to suffer the consequences of rampant Labour government bribery of the electorate in terms of expanding the width and breadth of the benefits culture that has resulted in enticing approx 1/5th of those of working age that could work ( 8 million) to instead park themselves onto benefits for life where the name of the game is how to maximise benefit receipts rather than engage in productive activity.


The net effect of the benefits culture is that for MOST working families, at the time of the last election it was far, far better to park themselves onto benefits than to work, the resulting £200 billion total benefits bill of which at least £40 billion is out and out fraud as a consequence of those that could work making a life style choice to instead become baby making factories to maximise benefits without consequences for the impact of having children that they have little intentions of actually looking after has on wider society.

This article focuses in on one aspects of rampant benefits fraud as illustrated by Support for Mortgage Interest (SMI), which the Labour government introduced to bribe approx 240,000 additional vested interest voters.

The public spin on SMI was that it supports those who become unemployed, paying the interest on mortgages for upto 2 years of upto £200,000 at a flat rate of 6.08% which translated into a maximum benefit of £12,160 per year on top of ALL other benefits. This despite the fact that the policy of zero interest rates had long since pushed mortgage interest rates to about HALF the amount of benefit being paid out! So the tax payer had been effectively paying Interest AND Capital as in a typical 3% mortgage rate the benefit covers the interest on a mortgage upto £400,000!

The Collation Government eventually cut the interest paid from 6% to 3.63% which still amounts to an annual benefits payment of mortgage interest to a maximum of £7,260 for what amounts to a life-time mortgage interest payments.

SMI ENCOURAGES BENEFIT FRAUD

The effect of the SMI benefit is at least four fold -

1. Those through no fault of their own who lose their jobs with sizable mortgages, are going to be LESS likely to take on similarly paid employment in the future again due to the impact of this mortgage benefit i.e. a family of 5 (2+3) on benefits would need to earn an estimated gross income of more than £32,000 to over come the total amount of benefits that they are likely to be in receipt.

2. It encourages benefits fraud in terms of staying on benefits for life whilst encouraging under-declaring work i.e. as self-employed cash in hand so as to maximise benefits, as it is relatively easy for benefits fraudsters to overcome the 2 year time limit such as switching to claim income support for low income and working less than 16 hour work weeks or claiming that they have a disability.

3. The benefit is not only available to those of working age but also to pensioners upto a £100k mortgage, this defeats that whole purpose of what the benefit was said to be for, i.e. as a temporary support for those who become unemployed, when more than half the claimants are pensioners, which effectively means that the tax payer is paying for the next generations inheritance rather than prompting the downsizing and freeing up the housing stock which the likes of the bedroom tax encourages.

4. It encourages systematic benefits fraud in terms of citizens and also acts as a beacon to attract immigrants who have already mapped out how they will proceed to defraud the system and achieve their goal of obtaining a property with an over £200k mortgage so as to maximise benefits income potential whilst engaging in undeclared work as the state supports their children whom they live with but don't live with to further maximise benefits. This is one of the reason's why immigration to the UK has been about TEN Times that the last labour government promised it would be.

The above are just 4 examples as there are many more variations to this fraudulent benefit such as paying for second homes i.e. towards buy to let property portfolios.

The coalition government is desperately attempting to unwind labour's benefit for life culture through several mechanisms including introducing a £25,000 benefits cap and the bedroom tax, thought both of these are repeatedly watered down to dilute savings in the annual benefits bill or to entice those that could work to actually start to contemplate working (legally).

The problem that the coalition government faces is that it is relatively easy for the Labour party to promise the electorate debt fuelled bribes over responsible government the price for which is ultimately paid for by inflation. Therefore the more responsible the coalition movement acts, the less likely they are to get re-elected. Which means times-up ! Get ready to expect just as big voter bribes during 2014 that the last Labour government made which translates into INFLATION.

The coalition government has already acted to bribe voters by extending the SMI scheme into 2016. This effectively acts to PROP UP house prices.

The system of bribing voters to get elected is designed to bankrupt Britain. Protect your wealth now from incompetent corrupt politicians before inflation erodes away the value of your hard earned savings see my latest ebook in my Inflation Mega-trend series Stocks Stealth Bull Market 2013 and Beyond (FREE DOWNLOAD).

Source and Comments: http://www.marketoracle.co.uk/Article39459.html

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2013 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of four ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series.that can be downloaded for Free.

The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 600 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014