Bank of Canada and National Debt

 

Bank of Canada,the National debt and Infrastructure funding

Canada faces problems similar to those found in most ‘first world’ countries-
relatively high unemployment, stagnant wages for workers, and a struggling
economy.

Under these circumstances, investment in infrastructure is a
classic government approach to address these problems. Infrastructure-creating projects have in the
past included the building of the Trans-Canada highway system, St Lawrence seaway, creation of a public system of health care facilities including hospitals, not to
mention the largest project in recent memory- the infrastructure and equipment
necessary for Canada’s huge contribution, from 1939 to 1945, to Allied victory in the Second World War!

At the same time the rapid, constant rise in our national debt increases pressure for cutbacks in funding for, and hence services from, government programs
intended to benefit the public. This is true at the Federal, Provincial and Municipal levels of government.

How best can this investment be created, while simultaneously minimizing the effect on our national debt and social programs?

The National Debt

What is our current national debt, what affects it, and how was it accumulated?

Canada’s national debt is 645 BILLION dollars (on 10 Jul 2017)
and grows at $ 77 million dollars a day. It is estimated that at least $75 million of this daily figure is compound interest, charged to service the debt.
(error corrected May 18)

How did we accumulate such a huge debt and staggering interest charges? A clear explanation is given


here.

In 2008, a 12 year old girl from Ontario, gave part of the answer in an


address

she gave to the conference of the Public Banking Institute of America, in Philadelphia PA.

One main stream media review of the speech is given


here.

Not surprisingly, the Financial/National Post did not agree, in an article notable for its patronising contempt for a 12 year old, but
also notably lacking any accurate counter arguments. There appears to be no other negative reviews of
her speech.

The real reason for this massive debt was best expressed by
the Auditor General of Canada in his 1993 annual report, as follows:

” From
Confederation up to 1991-92, the federal government accumulated a net debt of
$423 billion. Of this, $37 billion represents the accumulated shortfall in
meeting the cost of  government programs since Confederation. The
remainder, $386 billion, represents the amount the government has borrowed to
service the debt created by previous annual shortfalls.”

The Bank of Canada- publicly owned by all Canadians

Canada is relatively unique among ‘first world’ countries, in having a publicly owned central bank- ie
one owned by the Canadian people- NOT private shareholders.
Costa Rica has one, as does the state of North Dakota This gives these organizations the ability to create money to lend to government at
minimal interest , and return the interest to its owner, their citizens.

Neither the American Federal Reserve Banks, nor the Bank ofEngland, both central banks, are publicly owned.

One


group

of Canadians have been actively trying to force the federal Government to
return to such a policy of borrowing from the Bank of Canada, using the legal
system.

Not surprisingly there is scarce mention of this in our news
media, although CBC, at least, did conduct
one


interview.

with one of Canada’s top constitutional lawyers on the subject.

It is definitely worth watching.

While our current government, like its predecessors, claims such a use of our public bank would be inflationary, this excuse does not stand
up to


analysis.

A similar explanation of national debt, including background information on our publicly owned Bank of Canada is given


here.

For a visual presentation and access to further information,   watch this


video

Money creation by commercial banks

Commercial, private banks, strive to maximize profit to benefit their shareholders.

Central banks can create money by printing it. Commercial banks create money out of nowhere, commonly referred to as ‘fractional reserve
banking.’

Martin Wolf, a member of the UK Independent Commission on Banking has said:

“the essence of the
contemporary monetary system is the creation of money, out of nothing, by private banks’ often foolish lending”

Following the economic meltdown of 2008, organizations in many


countries

have called for a reform of this questionable


practice.

The attached shortlist of links provides some some details.

Infrastructure Funding

Canada now has a new government organization. It is a
Crown Corporation called the ‘Canada Infrastructure Bank’, created in an omnibus
budget bill C-44 (recall the Liberal’s promise to eliminate omnibus bills?) passed
22 June 2017.


Concerns

have been raised about the lack of detail of the
plan, and lack of time available, for adequate study by MPs.

This ‘bank’ will enable private-public partnerships (PPPs) in creating infrastructure, but who will be the investors, what will they own
and who will


benefit

from these partnerships?

Someone else has a similar idea. Donald Trump. Not


everyone

south of the border thinks this is a good idea either, based on experience.

The solution suggested to the flawed Trump plan is:

” The
other approach would be for the treasury, Federal Reserve or Congress to create the money and just directly
invest it in infrastructure projects.

Whether funneled
through a public bank or banks, or invested directly, the funds could be provided at no or very low interest,…….. ”

taken from the Bill Moyers article linked above.

Doesn’t that sound like the approach we can already take in Canada through the Bank of Canada
if the government chose to do so??

Take Action:

don’t sit on your
hands
– our economic future as Canadians is at stake!

Access the links above.

Do your own research.

Forward the links and your findings to your friends and
relatives.

Contact your MP, MPP/MLA, other parliamentarians and their
staff, and the political parties in this country.

There is a worldwide movement to reform and change the banking
system and method of money creation. Join it!

In the 3 days it took to develop this webpage, the debt has increased by
approximately   231 million dollars!

Monetary Reform Links


http://www.publicbankinginstitute.org

Public Banking Institute

American organization promoting establishment of public banks, similar to our Bank of Canada, which is publicly owned by all Canadians!

Introduction
Universal Basic Income

SMPP English

SMPP Francais
Eggleton Letter
External Links
Suggested Reading
Feedback

This page was last updated     22 May 18


http://www.comer.org/
COMER- Committee on Monetary and Economic Reform Canadian group advocating “renaissance” of the publicly owned
Bank of Canada
as a lending source for the Federal and Provincial governments, to avoid wasteful interest payments.

http://internationalmoneyreform.org/
International Movement for Monetary Reform a global movement to democratise money so that it works for society and not against it.

https://ccc4mr.wordpress.com/
Canadian Citizens Coalition for Monetary Reform Changing the way money is created to serve society
We are a non-partisan coalition of organizations and
all concerned citizens from across Canada, campaigning to change the
way money is created in our country.

http://positivemoney.org/
Positive Money British organization. Positive Money is a movement for a fair, democratic and sustainable money system.