By André Marentette, Windsor Star, April 8, 2011
“There must be a discussion, to show how experience is to be interpreted. Wrong opinions and practices gradually yield to fact and argument: but facts and arguments, to produce any effect on the mind, must be brought before it.”
– John Stuart Mill, 1806-1873
With the onset of the federal election, the following information should be known by all candidates and taxpayers alike.
In 2009, Canadians paid $160 million per day, $58,7 billion for the year, in interest on federal, provincial and municipal debt.
These costs lead to higher taxes and fees, cutbacks in public services and deterioration of public infrastructure. Much of this debt-service cost could be eliminated by greater use of the Bank of Canada to finance government investments.
Because the bank is wholly owned by Canada, all profits on its lending activity go to the government. This means that borrowing from the bank by the government is almost costless.
For years, the government borrowed from the Bank of Canada and, during that time, contrary to the fears raised by opponents of the idea, run-away inflation never occurred.
By 1975, federal net debt amounted to $19 billion. Then, the government began to shift more of its borrowing from the Bank of Canada to the private sector – especially chartered banks, insurance companies and other large corporations.
By March 31, 2010, the net debt had ballooned to $583 billion and interestbearing debt had reached $763 billion.
The interest cost to taxpayers for the federal government’s debt is currently a $29 billion drain on federal revenues.
In addition, the use of the Bank of Canada to finance public debt would reduce the influence of large corporations on government policy decisions.
We should only vote for candidates who support the use of the Bank of Canada for the purposes described above.
Our Comment.
André’s letter is a wonderfully succinct argument that is even more pertinent today than it was in 2011 for, as Michael Hudson has pointed out, we’ve gone about as far as we can go, running out economy on debt. As current figures attest, our debt has become a downright quicksand that is putting life itself – all life – at risk. (André Marentette is a long-time member of COMER.)
Élan
