Economic crisis: Canadians speak out


Richard Moore

Begin forwarded message:

From: Ed Goertzen
Date: March 9, 2009 10:40:12 PM GMT
To: Richard Moore <•••@••.•••>

Hi Richard:

A friend sent me this. I think it is a copy of a letter to the editor.
Ed G

Ps: also my published letter to Oshawa Express Weekly.

Date: Sun, 8 Mar 2009 17:27:29 -0400
Subject: Canadian Labour Congress Mobilizing for Change
From: Richard Priestman 

The recent Canadian Labour Congress (CLC) statement “Labour Mobilizing for Change” is very encouraging because it shows how quickly unions can act.  It is even more encouraging that the Congress wants to focus “on finding solutions so the mistakes and flawed politics that lead to the crisis are not repeated”.  It is here that community activists concerned with the way our financial system works can help because a fundamental problem contributing to the crisis is in the area of money creation and control of credit.  If this is not dealt with we will be subjected to increased debt burden and cuts to public services.  More than that, as was pointed out, the underlying problems must be corrected so that they are not repeated.                                                                                     

 Underlying problems include the ideology of smaller government, privatization of public services and assets, foreign ownership of major industries and belief in the infallibility of the market to name a few, but money creation and control of credit is the one with which monetary reformers are most familiar.  Lack of control in this area contributed to the 3000% per cent increase in the federal debt from $18-billion in 1974 to $588-billion in 1997, gutting of social programs during the 1990’s, deterioration of infrastructure, medicare, pensions and education, and an interest burden for all levels of government amounting to $63-billion per year!   The government has been very quick to use the huge debt and interest payments to justify cutbacks and the use of surpluses to “pay down” the debt instead of investing them, as was promised, in the social programs previously gutted. 

Canadians can demand that policies be reversed, but solutions of a permanent nature (so the mistakes and flawed politics are not repeated) will not be possible until the government takes back control over money creation and credit.  These are not new ideas.   Prime Minister Mackenzie King said in 1935, “Once a nation parts with the control of its currency and credit, it matters not who makes the nations laws.”  King nationalized the Bank of Canada in 1938, but to-day it is the private financial system which decides how much credit will be available and creates the bulk of the money we use in our day-to-day lives.  A matter of such importance to society should not be left in the hands of a few profit-oriented corporations, but should be controlled by government.  In fact, the legislation to do this has existed since 1938, but for over 30 years our government has allowed private corporations to have control.  This must stop.

Correcting the problem around money creation and credit in Canada (unlike in the United States) would not be technically difficult because our central bank is owned 100% by the government of Canada.  The difficult part is to convince the government to borrow from its own bank, the Bank of Canada, to finance its capital requirements.  Currently the Bank only holds about 11% of Canada’s marketable debt; most of the rest (about 74%) is held by private financial institutions and non-residents.  Individual Canadians hold less than 5%; the rest is held mostly in government accounts.  With private financial institutions and foreigners holding 74% of the debt, Canada is at the mercy of others when it decides to borrow.  When the government borrows from its own bank it is, in effect, getting the money interest-free and therefore does NOT add to the debt burden.  Government can do much more to stimulate the economy by borrowing from its own bank.

Taking back control over money creation and credit means significantly increasing the share of government debt held by the Bank of Canada and reducing the share held by the private sector and non-residents.  No government is going to go down this road without a very angry and well informed electorate pushing them to do it – whether it be Conservative, Liberal or NDP.  That is why the CLC initiative is so very important.  That is why it should be supported and encouraged.  Monetary reformers are ready to help.

Richard Priestman                                                                                          
Kingston Chapter Committee on Monetary and Economic Reform
604 Aylmer Crescent 
Kingston ON
K7M 6H1  

To the Editor of Oshawa Express

Dear Editor

With all the billions the federal government is spending to stimulate the economy, the biggest opportunity is being neglected.

That opportunity is the failure to capitalize the next generation.

There are one excellent way that could be done.

First of all cancel student debt and make future education – and skill training – tuition free.

Lets remember that, in addition to last month’s 129,000 job loss, and more to come, we need to add thousands of graduating students who will be joining the ranks of unemployed in a couple of months. They also do not qualify for anything other than welfare.

At a time when they should be thinking about setting up family households, with all the attendant expenses of appliances and diapers, student debt is the last thing they need.

By cancelling their debt, they can become instant participants in the economy, and more likely to accept, sans debt, lower paying entry jobs.

Ed Goertzen
607 Pinewood St
Oshawa ON CA
L1G 2S2