(I am sending out this post in the hopes that someone knows and can translate this into French. I am sending it out for Richard Priestman, the author, who wishes to send it to 2 French speaking Canadians. I support his initiative to get the word out that the Bank of Canada can help Canadians find financial stability. If anyone can translate this please contact me at firstname.lastname@example.org, or by leaving a comment after this post. Thanks. Oh, and the post is interesting)
“Will Quebec remain egalitarian or will austerity lead to a socially fractured and economically divided society as it has in the rest of Canada?”
“The protests decry what Charest s Finance Minister Raymond Bachand refers to as the coming “user pay culture,” in which basic rights, such as accessible post-secondary education and inexpensive daycare, are now referred to in an Orwellian twist as “entitlements” to be paid for by the end user.”
Cuts to education and inexpensive day care (and other public services, public infrastructure and environmental protection) are unnecessary because there would be sufficient money if billions of dollars were not spent on unnecessary public debt interest arising from government borrowing from the private market, including commercial banks, instead of from Canada’s central bank, the Bank of Canada, at effectively zero interest. This (zero interest) occurs because the federal government owns the Bank, and all interest paid into it is returned to the government minus a little for administrative costs.
Unnecessary interest paid on public debt by federal government – $31-billion (2011)
Unnecessary interest paid on public debt by our three levels of government: – $60-billion ($165-million a day) (1)
Unnecessary interest paid on Quebec’s public debt – $9.855-billion (2011-2012) (2)
In 2011-2012 the people of Quebec paid $27-million a day on public debt interest.
Question: How much could colleges and universities lower student fees with a cash infusion of $27-million (which is the amount Quebec spends on public debt interest in one day)?
The “Occupy Kingston” group and similar groups across the country have said to the community, “Wake up! Our government is run by banks and large corporations! The ‘1%’ have more wealth than the rest of us; we have an unjust society, and the gap between the wealth of the ‘1%’ and the rest is growing.” One of the things that is contributing to that gap is the unnecessary and mostly undeserved interest we pay on public debt to our 3 levels of government of $165 million a day, $5 a day for every man, woman and child in the country – $60-billion a year! Our governments dig deep into our pockets every day through taxes of all kinds, take our money and send it to the banks and wealthy bond holders to pay the interest. This helps to make the gap wider.
The federal government could reduce the interest paid on public debt by borrowing more from the Bank of Canada at near zero cost and less from private financiers. So, why doesn’t it do that? The government is up to its neck in interest-bearing debt of over $800 billion – and when you owe that much you are inclined to listen to the wants of your creditors over the needs of ordinary Canadians. Government indebtedness to private financiers gives that sector undue influence over government policy decisions. It is not in the interest of banks and wealthy bond holders for the government to borrow from the Bank of Canada, but it is in the interest of ordinary Canadians. Not only would it save billions in debt charges, but more importantly it would reduce the influence of private sector financiers on government policy decisions. This would occur because use of the Bank in this way provides government an alternative source of financing for its debt – and therefore more independence to adopt policies which are in the interest of most Canadians even if not to the liking of its major bond holders and the banks.
Provinces could borrow from the Bank of Canada, too, but this would require the federal government’s co-operation and willingness to rebate the interest paid. An alternative is that the federal government would borrow funds from the Bank of Canada for the use of the provinces.
Can we change the situation? Yes, but only if we reduce the influence of banks and wealthy bond holders on our government by electing supportive politicians.
To save public education (and other public services, public infrastructure and the environment) we must say to our politicians and political candidates, “If you want my vote you have to agree to support use of the Bank of Canada for financing public debt to invest in public services, public infrastructure and protection of the environment”. Note: this use does not include financing for aggression or aggressive weaponry.
If, in a given riding, none of the party affiliated candidates agrees to this, the community could then organize to elect an independent candidate. We have a choice!
It could be thought of as a new kind of politics!
President, Kingston Chapter
Committee on Monetary and Economic Reform