CONTRIBUTION · 20th March 2010
Thomas La Porte
When the Bank of Canada has currency printed, the money should remain as national credit and should never be converted into national debt to private financial institutions, as is presently the case. In other words, the government should never be borrowing its own money at interest from financial institutions which are privately owned in whole or in part.
Money from the Bank of Canada should be spent interest-free when paying for social programs. This is precisely how we funded health care in the first two decades following its introduction. Whenever money is loaned at interest to other institutions, the interest earned on the initial loan should be owed to the Bank of Canada. With no national debt, taxes could be lowered without jeopardizing social programs.
The current practice of converting our currency into debts to private institutions, which in turn re-loan the money at compound interest many times over to other parties, establishes a network of international financial institutions of vast wealth competing against, and ultimately exerting control over, the very governments which generated the wealth in the first instance. To state the matter clearly, democracy is challenged and subverted by private financial interests.
The resources of a nation, especially the productivity of its citizens, is the only sound and legitimate basis for legal tender. Debt can never be a legitimate basis for legal tender because compound interest results in greater debt than there is currency in the system to pay on debt. As Ellen Hodgson Brown (2008, pg. 100) states: “A dollar borrowed at 6 percent interest, compounded annually, grows in 100 years to be a debt of $339.” It is impossible to repay $339 for each and every dollar printed. This leads to the inflation of prices and the devaluation of currency. For example, a 1950 U.S. dollar has declined by 88% in purchasing power to a value of 11.5˘ in 2008 (Brown, 2008, pg. 101). Is it any wonder that workers perpetually seek greater wages and benefits?
Inevitable crashes in the economy result where creditors increase their concentrations of wealth through bankruptcies and the speculative manipulation of stock markets which, due to such techniques as short selling, are ultimately nothing more than pyramid schemes. After all, the value of a stock is the mere perception of its value in the short term. In plainer words, the current economic system is predatory and requires the exploitation of vast numbers of people. It is no accident that economic wealth is backed by military force, and neither of these is adequately restrained by democracy, human rights or ethics. Corruption is systemic.
The only solution is to bring economics under the control of democracy and a rule of law which respects human rights, builds consensus and shares wealth. None of this will happen without rejecting national debt and replacing it with national credit. Indebtedness is not the foundation upon which to build democracy, liberty or prosperity. Our creative and productive power as citizens, expressed as national credit, is the only means to genuine, sustainable progress. The New Democratic Party should return to the inspiration of its predecessor, the Co-Operative Commonwealth Federation Party, making national credit the foundation of its policies.
[photo of Tommy Douglas]
Comment by Carrie La Porte on 27th March 2010
You spelled our name wrong but given the intelligence of your comments, that is more than forgiveable. Your own article was well done and all of your remarks are well-considered and succintly expressed.
A timely reminder Mr. Laporte
Comment by Ron Savard on 21st March 2010
Indeed, a tyrannical economic system that uses debt sleight-of -hand and obfuscation to bamboozle the people is the enemy of democaracy - both political and economic. As the American people are about to vote on the medical bill proposed by the Democrats, the world wonders: Will the parsimonious and exclusive designs of America's economically secure citizens win out over the 30 million compatriots that they would exclude from the basic right to medical care? Or will the righteous and inclusive finally see justice done? We in Canada realized our social victory when our great statesman, Tommy Douglas of the CCF party, introduced and successfully legislated Medicaire. We stand in support of our American neighbours and fervently wish them the basic right to medical care, regardless of their status, race, religion or political stripe.