http://www.canadianactionparty.ca/cgi/page.cgi?aid=593&_id=128&zine=show
Should Canada merge its currency into that of the U.S.?
by George Crowell, posted on 10:45 PM, May 30, 2007
If Canada should allow its currency to be merged with that of the U.S., it would surely lose its publicly owned Bank of Canada. Through the Bank of Canada, which was established in 1935, the federal government has the power to borrow money in huge quantities essentially interest-free, and to make such interest-free funds available not only for its own use, but also for provincial and municipal expenditures.
Should Canada merge its currency into that of the U.S.?
On The Current , May 28, there was discussion prompted by a comment last
week from David Dodge, Governor of the Bank of Canada, who said that a unified
currency with the U.S. is possible. In this discussion, with views for and
against this development, there was no mention of what many informed Canadians
see as the primary reason why Canada should keep its own distinctive currency,
and should never allow currency union with the U.S..
If Canada should allow its currency to be merged with that of the U.S., it
would surely lose its publicly owned Bank of Canada. Through the Bank of
Canada, which was established in 1935, the federal government has the power to
borrow money in huge quantities essentially interest-free, and to make such
interest-free funds available not only for its own use, but also for provincial
and municipal expenditures. Such borrowing enabled Canada to get out of the
Great Depression and to finance its participation in World War II. Continuance
of this practice until about 1975 played a key role in creating Canada's
post-war prosperity and in making possible our enviable social programs. As
federal governments have increasingly catered to the private commercial banks,
this practice has greatly declined. Government indebtedness with huge interest
payments has resulted, and our social programs, which, we are told, we can no
longer afford, have been under attack.
Our governments across Canada must presently give priority to paying more
than $60 billion each year out of our tax receipts for interest to private banks
and money-lenders. Through borrowing from the Bank of Canada this expense could
be vastly reduced. If we lose the Bank of Canada, we will lose this
extraordinary potentiality just at a time when public expenditures are
especially urgently needed to protect our environment from such dire threats as
global warming, and when our public infrastructure requires major repair and
rebuilding, to say nothing of all kinds of needs to strengthen our social
programs--especially medicare. We have underused and misused the Bank of
Canada. Rather than lose it altogether in a currency union with the U.S., we
need to revive its full usefulness in support of creative public policy.
We are told that borrowing from the Bank of Canada would be inflationary.
We recognize that inflation could occur if the money-creation powers of the
private banks were not restrained while the Bank of Canada again created a
larger portion of our money supply . Therefore we insist that the reserve
requirement for the private banks, which was surreptitiously eliminated in 1991,
be restored to the Bank Act. This would enable the federal government through
the Bank of Canada to reduce the amount of money that can be created by the
private banks while increasing the amount created by the Bank of Canada to meet
public needs. Even without using the Bank of Canada for interest-free loans, we
need the reserve requirement to help in the fight against inflation. At present
the only tool available is raisiing interest rates--which first augments
inflation before beating it down by driving the economy into recession. The
reserve requirement is a far more kindly method for resisting inflation.
Some of us for many years have been urging politicians, primarily at the
federal level, to resurrect the lending power of the Bank of Canada. Why is
there so little response on this crucial issue? Some prefer the system as it
is, some do not sufficiently understand the issue, some feel the issue is too
complicated for the public to understand, and some probably fear backlash from
the private banks. Now that the possibility of merging our currency into that
of the U.S. is increasingly advocated in the centres of power, it is urgent for
Canadians to understand clearly what they stand to lose--and what they could
gain. I hope that The Current and other CBC programs will facilitate thorough
discussion of this crucial issue.
Thank you.
George Crowell (a member of the Committee on Monetary and Economic Reform,
www.comer.org )
43-10 Rossmore Court
London, ON N6C 6A3
519-686-7522
georgecrowell@cogeco.ca
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This is all conspiracy CRAP??
Isn't it......
http://www.gold-eagle.com/editorials_99/mbutler110799.html
Such fiat dollars are invested or deposited in U.S. banks or the U.S. Treasury by most non-oil producing, underdeveloped countries to protect their currencies and generate oil credit. Today foreigners hold 48 percent of the U.S. Treasury bond market and own 24 percent of the U.S. corporate bond market and 20 percent of all U.S. corporations. In total, foreigners hold $8 trillion of U.S. assets. Nevertheless, the foreign deposited dollars strengthen the U.S. dollar and give the United States enormous power to manipulate the world economy, set rules, and prevail in the international market.
Thus, the U. S. effectively controls the world oil-market as the dollar has become the "fiat" international trading currency. Today U.S. currency accounts for approximately two-thirds of all official exchange reserves. More than four-fifths of all foreign exchange transactions and half of all the world exports are denominated in dollars and U.S. currency accounts for about two-thirds of all official exchange reserves. The fact that billions of dollars worth of oil is priced in dollars ensures the world domination of the dollar. It allows the U.S. to act as the world's central bank, printing currency acceptable everywhere. The dollar has become an oil-backed, not gold-backed, currency. http://www.thirdworldtraveler.com/Iraq/Iraq_dollar_vs_euro.html
Money backed by gasoline, think about it. Is it what the Fed wants?
What happens if the currency becomes worth less than the gasoline required to burn it...?
remember gold and silver certificates they had a date on the note thats the amount per gallon you would receive value on date issued. It would be like buying oil futures. The paper is allready worthless at least the note would have value.
When I was 15 I lived in a town called Bottineau N.D. I was reading a book on coin collecting and in the book it said "the U.S. had a $10 gold coin" half the size of the french coin equivalent in value at the time. So the U.S. mint melted down the french coin and made two U.S. coins from one French coin and then bought the louisiana purchase. I also read in the same book about the Canadian coins and when they stoped using silver. It was in the early 1970's Living next to the Canadian border the year 77 or 78. I went to a bank in Boisivain, Manatoba and asked for $200.00 in dimes sat in my van took out all the silver coins. drove to Minot N.D. and sold them at a Holiday Inn confrence room and got around $18 an once made a lot of money back then. Did I mention I was only 15 years old at the time. I munipulated the market as a kid I can only imagine what the Fed can do. My point is gold and silver is not as safe as people think. I think todays money could be a receipt for oil $100 note = 100 gallons. You may laugh at this but it seems to me thats exactly what the Fedeal Reserve wants to do , but with Iran and Iraq oil, and yes Canada's oil and Mexico's oil. Hence the NWO. The Amero backed with oil. Which is better than thin air.
The problem that caused the melting down of coinage in the 70's was the fact that the currency did not have a gold standard. The government had issued so much paper that the value of each paper dollar had declined so much that the cost(and value) of the material put in the coinage(still hard currency, of course), had become so great in comparison to the paper money that the value as an exchange medium (because it was pegged to a paper dollar that was now worth less), had significantly fallen below the cost of production.
This is not an indictment of hard currency, it is an indictment of the paper currency that had fallen so much in value that it would no longer buy what it used to. Of course, the value was still in the coinage, so people took it back out!
I have no problem with sharring currencies. As long as it is gold and silver coined money. And no fractional banking
I love that idea!
The whole world could share a common currency on that basis.
Fractional banking is just a means of robbing wealth from people who have earned it, and giving it to those who haven't.
the amusing thing about this article is that one of Canada's political parties is actually addressing monetary reform, actually talking about reducing the national debt, avoiding inflation, and recognizing the 'hidden tax', even if their underlying economic theory is way off target.
one would hope for such progress here in the US...
in a quirky way.
Odd isn't it that the atmosphere could have changed so much since the days of Trudeau and Mulroney.
Of course, it took getting to the point where almost half the budget was spent on interest to get us there.
And at least one of our political parties thinks it is evil to run a surplus because they believe we are commiting a crime against the poor.
Is still a bad idea even if your reasoning is faulty.
I'm not sure I ever thought that the US could manage its financial affairs worse than Canada, but I do have to give them credit for trying, and finally of succeeding.
The Canadian federal government and most of the provinces now run a surplus, and as a consequence government indebtedness is falling.
God help America, cuz it will take a miracle.
Of course, they could elect Ron Paul, or Bob Barr...
Perhaps I missed a news flash, but last time I checked there was only one province not running with a debt.
The Bank of Canada is nothing more than a collection agency for Revenue Canada, imo
Not only do the limits of the private banks need to be lowered, there also needs to be some new regulation made to the BoC.
There is nothing wrong with social programs when they are run effectively. Unfortunately that is not the current state of affairs.
Canada has been in serious need of an overhaul for years. We are a North American society still trying to function with an old European system in place. A system that has been patched and repaired rather than corrected.
Merging currency with the US is simply not practical right now. But that doesn't mean a NA currency couldn't be a possibility in the future.
News flash! A debt is not the same as a deficit. At a quick glance, the federal government, BC, Alberta, Newfoundland, and Saskatchewan all were running surplusses. After those, I didn't bother looking any further.
You can say a debt and deficit is not the same thing but the only difference is language technicality. Both are debt but debt refers to the set debt while deficit refers to the 'flowing debt'. In the red, is in the red in my opinion.
And yes, social programs can be run effectively. Other countries, although higher taxed, have social programs for advanced education, health care (way beyond what we see in Canada), and childcare. The citizens pay more tax but they don't need to worry about old age health issues in regards to income nor where the money will come from for their child's education. The problem we have now is like that of every other sector of our governemt. Too long we have let them carry on without accountability or proper checks and balances.
> And yes, social programs can be run effectively.
are you from mars? honestly. look up what 'effective' means. you can do this lookup online.
> Other countries, although higher taxed, [...] child's education.
where is all this money coming from that's being spent on these flawless social programs?
have you had any contact with a government institution ever?
have you ever been in a position where you were applying for government financial help?
i suggest you try it. quickly you will see that they're not too willing to be of much help.
there's a good reason for that.
there is no money to cover these programs.
> The problem we have now is like that of every other sector of our governemt. Too long we have let them carry on without accountability or proper checks and balances.
you are very confused as to what the problem is. quiet frankly i'm having trouble understanding what it is that appealed to you about RP's philosophy.
When the free market provides a service, its effectiveness is measured by the market. That number on the bottom line is a pretty effective measure of how well you are doing what you do. What is the measure in government, "Hey, I need a bigger budget to keep on doing the same things I've been doing forever!" How do you improve a beaureacracy, when there is no objective measure of performance?
Governments are good at building beaureacracies, which is to say empires, which are only good at making themselves bigger. Show me any government program that didn't succeed at that one central task - at making itself bigger.
Another of the beauties of government run programs is that the longer they run, the less money ends up serving the original object of the program, and the more money gets spent increasing the size of the delivery system.
The solution is to take government out of the equation wherever possible, and that is the message of Ron Paul. He didn't say let's make a more efficient FED, he said let's get rid of the FED. He didn't say let's make a bigger military, he said let's shrink it and bring the troops home. He didn't say let's make a more efficient DEA, he is opposed to it.
i'll have to start taking a clue from you and express my ideas in a more eloquent fashion.
very well put.
amen
First of all, debt and deficit are not the same thing. A deficit means that you are increasing your debt. A surplus means that you are decreasing your debt, and that means all of the difference in the world. When you are decreasing your debt, you are decreasing the amount of interest you are paying on your debt. The debt is the sum of all of your deficits. At least if you are running a surplus you are decreasing your future liability and the future drag of interest payments on your economy. In the case of the federal government in Canada, a couple of years ago the Harper government proposed that a 20 billion dollar surplus be spent to pay down the debt and that the interest saving be passed on to the taxpayers as a tax refund. The howling from the idea and the left was instantaneous. Granted normal economic growth, the government could have paid down the debt in something like 25 years or less. That would have meant that interest payments on the debt could have fallen from over 30 billion out of a 200 billion dollar budget, to nothing. Liabilities for old age security could have been covered by paying off the debt.
However, they decided to spend the money instead on stuff we did not need.
It is interesting that so many people say that somebody else is effectively running social programs. In the US they say it is Canada, and in Canada they say it is Britain, and in Britain they say it is Germany and in Germany, somewhere else, it just never seems to occur where anyone is.
First of all, the social programs are a mess in the US. They are a mess in Canada - look at the medical wait lists. Look at the billions wasted in the various HRDC scandals. Look at what happened to health care in England, so bad that the death rate went down everytime the doctors went on strike. Look at the effect of minimum wage laws that keep people whose services are not worth the minimum wage unemployed. So, who do we punish with that, well shucks, it's the poor - precisely the people we were pretending to help. And then there is old age security. Of course, the problem of old age security hasn't completely hit home yet. The problem exists in the form of a massive unfunded debt.
How did our government address old age security, well they pay for the aged with revenues currently taken from young. The problem is that in the future there will not be enough young people as a proportion of the total population to support them. There will not be enough suckers to support the people who will have been robbed by their own parents with the help of an all too willing government. Willing to get elected by promising something for nothing, that is.
And that is also the promise of Social Credit - something for nothing.
But there is one truth always in this world, and that is that somebody pays. Somebody ALWAYS pays.
"First of all, debt and deficit are not the same thing. A deficit means that you are increasing your debt. A surplus means that you are decreasing your debt, and that means all of the difference in the world."
Point taken. However, having a surplus does not mean you are debt free.
I do not refer to the Britains for social examples. There are countries beyond the US, Canada and Britain.
Social programs can work if run effectively and I stick with that statement.
Look at health care (Canadian).
Currently there is no checks and balances in place. No reward for doing a good job nor penalty for doing a bad one. Doctor's are not rewarded for maintaining patient health but rather for putting a bandaid on the problem. Ensuring repeat visits, tests, medications, etc. (The reward being the almighty dollar).
There is no Country-wide computer base that keeps track of health information on each patient. It is easy as can be to go to multiple walk in clinics and get a prescription for the same drug on the same day. Then go to multiple pharmacies to fill them. If you pay for your meds, you're not going to do this. If you're on social assistance, it's almost free and those drugs can be sold for a profit.
Hospital stays are rushed and there is little to no care afterwards. If there is a problem after surgery you have to go and wait in an emergency room.
All of these little things add up to big expense. Expense that could be spent on better wages for the medical community, more equipment, at home care after a hospital stay (which would allow people to return home sooner with less change of complications.). These issues also cause more errors which in turn also costs more money.
This is only the tip of the iceberg.
The amount of money that is wasted is disgusting.
One day I'll take the time to type a real rant but for now this is enough to play devil's advocate.
oh and
"quiet frankly i'm having trouble understanding what it is that appealed to you about RP's philosophy."
Who said anything appealed to me about RP at all? I didn't know this was a closed club.
:)
Tessa
seems rather contradictory:
"Social programs can work if run effectively and I stick with that statement.
Look at health care (Canadian).
Currently there is no checks and balances in place. No reward for doing a good job nor penalty for doing a bad one. Doctor's are not rewarded for maintaining patient health but rather for putting a bandaid on the problem. Ensuring repeat visits, tests, medications, etc. (The reward being the almighty dollar).
There is no Country-wide computer base that keeps track of health information on each patient. It is easy as can be to go to multiple walk in clinics and get a prescription for the same drug on the same day. Then go to multiple pharmacies to fill them. If you pay for your meds, you're not going to do this. If you're on social assistance, it's almost free and those drugs can be sold for a profit.
Hospital stays are rushed and there is little to no care afterwards. If there is a problem after surgery you have to go and wait in an emergency room.
All of these little things add up to big expense. Expense that could be spent on better wages for the medical community, more equipment, at home care after a hospital stay (which would allow people to return home sooner with less change of complications.). These issues also cause more errors which in turn also costs more money.
This is only the tip of the iceberg.
The amount of money that is wasted is disgusting."
First you state that social programs can be run effectively, and that you give as an example a program and you list everything that is wrong with it. How does your argument support your hypothesis?
All of the things that you listed about the medicare system are only a fraction of the things that are wrong with it. Look at the wait lists that are used to ration health care, people's medical outcomes are seriously effected while waiting for rationed care. Many patients are so desperate that they vote with their feet, going south of the border to pay for service in the US, when they can't get service they have already paid for in Canada.
But the real point is this: there is no way to make a social program run efficiently because their is no way to measure economic performance. Which means that they cannot know when what they are doing is effective. Read von Mises 'Beauraucracy'.
I never declared myself to be an organized thinker. hehe
I do believe they can work but they need to be set up differently. There is currently no part of the system that works as a watchdog for abuse or inefficiency. As a result we have the issues I stated above. That does not mean they can't work, only that they need a serious overhaul.
The issue of long lines waiting for medical services is a result of wasted funds. Wasted funds means less money for medical equipment and staff. This in turn means more people waiting for care. Which in turn means when they do get care, they need more and often for a longer period of time.
Perhaps I'm an idealist.
I Do recognize that they do not work as they are now. And I do believe governments should govern and leave business to their people. The problem in Canada (one of them) is our large land mass with our rather small population. It is because of this I believe we need social programs.
And I do know the problems I mentioned are only the tip of the iceberg. As I said, I'll post up a real rant someday when I'm not here on a quick break.
Incidentally. I do believe there should be private health services as well as provided health care. But! I have as many issues with this as I do with the provided care. There is much room for abuse in the private industry as well as the public sector. Either way it costs the citizens money, whether through taxes or through inflated medical costs.
i don't believe there's any such thing as an effective government run or funded social program. there is simply no incentive to provide increasingly better and more efficient service, no competition to reduce cost.
i work for a large public university, and despite plunging state appropriations amidst our "one-state-recession", you wouldn't believe the waste i see every day. it's astounding. the only thing they've cut back on is cost of living increases for staff (but the union employees' wages go up). and people i work with regularly comment on how much easier (less work for the same pay) it is to work at the university than in the private sector.
i graduated from a small, private school which accepts no government funds - not even student loans - and the campaign to reduce administrative costs was intense; the president asked departments to cut back wherever they could, even on office supplies. after all, they had a bottom line to meet.
"There is nothing wrong with social programs when they are run effectively."
There is no such thing as an effectively run social program because by their definition a program to promote social ends can not have a goal that is not either subjective or transient and thus can never be effective.
The Canadian federal government doesn't have tthe right or the power to borrow money interest free. Borrow from who free? The Bank of Canada? The Bank of Canada has no substantial reserves of its own. Here is the link to the 2007 financial statement:
http://www.bankofcanada.ca/en/annual/2007/finstate07.pdf
It is apparent that the primary purpose of the bank is to float the money supply - about 50 billion Canadian dollars. The federal debt alone is about 600 billion Canadian dollars. How does 50 billion cover 600 billion?
The Bank of Canada can issue more paper currency (inflating the money supply) at the cost of increasing price inflation, which is simply a hidden tax on everyone. It certainly is not free money. This just the same canard that increasing the money supply by the government will not have the same effect as if you increase the money supply by changing the margining requirements of the chartered banks.
Putting a new hat on Social Credit won't make it work.