Canada's $614,307,000,000.00 Debt Solution

[PIK]

Great debate here lads , keep it up. This is very interesting.

[Albert_Einstein]

Not if he was right.

Was he right? Russ claimed that Armstrong predicted the current debt crisis, whatever that means. Did he predict specific numbers and dates or just that we'd be in a lot of debt?

Either Russ is arguing that decisions made by governments and people since the 1980's have been irrelevant to the current situation or he is arguing that Armstrong was able to accurately predict the behaviour of large numbers of people over 30+ years. Which is it?

Spinelessness and foolishness? Or a system out of control?

To the extent that the second element exists, it was caused largely by the first. One of the hazards of democracy is that leaders tell people things they want to hear (Sure, we can cut taxes and still give you everything you want) regardless of the longer term consequences.

It's interesting that both in Canada and the US, the parties that actually produced surplus budgets were the more centrist ones.

The fact is they created a boom which always results in a bust and that means a crisis for government revenues resulting in deficit spending and increased debt as they try and pump up the economy with new money. The boom and bust cycles are getting increasingly frequent and increasingly unwieldy.

If you re-read your own statement, I think you'll find it is not a fact at all - rather, it is your interpretation of the facts. Research will also tell you that boom and bust cycles have always been in evidence in capitalist economies. And you need only examine what happened during the 1930's to see what happens during a bust cycle when the government stops spending.

The best explanation I've heard for the current failure of economies to restart themselves is that almost all of the financial gains over the past 30 years have gone to the top 1%. Since the money is not being spread around and the ultra-rich can only buy so much stuff, the economy slows down.

The whole purpose of the current economic structure is stability and that requires predictability both of the policies implemented and the market forces themselves. Predictability is a valuable commodity and it depends upon correct analysis of information.

I don't agree that the whole purpose of the current economic structure is stability. The aim of almost every government is growth, not stability.

Predictability is a very valuable commodity but I would argue that any meaningful level of predictability in a capitalist economy is logically impossible. Here's why: There is money to be made by predicting economic behaviour. If people can reliably predict economic behaviour, they will act in ways that will destroy the predictability.

If Armstrong could really predict economic behaviour accurately, the dumbest thing he could do would be to start up an investment company. He risks giving away his secret. It would be much smarter to keep as low a profile as possible and invest in ways that would not bring attention.

Of course, someone with power will not easily give it up or back. The people need to have it back. They had it when government was not in control of the money supply, the market set interest rates and production was accomplished based upon real savings and not debt created out of thin air..

Oh, you mean like when we had the great tulip bulb bubble? Or the South Seas bubble?

When was the golden era of which you speak?

Edited July 25, 2013 by Albert_Einstein

[Rocky Road]

http://www.vhemt.org/

http://crisisofcivilization.com/

These are some interesting sites on the current predicament facing humanity.

The first is basically a website that advocates a voluntary die-off,

the second is a link to a video about the Crisis facing Global Civilization...it being a nexus of issues such as terrorism, unsustainable debt, food shortages, peak oil, water shortages, resource wars, and climate change.

Food for thought!

[August1991]

These are some interesting sites on the current predicament facing humanity.

The first is basically a website that advocates a voluntary die-off,

the second is a link to a video about the Crisis facing Global Civilization...it being a nexus of issues such as terrorism, unsustainable debt, food shortages, peak oil, water shortages, resource wars, and climate change.

And I thought the better question was to wonder why so many people, after 2008, feel better when they pay cash.

-----

When a few people choose to pay cash, there's no problem. In a world of several billion people, when even a few million people choose to pay cash, there's now a problem for hundreds of millions others.

The story of 2008 is the resort to cash, bank accounts, "clear numbers on a sheet of paper". It is a resort to honesty. (Huh?)

Edited July 31, 2013 by August1991

[Demosthenes26]

I'm coming into to this debate late and I'm not really sure who to reply to or what I should be responding to. But here's my two cents.

Many people in this debate have argued for the elimination of public debt. It should be noted that government debt is important to the function of our economy. T bills and other government bond (at least CND bonds) are considered to be risk free investments by investors. This is necessary because it creates a benchmark for All other bonds to compare to. Furthermore the risk free element is attractive to investors seeking to balance the risk of their portfolios. In fact many Large portfolios like insurance, are required by law to have a certain portion of their portfolio be government bonds.

For these reasons amongst others governments are actually continuously selling bonds even when they aren't running a deficit.

Also some people have argued for stopping payments to bonds. This Would not only be dishonorable to us as a nation. But also increase future lending rates and would financially ruin many of the bondholders. Creating a financial crisis like what is currently happening in Greece.

My point is government debt is necessary to our current economic structure. It isn't a bad thing unless its at risk of insolvency. Which the Canadian debt isn't.

So don't fix what ain't broken?

[AlienB]

Albert:

What has been hugely inflationary is jacking interest rates up to 20% thirty years ago to "control inflation", the fallacy of this was that government (both US and Canada) were the largest borrowers causing Canada's debt to move from 18 billion in 1974 to 614 billion now, this was like shooting yourself in the foot to slow yourself down. Were the politicians really that stupid to not use a calculator to estimate what high compounding interest on those bonds would lead to at those high rates? There is no intention to pay anything back, they will just keep the debt rolling until it crashes.

I agree with Martin Armstrong that the only way out is to halt all payments on the bonds and issue local spending credits for them, the alternative is to let it run its course to the point that the 'zero bid day' shows up for the bond markets which would be followed by a bond market crash of biblical proportions, sky-rocketing interest rates and the implosion of the economy which is what Armstrong thinks will happen between 2016 and 2020.

Gold will surge to at least $5000 as confidence is totally lost in the governments. The politicians are gutless and will not do long term planning and do not want to give up their power, so as Armstrong says we are going to crash and burn.

You think we can get out of debt by raising taxes and or cutting expenditures, if they raise taxes that will cause the velocity of money to slow down leading to more stagflation and hoarding of money by the productive members of society since there is not purpose in investing and working hard if the government is just going to grab your profits. Canadians are already handing 43% of their income over to governments at all levels - federal, provincial and municipal.

I do not see anyway out of this, we are screwed and Mr. Armstrong's long standing debt crisis prediction is going to unfold, the train is going to hit the mountain.

Russ the problem with halting bond payments is that they are owed. It is a contract, breaking contract that is done legally isn't exactly ethical or moral.

While you can stop issuing new bonds, you can't stop honouring bonds that are due. The precedent is horrible.

[AlienB]

I'm coming into to this debate late and I'm not really sure who to reply to or what I should be responding to. But here's my two cents.

Many people in this debate have argued for the elimination of public debt. It should be noted that government debt is important to the function of our economy. T bills and other government bond (at least CND bonds) are considered to be risk free investments by investors. This is necessary because it creates a benchmark for All other bonds to compare to. Furthermore the risk free element is attractive to investors seeking to balance the risk of their portfolios. In fact many Large portfolios like insurance, are required by law to have a certain portion of their portfolio be government bonds.

For these reasons amongst others governments are actually continuously selling bonds even when they aren't running a deficit.

Also some people have argued for stopping payments to bonds. This Would not only be dishonorable to us as a nation. But also increase future lending rates and would financially ruin many of the bondholders. Creating a financial crisis like what is currently happening in Greece.

My point is government debt is necessary to our current economic structure. It isn't a bad thing unless its at risk of insolvency. Which the Canadian debt isn't.

So don't fix what ain't broken?

I think you are wrong, it is not "important" to our economy, it is a rape of our economy.

The government shouldn't be borrowing money. It has borrowed money year after year after year, and that means more and more tax dollars go to pay debt instead of current year sources. What this means is a heavier tax burdeon for fewer services.

It is downright an injustice to the public to be held under debt when a quarter of a trillion dollars and then some is taken from the public for private interests.

Even with a incredibly harsh treatment in paying down the debt it would take 10 to 15 years to pay down. Under past government it will never be paid down, and half of GDP will continue going to private interests as more and more tax dollars go to the ultrarich bond holders.

There is absolutely no benefit in bond issues. NONE. It is a public rape.

If the government can't pay it needs to downsize, people were taxed to pay down the war debt in WWI, the continuation of income tax to fund private pet projects and pay the ultrarich is an abuse of the general public without just cause.

Edited August 1, 2013 by AlienB

[August1991]

It should be noted that government debt is important to the function of our economy. T bills and other government bond (at least CND bonds) are considered to be risk free investments by investors. This is necessary because it creates a benchmark for All other bonds to compare to. Furthermore the risk free element is attractive to investors seeking to balance the risk of their portfolios.

Demo, you make a very good point. Government bonds (government debt) make private transactions easier.

If the government were to pay back all its debts, and remove bonds/currency from circulation then ordinary people would have no means to conduct private transactions - or they would have to rely on an alternative method.

State-backed bonds/money facilitate private transactions, and help people save.

----

As people's portfolios grow, and their transactions increase, it makes sense for the government to issue more State-backed paper to facilitate trade and saving. It is not surprising that over time, government debt is increasing.

Historically, such public debt was referred to as confidence in the State. Rightly so.

Edited August 2, 2013 by August1991

[Demosthenes26]

I think you are wrong, it is not "important" to our economy, it is a rape of our economy.

The government shouldn't be borrowing money. It has borrowed money year after year after year, and that means more and more tax dollars go to pay debt instead of current year sources. What this means is a heavier tax burdeon for fewer services.

It is downright an injustice to the public to be held under debt when a quarter of a trillion dollars and then some is taken from the public for private interests.

Even with a incredibly harsh treatment in paying down the debt it would take 10 to 15 years to pay down. Under past government it will never be paid down, and half of GDP will continue going to private interests as more and more tax dollars go to the ultrarich bond holders.

There is absolutely no benefit in bond issues. NONE. It is a public rape.

If the government can't pay it needs to downsize, people were taxed to pay down the war debt in WWI, the continuation of income tax to fund private pet projects and pay the ultrarich is an abuse of the general public without just cause.

Let me ask you this why does the Canadian government need to pay off its debt? If you consider that yield rate are current floating around 1.2% for 1year government bonds. While inflation is targeted annually for 2% you quickly realize, that although nominally the government is losing money. Per inflation theory the government is actually gaining money in the real sense.

So the "ultrarich" are actually losing real money by investing solely in gov't bonds.

And its not a question of needing bonds to maintain its service. As I stated the government will be issuing bonds even while its in surplus. The immediate practical use of bonds are that the Guarantee a constant cash flow while tax revenues are being collected. As previously stated Gov't Bond are a necessary tool for investment.

[Social Justice]

I have read much theory posted here. From my perspective there is only one way to pay off the national debt. That would involve actually handing over money to the people that we borrowed from. There is no magic wand, even in bankruptcy the debt gets paid. There have been some folks suggesting we not pay our debts, that is folly and fraught with disaster. Why not simply approach the lenders and negotiate a resolution to the problem by proposing a compensation package in lieu of taxation. Provide a viable return on the investment for the banker over short term and watch them leap at the opportunity. A vast majority of our public debt is held internally and this option is available. External debt must be repaid as per contract. This is a simple math exercise, its not rocket science.

[FutureCanadian]

1) Not spend as much they take in

2) Grow the GDP

Nominal GDP figures aren't really a problem in and of themselves.

[Demosthenes26]

I have read much theory posted here. From my perspective there is only one way to pay off the national debt. That would involve actually handing over money to the people that we borrowed from. There is no magic wand, even in bankruptcy the debt gets paid. There have been some folks suggesting we not pay our debts, that is folly and fraught with disaster. Why not simply approach the lenders and negotiate a resolution to the problem by proposing a compensation package in lieu of taxation. Provide a viable return on the investment for the banker over short term and watch them leap at the opportunity. A vast majority of our public debt is held internally and this option is available. External debt must be repaid as per contract. This is a simple math exercise, its not rocket science.

1)not all CND bond holders are Canadian. Some kind of tax settlement would not appeal to them. Also this option would reduce revenues requiring either a tax hike, services cut or a bond sale.

2) government debt is only a problem when it approaches insolvency (interest exceeds revenue) governments are assumed to exist continuously and there for it does not need to worry about its debts as it can keep paying off the interest without actually repaying the principal sum.OR where it cease to exist its debt would be the least of its concern.

3) THE MATH ON THIS STUFF IS HARDER THAN ROCKET SCIENCE. To put it bluntly we can put a man on the moon. We can only make an educated guess as things like the inflation rate.

Edited August 12, 2013 by Demosthenes26

[cybercoma]

1) Not spend as much they take in

2) Grow the GDP

Nominal GDP figures aren't really a problem in and of themselves.

Pretty big oversimplification. Have you considered how you cut spending, while growing the GDP in a recession or depression like we've had recently? The government needs to do the exact opposite and that's cut spending when times are good and increase spending when it's bad. This is how you smooth out the economic cycle. The problem is that government's get all this cash rolling in during the good times and they want to spend it. Then they have nothing left when it's needed and they go into debt trying to do their job smoothing out the economic cycle and counteract white collar criminals destroying the economies of the world.

[FutureCanadian]

Pretty big oversimplification. Have you considered how you cut spending, while growing the GDP in a recession or depression like we've had recently? The government needs to do the exact opposite and that's cut spending when times are good and increase spending when it's bad. This is how you smooth out the economic cycle. The problem is that government's get all this cash rolling in during the good times and they want to spend it. Then they have nothing left when it's needed and they go into debt trying to do their job smoothing out the economic cycle and counteract white collar criminals destroying the economies of the world.

Well therein lies the problem. A problem not unique to any country actually, but you're right.

It is easier to smooth out economic cycles vis a vis Keynesian ideas when one has done a good job maintaining fiscal balance during the good times than the bad.

Not all fiscal measures have the same economic multiplier though, so it is possible to still deficit spend but in a way that increases long-term growth in addition to short-term growth (still have to maintain that G in the lovely GDP equation).

The real problem is once the economy gets back going on a strong, steady pace and the budget can be balanced (or as close as possible given projections and revisions) is how to keep it within a steady range that doesn't swing too far one way---either to too large a surplus and then taking out of the economy or too large a deficit and not maintaining a good position for future downturns.

[Social Justice]

i see this debate has evolved

1)not all CND bond holders are Canadian. Some kind of tax settlement would not appeal to them. Also this option would reduce revenues requiring either a tax hike, services cut or a bond sale.
2) government debt is only a problem when it approaches insolvency (interest exceeds revenue) governments are assumed to exist continuously and there for it does not need to worry about its debts as it can keep paying off the interest without actually repaying the principal sum.OR where it cease to exist its debt would be the least of its concern.
3) THE MATH ON THIS STUFF IS HARDER THAN ROCKET SCIENCE. To put it bluntly we can put a man on the moon. We can only make an educated guess as things like the inflation rate.

I am compelled to respond,

Let me begin by stating that before there were banks there was no debt. The original bank, Bank of England, lent money to the Crown on request and to this day the Government of England has owed the Bank of England a great deal of money that it has yet to repay. A great deal of time and a great deal of paid interest has been allocated to this debt. Fast forward to today and the entire system of government is buried in debt world wide.

Debt is a very real issue, it has been since its inception and society has been conditioned to tax and spend their little hearts out. Each calculated tax dollar is removed from circulation in principle. That is a big deal, a very big deal. Removing currency from circulation translates into a a shrinkage of the money supply which by definition creations inflationary pressure. That form of pressure once exerted has been historically proven to be detrimental in its impact to income tax rates. Each rise to the consumer price index combined with a corresponding rise to taxation rates creates steps of disposable income reductions that are not recoverable from anywhere but the upper class. In very real terms the vast majority of the public are detrimentally impacted through this process. The bottom line to the majority of the public is very simply disposable income. Rising debt levels create increasing taxation which reduces disposable income and detracts from consumer spending. One way of describing the problem is to clearly state that we are taxing ourselves into debt.

You can run an army of economists, lead by a heard of accountants to use a veritable plethora of media to prove how well the system works. It does work if you are the bank, most of us are not the bank. The system does not work, unless you are just reading numbers. In the real world a family does not last long borrowing more than it earns, but in the unreal world of the international monetary and financial systems, it does. The burden of debt repayment is not important to the government because the government is not a real person. A real person suffers consequences for their actions but governments do not. The reality of national debt is that it is an impediment to rises in the national standard of living. In my mind the role of government is to lead the population in an effort to raise the standard of living not detract from it.

Any citizen raising a family can attest to the fact that increased taxation is a very bad idea. I find it strange that anyone would actually support the concept of government removing even more money from their pockets, but I guess they are the ones that can afford it. Let me finish my response with this thought; We are taxing our way into poverty because we can. We are indeed that stupid.

[Demosthenes26]

i see this debate has evolved

I am compelled to respond,

Let me begin by stating that before there were banks there was no debt. The original bank, Bank of England, lent money to the Crown on request and to this day the Government of England has owed the Bank of England a great deal of money that it has yet to repay. A great deal of time and a great deal of paid interest has been allocated to this debt. Fast forward to today and the entire system of government is buried in debt world wide.

Debt is a very real issue, it has been since its inception and society has been conditioned to tax and spend their little hearts out. Each calculated tax dollar is removed from circulation in principle. That is a big deal, a very big deal. Removing currency from circulation translates into a a shrinkage of the money supply which by definition creations inflationary pressure. That form of pressure once exerted has been historically proven to be detrimental in its impact to income tax rates. Each rise to the consumer price index combined with a corresponding rise to taxation rates creates steps of disposable income reductions that are not recoverable from anywhere but the upper class. In very real terms the vast majority of the public are detrimentally impacted through this process. The bottom line to the majority of the public is very simply disposable income. Rising debt levels create increasing taxation which reduces disposable income and detracts from consumer spending. One way of describing the problem is to clearly state that we are taxing ourselves into debt.

You can run an army of economists, lead by a heard of accountants to use a veritable plethora of media to prove how well the system works. It does work if you are the bank, most of us are not the bank. The system does not work, unless you are just reading numbers. In the real world a family does not last long borrowing more than it earns, but in the unreal world of the international monetary and financial systems, it does. The burden of debt repayment is not important to the government because the government is not a real person. A real person suffers consequences for their actions but governments do not. The reality of national debt is that it is an impediment to rises in the national standard of living. In my mind the role of government is to lead the population in an effort to raise the standard of living not detract from it.

Any citizen raising a family can attest to the fact that increased taxation is a very bad idea. I find it strange that anyone would actually support the concept of government removing even more money from their pockets, but I guess they are the ones that can afford it. Let me finish my response with this thought; We are taxing our way into poverty because we can. We are indeed that stupid.

No.

You wrote a lot and I don't think I'll be able to address all your points But here's me trying.

Debt has existed as long as money has existed, and likely before that we can find provisions in hammurabi's code regarding the relationship between debtors and debtees. Government debt as we know it Comes from the Italian wars. But this is a different debate entirely

I have yet to say debt is not an issue. It is required to maintained at a responsible level and governments need to ensure that It doesn't reach insolvency. However the whole debt doesn't need to be paid off. Your view is far too reflective of home economics and missing far too much macro economics. Consumers need to pay off debt because their interest accumulates faster than the inflation rate. The result is the amount you pay is worth less than the future value. For governments the opposite is true interest rates are generally lower than inflation rate so the amount paid is less than the future value.

Also the tax basis will also be increasing as gdp increases. So taxation will not necessarily be increasing with the debt.

Your argument about the money supply is wrong. Government debt has no direct effect on the money supply. That's determined by the overnight loans, foreign exchange rate or the amount printed. In Canada its determined by the overnight loans rate, which is set by the B.O.C.

In addition inflation is determined by the rise/ fall in consumer spending and its consequences on demand and supply. To say that a fall in money supply would cause inflationary pressures doesn't make any sense.

Debt and taxation are not black holes and don't drain the money supply they are part of the cycle.

If governments where to stop using debt as a finance tool the effect most certainly would be an increase in taxation. Projects would have to be paid in advance, the government would have to create reserves for day to day financing.

[Social Justice]

No.

You wrote a lot and I don't think I'll be able to address all your points But here's me trying.

Debt has existed as long as money has existed, and likely before that we can find provisions in hammurabi's code regarding the relationship between debtors and debtees. Government debt as we know it Comes from the Italian wars. But this is a different debate entirely

I have yet to say debt is not an issue. It is required to maintained at a responsible level and governments need to ensure that It doesn't reach insolvency. However the whole debt doesn't need to be paid off. Your view is far too reflective of home economics and missing far too much macro economics. Consumers need to pay off debt because their interest accumulates faster than the inflation rate. The result is the amount you pay is worth less than the future value. For governments the opposite is true interest rates are generally lower than inflation rate so the amount paid is less than the future value.

Also the tax basis will also be increasing as gdp increases. So taxation will not necessarily be increasing with the debt.

Your argument about the money supply is wrong. Government debt has no direct effect on the money supply. That's determined by the overnight loans, foreign exchange rate or the amount printed. In Canada its determined by the overnight loans rate, which is set by the B.O.C.

In addition inflation is determined by the rise/ fall in consumer spending and its consequences on demand and supply. To say that a fall in money supply would cause inflationary pressures doesn't make any sense.

Debt and taxation are not black holes and don't drain the money supply they are part of the cycle.

If governments where to stop using debt as a finance tool the effect most certainly would be an increase in taxation. Projects would have to be paid in advance, the government would have to create reserves for day to day financing.

Government all around the world is the same, and it is the very root of the paradigm confronting people today. The reality for government is not the reality for an actual person. Man created government, not government created man. Government is a thing given legal standing by man. This non living thing has been legislated to be treated under the law of the land in the same way a living person is. The same is true for corporations, they are given the legal status of a living citizen. They have all of the legal rights as any other living citizen. The relevance of this is that it is a fundamental precept upon which the rest of society has been based upon. It is flawed, it is a paradigm.

Debt was not created by banks, I spoke figuratively. Yet since the creation of the modern banking system, governments have been in debt to banks. Commonly accepted public perception is that governments control their money supply through the issue of fiat currencies. If that is true then they should never have gone into debt in the first place because they could simply issue currency as they needed it. Since governments are in debt, they never were in control of the money supply, the money supply controls them. It is a paradigm.

Taxation has numerous names all designed to create a revenue stream to fund the operations of government. While it is true that no money is actually removed from circulation in the process of taxation, the manner in which the government treats living and non living citizens is completely different. A withholding tax is applied to living citizens, not legal citizens and in a very real sense a living citizen has a personal loss of their own money supply whereas a legal citizen does not. It is a paradigm.

The entire debate surrounding the current debt problems will lead to reforms in the central banking systems already in place. Those systems are in dire need of change five decades after leaving the gold standard. Today less than 10 percent of the entire money supply worldwide was created as hard currency, more than 90 percent was created as interest bearing debt. Currency is issued and regulated by governments and debt is issued by and regulated by private interest banks. The practical applications of the legislative efforts has created a system that leaves the governments responsible for the money supply without control of it. It is a paradigm.

[Demosthenes26]

Government all around the world is the same, and it is the very root of the paradigm confronting people today. The reality for government is not the reality for an actual person. Man created government, not government created man. Government is a thing given legal standing by man. This non living thing has been legislated to be treated under the law of the land in the same way a living person is. The same is true for corporations, they are given the legal status of a living citizen. They have all of the legal rights as any other living citizen. The relevance of this is that it is a fundamental precept upon which the rest of society has been based upon. It is flawed, it is a paradigm.

Debt was not created by banks, I spoke figuratively. Yet since the creation of the modern banking system, governments have been in debt to banks. Commonly accepted public perception is that governments control their money supply through the issue of fiat currencies. If that is true then they should never have gone into debt in the first place because they could simply issue currency as they needed it. Since governments are in debt, they never were in control of the money supply, the money supply controls them. It is a paradigm.

Taxation has numerous names all designed to create a revenue stream to fund the operations of government. While it is true that no money is actually removed from circulation in the process of taxation, the manner in which the government treats living and non living citizens is completely different. A withholding tax is applied to living citizens, not legal citizens and in a very real sense a living citizen has a personal loss of their own money supply whereas a legal citizen does not. It is a paradigm.

The entire debate surrounding the current debt problems will lead to reforms in the central banking systems already in place. Those systems are in dire need of change five decades after leaving the gold standard. Today less than 10 percent of the entire money supply worldwide was created as hard currency, more than 90 percent was created as interest bearing debt. Currency is issued and regulated by governments and debt is issued by and regulated by private interest banks. The practical applications of the legislative efforts has created a system that leaves the governments responsible for the money supply without control of it. It is a paradigm.

Do you know what a paradigm is?

A paradigm is a conceptual framework. What are you trying to say repeating yourself?

As for the rest of your arguments they're unclear as to what your trying to say. I really don't want to write another essay. but there's just so much wrong with what you wrote.

To start corporations are only "persons" in that they are recognized as a legal entity and are taxed. They share the some of the same rights as people they have special rights (is the can issue shares) but also they are have rights denied To them like the right to vote. The corporations are people is a popular misconception which stems from a US supreme Court decision which allowed corporation to make campaign contributions the same way people do. It was in essence "corporations have the same right to free speech as living persons". But not corporations are people and this is not the case in Canada. Is this a paradigm?

As I stated before the money supply in Canada is determined by the overnight loans rate set by the bank of Canada. The debt has no direct bearing on this. And governments have tried to print off money to pay off their debts. However this goes against what money actually is. Which is a representation of wealth. Printing off excessive amounts of money only causes inflation. Which is why central banks don't just print money to satisfy the needs of money. As well the only the government has of the BOC is the appointment of the governor of the BOC. Is this a paradigm?

Your opinion on Taxation doesn't make any sense please elaborate.

Changes to current system could improve things. But nothing you've said is a real issue. Please read an introductory economics text book before responding.

Edited August 15, 2013 by Demosthenes26

[Topaz]

I found this article dealing with Canada's finances and the road to the World Order of one central banking system. Even though the article was written in 2009, there are many things that have happened and are happening. http://isiria.wordpress.com/2009/04/07/a-new-world-order-one-currency-one-central-bank-on-government-no-democracy/

[Smallc]

Reputable news sources Topaz... That's what you need to use.

[Social Justice]

Corporations were conceived to provide limited liability for venture capitalists to invest in large high risk financial ventures. That is an interesting fact, a law designed to protect investors. Grand in concept, but look what we have done to it. The same thing applies to the banking industry, another grand concept, but look what we have done with it. What predates both things is government, where both things were legislated into reality. Our entire society now revolves around governments , business, and banks. These are the pillars for the foundation of our society, and all social designs, programs and services are structured around them. The salient point is that we have designed our way into a corner......things are the way they are.

Taxes were created by governments to fund their operations, and income tax was created by government to pay government debt. While some may not see income tax as a problem, I do. Income tax discriminates against living citizens, who suffer from a withholding tax, and are denied the opportunity to invest levied taxes. Those funds withheld are a true reduction in disposable income, which by any definition is an impediment to any consumer spending index. In my view income taxes are regressive in economic terms. I believe income tax to be an issue.

[guyser]

, and income tax was created by government to pay government debt.

Created to fund war.

[dre]

I dont think its ethical for the government to issue any long term bonds at all, and it should only issue short term ones in an inflationary environment.

They should not be allowed to issue bonds that mature later than end of their elected term in office. Some of these bonds being sold now wont mature for 50 years. How is it ethical to make promises on behalf of people that are not even born yet? How is it ethical for a government to defer payments on their mandate to future governments that may not even support it?

Now a real "cash and carry" system would be tough because the government sometimes has to deal with expensive emergencies. In this case there should be special bonds such as war bonds, disaster relief bonds etc, that are allowed to have a slightly longer period of maturity... but even those should cap out at about 10 years.

Edited August 16, 2013 by dre

[Topaz]

Reputable news sources Topaz... That's what you need to use.

You could be right but then again, do plane fly into buildings??? ANYTHING is possible now days and there many very rich people who would like to rule the world.

[August1991]

I dont think its ethical for the government to issue any long term bonds at all, and it should only issue short term ones in an inflationary environment.

Quickly reviewing this thread, I think that dre you have put your finger on the source of confusion.

As individuals, we are told to have few debts and to pay them promptly. (Good advice in general, but it depends on the asset and the rate.) But as a society, the story is different. It makes no sense for a society to live with few debts, or even to pay its debts.

The problem is in the so-called Fallacy of Composition. (Check it on Wikipedia. The article is not bad.)

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As individuals, it is wise to save, pay debts. But for society as a whole, a State for example, it makes no sense to reduce debt. In any civilized society, a snapshot will always show debt between people. If debt is increasing in a society, that may even show that people trust each other more. Is that bad?

Hence, in Canada at any moment, a statistician may see rising debt, between individual Canadians. Is that bad? I dunno.

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If that argument doesn't work, let me try another: The State, like the Catholic Church, lives forever. If you could live (and work) forever, how long would your mortgage be? Heck, why is a 25 year mortgage considered safe but a 35 year mortgage is not? If I could live and work for 100 years, I'd go for the long rate.

Which leads to a much more serious question: why should individual Americans borrow at high interest rates when their Presidents (Reagan, Bush Snr, Clinton, Bush Jnr and Obama) can borrow at much lower rates?

I fear that the US federal government has become a collective credit card scam.

Edited August 17, 2013 by August1991