dwaters dwaters:
5. Layton just sold himself in a stupid deal for the NDP. If anybody thinks that it was a good thing, the policies were good but he's gonna hurt himself when the elections eventualy comes.
The Agreement between the NDP and the Liberals to amend the 2005 budget in the best interest of the nation because it will make Canada a better place to live.
Government needs to pay attention to the preference of the citizenry in spending priorities, not just that of corporations and banks. Current polls show that Canadians want government expenditure on health care, education, employment, and the environment, not on tax cuts, subsidies for corporations, nor paying down the debt.
Canada is a very rich country. The CD Howe Institute, the Canadian Council of Chief Executives, the Canadian Chamber of Commerce, and the Canadian Federation of Independent Business do not want citizens to know that because they want our money to be used for their interest only, not that of all the citizens. The mainstream media will not admit that because they are owned by members of these organizations, and exist to support those institutions, not the interest of all Canadians.
What is the proof that Canada has the money or the capacity to use our money for people programs?
The first proof comes from the governments own admission under pressure from the auditor general that it had been 'cooking the books' since confederation by failing to show many of our nations assets on their financial statements. In other words, the assets did not balance the liabilities, such that it appeared we were in far greater debt and less rich than was true.
Canada is richer than government pretends. The recent use of full accrual accounting in government financial statements proves this. Dishonest government accounting procedures in place until recently misled the public by greatly undervaluing our wealth, even to the point of pretending some of our assets did not exist. In 2002, the government ceased this practice and moved to full accrual accounting in the federal financial statements. (See annex 6 of the Budget Plan 2003 which details the implementation of full accrual accounting.) This came about as a result of pressure from Canadas auditor general, Denis Desautels, who refused to sign off on the books without the implementation of accrual accounting, that is all liabilities balanced against all assets
The most important benefit of accrual accounting is identified by the statement on page 279 of Budget Plan 2003 which reads:Full accrual is more comprehensive as additional liabilities are recognized and non financial assets and government buildings are now included.
By including in the ledger assets previously omitted, the value of the federal debt shows now as dramatically declined by $28.8 billion. (The estimated value of the federal debt (accumulated deficits) at March 31, 2002 declined from $536.5 billion to $507.7 billion. This was a $28.5 billion write down of our debt without spending one dollar of revenue. For years Canadians were paying interest on $28.8 billion because of faulty accounting.)
The Martin/ Layton amendments can be paid for in two ways primarily:(1) Greater use of our Bank of Canada, and (2) Reinstatement of Statutory Reserves.
1. Bank of Canada (BOC): Today the Bank of Canada provides the Receiver General of Canada annually close to $2 billion in profit from the BOC operations. The actual amount may be found in the annual report of the BOC. This amount could be greatly increased by the government borrowing more from the BOC, which it wholly owns, as it previously did, rather than borrowing from commercial banks and non residents.
$5 to $6 billion more could be generated for the Receiver General if the government refinanced 15%-20% of the debt with the BOC, just like corporations buy back their debt. The government of Canada has the authority under the BOC to direct the governor of the BOC to undertake this action now.
Madelaine Drohan, business columnist, wrote about the BOC in the Globe and Mail Sept 16, 2000: under the headline Canadians Reveal Shocking Ignorance of Central Bank. She wrote: Given the role all these institutions play in our daily lives, such low public awareness is unhealthy. And in a democracy where these institutions are supposed to be run for the interest of the people, it is unacceptable. How can we be sure they are working for us if we do not even know what they do?
When the Central bank holds federal debt, the interest paid on it finds its way substantially back as dividends to the government which since 1938 has been the sole shareholder of the Bank of Canada When the chartered banks hold the same debt, the interest on it stays with the chartered banks.
2. Statutory Reserves: In 1991 Canadas chartered banks suffered big losses due to their gambling. in gas and oil, international real estate, and much else incompatible with banking. They had lost much of their capital. They came crying to our government to bail them out. The Mulroney Conservatives did it by the elimination of statutory reserves, phasing them out over two years, 1991-1993. The purpose of the elimination of the statutory reserves was to bail out the banks and pay for their lost assets at the expense of the taxpayer.
What were statutory reserves? By law (statute) our chartered banks were required to deposit with our bank of Canada a modest part of the short term deposits they received from the public. This deposit was called a reserve.This reserve was the price that banks had to pay for the licence our government granted to them to be the ones to create most of our money supply, and to profit from that money creation by receipt of interest on the money they created.
Amendment S. 457 ss (4) Chapter 46 Statutes of Canada 1991 passed by the Mulroney Conservative government phased out the obligation of the chartered banks to redeposit with the Bank of Canada a portion of the deposits(usually 8%to 12%) the public had made into their chequing accounts.
The reserves that were deposited with our Bank of Canada earned the banks no interest. That is, our Bank of Canada paid no interest to the banks in return for the BOC holding and using those reserves. The banks did not like that. Those reserves put at the disposal of the Canadian government over $120 billion dollars of interest free money that would grow from year to year with the economy. (William Krehm, The Journal of the Committee on Monetary and Economic Reform, Volume 16, No.1, January 2004.) The quantum used to be even more when the amount of reserves, i.e., the percentage of deposits, was much higher.
To make matters worse, after phasing out the statutory reserves, our government turned around and borrowed from those same banks, either directly or indirectly, the money it needed to make up for the loss of the deposits, and now pay those same banks $5 to $8 billion interest per year on that money that previously had been interest free to our government and hence to us the citizens. (William Krehm). That means citizens are paying an unnecessary $5 to 8 billion interest per year to the banks, on an unnecessary debt. Most of the national debt about which Conservative and Liberals make such a fuss originated from the elimination of the statutory reserves and the transfer of debt from the BOC to the chartered banks. That has been a most carefully guarded secret.
The very least Layton should demand in return for NDP ongoing support following the passing of the budget is the reinstatement of statutory reserves. To do any less is to perpetuate one of the greatest abuses of taxpayers money exceeding the current sponsorship scandal. It is not social and environmental programs that caused the massive debt of Canada. It was the scandalous mismanagement of Canadas money permitting outrageous benefit to banks.
To quote William Krehm, editor of the Journal of the Committee on Monetary and Economic Reform,
COMER, It is time we all started beating the drums for a royal commission to find out the extent of the expoliation of the public treasury that makes the sponsorship scandal childs play.
Knowledge of public finance and its management is of vital importance to all our nations citizens. Because of the effect it has on our daily lives this subject should be incorporated in all K-12 provincial education programs.
Forum Junkie 
