THE CLAIRE FOSS JOURNAL
FUNDING THE FUTURE - PAYING FOR THE PAST
COMER Conference: Funding the Future - Paying for the Past
Date: May 29, 2004
Committee On Monetary and Economic Reform (COMER)
The COMER conference that will be held on May 29th, 9 am. to 6 pm., at the Steelworkers Union hall at 25 Cecil St., Toronto has been planned around the central issue of our times. It will seek an answer to a question that is being used to block almost everything everything essential to society’s survival - “Where is the money to come from? “ The answer in fact is another question rarely asked: “Where has the money gone?”
To the conference will be invited representatives of all organisations not only to deal with their central concerns, but to explain how they propose having them funded.
That great unanswered question was formulated by the late John Hotson, one of COMER’s founders: “Can it be that society cannot afford its survival?”
Both major parties in the coming US elections are each in their particular way taking balanced budgets as a given - at a time when unemployment is growing.
The deregulation and globalization of our banking system has led to money creation being taken out of the hands of our central bank, and entrusted to the commercial banks. In the mid 1970s more than 22% of the budget of the the Canadian government was covered by government debt held by the Bank of Canada. Because the federal government is the sole shareholder of the BoC, the interest the government paid on the debt it held being returned to it substantially as dividends. That percentage is now about 5%, and the federal government finances all but that through the commercial banks and the market. That has enabled the banks to more than quadruple the federal debt it holds without putting up any significant money of its own. That amounts to a an effective gift to the banks of some $5 to 8 billion each year, depending on how high the BoC sets the benchmark interest rate. And interest rates are about to begin climbing once more, and consumer debt is at record heights across the nation.
To pay this annual subsidy to our banks, the federal government has cut its grants to the provinces, and the provinces have down-loaded social programs to the municipalities without the funds to pay for them.
Their plight will receive special attention at the conference. That and the weird non-accountancy of our government still treats government in vestment in physical capital - buildings bridges, highways as a current expense. It is written off in the year in which it is made, and carried on its books at a token dollar opens the doors for selling off government assets at a fraction of their cost, and booking the proceeds “to reduce the deficit.”. Paying off the government debt is endorsed by all the major parties, when it is not clear with what - since gold and silver are no longer legal tender. Only government debt is.
By an inverted metric, the more important such problems have become, the more they are suppressed in our public life. During the Great Depression of the Thirties, there was at least a freedom of discussion of such burning issues. That made possible the policies to combat the Depression, finance the Second World War and successfully manage the reconstruction. Today that freedom no longer exists.
This enforced amnesia that has wiped what was learned by economists and statesman in the 1930s has created an urgent need for proportional representation to underpin our threatened democracy. That will be a feature in the agenda of our conference.
We can assure you that it will never have attended a more timely conference. Parking is free and admission is $10 PWYC.
For further information phone Darrel Dular 416-340-1865