----- Original Message ----- From: John Hermann <[EMAIL PROTECTED]> To: John Hermann <[EMAIL PROTECTED]> Sent: Monday, 25 October 1999 7:34 AM Subject: Tax Troubles & Money Creation Economic Reform Australia ERA EMAIL NETWORK Date: Sat, 23 Oct 1999 From: Herb Wiseman <[EMAIL PROTECTED]> Subject: Tax Troubles & Money Creation Please ask your local paper to run this article. Share the information with your friends. TAX TROUBLES TIED TO WAY CASH IS CREATED by Kathleen O'Hara (Peterborough Examiner, Ontario, October 14, 1999) TORONTO - They billed it as a forum on "The Great Canadian Tax Revolt," but no one came. Or almost no one. About 65 souls. Some revolt. CBC Radio's "This Morning" sponsored the event with host Michael Enright, microphone in hand, ably playing referee as the tension between the tax defenders and the tax cutters rose steadily. But there was something fundamentally wrong with the discussion. It wasn't so much what was said by the six panelists - although some of the comments were nasty and bitter - but what wasn't said. They didn't get to the crux of the matter. It seems to me that you can't talk about how much money we all pay in taxes without looking at how that money gets into the economic system in the first place. That wasn t addressed by the panelists - although some members of the audience tried to broach the subject without much success. Let me explain what I mean by first pointing out that I disagree with both the tax defenders and the tax cutters. The former insist that taxes aren't too high because they are desperately trying to protect whatever government-funded social programs we have left. The latter want to cut taxes because taxes are, in fact, too high - and because they resent having to support social programs. Contrary to both, I believe we can and should have both lower taxes and social programs. Sound impossible? Not at all. My position is based on an analysis of our monetary system and how money is created. Indeed, the origin of our money is key because that determines how much it costs to produce that money (interest rates) and how and where it will be spent. Right now, private banks are creating almost 100 per cent of Canada's cash. They do this by lending money that doesn't actually exist (cybercash). That means that almost all the money created in this country is "debt money" with a high-interest rate attached. This is a very negative beginning for our dollars - although it is highly lucrative for the banks, as we all know. (Also, since the reserve requirement which forced banks to hold a certain percentage of the money they created in reserve was removed by the Mulroney government, the banks are now free to leverage their funds by more than two-hundred times. In other words, they are lending out - or creating - a lot of money with nothing to back it up. Obviously, this system is becoming dangerously out-of-control.) In years gone by, much of the money created in this country was channeled into various productive areas of the "real economy" - industry, decent public-service jobs, maintaining infrastructure. Now, more and more new money is going into financial speculation which is rarely productive and dangerously inflating the stock market. This has resulted in fewer jobs being created - and fewer taxpayers. At the same time, much of the money is leaving the country. Such a harmful scenario is not based on any natural order of things and it could certainly be replaced. Between 1939 (as a reaction to a similar situation that led to the crisis of the Great Depression) and 1974, the federal government's own Bank of Canada produced a healthy portion of Canada's money at nominal interest rates - meaning less debt to the private banks. During this period, we successfully waged an expensive war, rebuilt the country's infrastructure and established national social programs. That system worked well for the country and its citizens for several prosperous decades. So, why have we replaced it with the present dysfunctional one? To sum up - since this is a complicated and little-discussed topic - the connection between taxation and money-creation is, at the very least, two-fold: � If money is created by private banks costing the government billions in payments when it borrows at high-compound-interest rates, then taxes will surely go up. � If the government has no control over whether the money created will be invested in job-creating and tax-generating ventures, chances are taxes will rise. At the same time, and this, at least, was noted during the forum, corporate taxes have, over the years, been shifted to the individual taxpayer through higher personal income taxes and the GST. More burden. Is it any wonder we have, if not a full-fledged tax revolt, at least a lot of disgruntled citizens who are receiving less and less for their costly donations to society while, at the same time, paying user fees every time they turn around? I consider the issues of monetary reform and taxation basic to any understanding of the country's economic problems, and to their solutions. Too bad none of the panelists at the forum and few otber pundits (to say nothing of our politicians) agree with me. Kathleen O'Hara is an editor with the Issues Network. -- ---------------------------------------------------------------- This is the Neither public email list, open for the public and general discussion. To unsubscribe click here Mailto:[EMAIL PROTECTED]?Subject=unsubscribe To subscribe click here Mailto:[EMAIL PROTECTED]?Subject=subscribe For information on [EMAIL PROTECTED] http://www.neither.org/lists/public-list.htm For archives http://www.mail-archive.com/[email protected]
