Indebted We Fall

When the Bank of Canada has currency printed, the money should remain as national credit and
should never be converted into national debt to private financial institutions, as is presently the case.
In other words, the government should never be borrowing its own money at interest from financial
institutions which are privately owned in whole or in part.

Money from the Bank of Canada should be spent interest-free when paying for social programs. This
is precisely how we funded health care in the first two decades following its introduction. Whenever
money is loaned at interest to other institutions, the interest earned on the initial loan should be owed
to the Bank of Canada. With no national debt, taxes could be lowered without jeopardizing social
programs.

The current practice of converting our currency into debts to private institutions, which in turn re-
loan the money at compound interest many times over to other parties, establishes a network of
international financial institutions of vast wealth competing against, and ultimately exerting control
over, the very governments which generated the wealth in the first instance. To state the matter
clearly, democracy is challenged and subverted by private financial interests.

The resources of a nation, especially the productivity of its citizens, is the only sound and legitimate
basis for legal tender. Debt can never be a legitimate basis for legal tender because compound
interest results in greater debt than there is currency in the system to pay on debt. As Ellen Hodgson
Brown (2008, pg. 100) states: “A dollar borrowed at 6 percent interest, compounded annually, grows
in 100 years to be a debt of $339.” It is impossible to repay $339 for each and every dollar printed.
This leads to the inflation of prices and the devaluation of currency. For example, a 1950 U.S. dollar
has declined by 88% in purchasing power to a value of 11.5¢ in 2008 (Brown, 2008, pg. 101). Is it
any wonder that workers perpetually seek greater wages and benefits?

Inevitable crashes in the economy result where creditors increase their concentrations of wealth
through bankruptcies and the speculative manipulation of stock markets which, due to such
techniques as short selling, are ultimately nothing more than pyramid schemes. After all, the value
of a stock is the mere perception of its value in the short term. In plainer words, the current economic
system is predatory and requires the exploitation of vast numbers of people. It is no accident that
economic wealth is backed by military force, and neither of these is adequately restrained by
democracy, human rights or ethics. Corruption is systemic.

The only solution is to bring economics under the control of democracy and a rule of law which
respects human rights, builds consensus and shares wealth. None of this will happen without
rejecting national debt and replacing it with national credit. Indebtedness is not the foundation upon
which to build democracy, liberty or prosperity. Our creative and productive power as citizens,
expressed as national credit, is the only means to genuine, sustainable progress. The New Democratic
Party should return to the inspiration of its predecessor, the Co-Operative Commonwealth Federation
Party, making national credit the foundation of its policies.

– Thomas La Porte