I haven’t heard any politicians talk about my number 1 election issue. The issue is how our personal and national debt relates to the way money is created in Canada.
We should all be outraged that ever-increasing debt continues to be necessary for our stable economy because of our federal government’s inability to change our money creation policy.
When I grew up in the 1950s and ’60s, only one spouse needed employment, yet the debt-per-household was very low compared with today. Canadians reportedly now owe $1.78 for every dollar of their disposable income.
I used to think that when you went to the bank for a mortgage, you were borrowing from other depositors’ savings in exchange for the next 25 years of your physical toil.
But that’s not how borrowing really works. Now you are trading your 25 years of labour for the time it takes the bank to review your mortgage application and create a one-minute bank ledger entry. An equal trade? No.
Among many other sources, a Library of Parliament research publication explains that most of the new money in Canada is created by banks when they make loans. So the main way to get extra money into the economy is to borrow it from banks, leaving many people trapped under a mountain of personal debt.
As the debt goes up, so does the amount of money in circulation. But just as banks create money when they make new loans, they effectively destroy money when we repay loans.
It’s almost impossible to reduce our debts without causing a recession. And what does government do to recover from a recession? It entices more debt by lowering the bank rate. If financial crisis is caused by people having too much debt, how can more debt be the solution?
Steve Chapman, Surrey