CANADIAN ONTARIO GREENS SUPPORT LETS TIME-BASED CURRENCY
GREEN PARTY OF ONTARIO http://www.greenparty.on.ca
1999 Green Party of Ontario Policy Guide http://www.greenparty.on.ca/policy/guide.htm
ECONOMICS [Amended 1998-06-06-013]
The economy of Ontario is burdened by high levels of unemployment, a large deficit, a large public debt, reliance on technologies that are not sustainable due to high levels of resource consumption, and reliance on technologies that are harmful to both human and non-human residents of Ontario. Its relative success is not judged by the happiness or health of the population but rather on its ability to perpetuate a cancerous growth rate and an unsustainable rate of resource consumption.
Establishment Of Provincial L.E.T.S
Economics serves the political objectives of elite establishments. Resource depletion and long term sustainability in general, are ignored as external costs. A healthy sustainable local economy is best achieved by a local currency. To this end the Green Party advocates the creation of provincially licensed, locally controlled Local Employment Trading Systems or L.E.T.S.
A L.E.T. system is a non-profit, interest free, bartering system. Individuals can buy services and pay taxes with the system. Service exchanges such as the L.E.T.S. are really an interest and tax free money system. (JCT: Not tax-free)
Creating a Steady State Economy
Introduction The economy grows in physical scale but the ecosystem does not. Our growing economy is a threat to the health and well being of our society and our long term survival.
Money Aristotle first noted the dangers involved when an economy shifts its focus from use value of money to exchange value of money. In a sustainable economy, money is a tool to facilitate exchange. Modern economies have perverted this to make money into a commodity that generates production with the purpose of generating more money. Abstract exchange values accumulate by themselves due to interest. This is an absurd human convention that pits itself against the basic laws of nature, the law of entropy. An economy is not sustainable if the use value of money is bypassed by exchange values of money.
A Steady State Banking System The Federal Government, through its agency the central bank, must be the sole authority for manufacture and redemption of all forms of money. It is vital that the central bank's activities be controlled non-politically. The controlling body for the central bank would be an elected commission whose mandate was to provide enough currency for the economy without creating inflation.
All banks will be required to hold 100% reserves of central bank notes or currency against their depositors' balances. Banks will then make loans only from their holdings or central bank money. The key effect of this will be to enable the central bank to control money supply and thus control recessions and inflation directly. This will be done by varying the supply of money rather than through the manipulation of interest rates.
The national debt would be refinanced at the central bank at no interest. Interest rates will be restored to their legitimate function of compensating a lender for depriving himself or herself of the use of the money while it is lent to a borrower. Interest rates will return to levels that existed before the current high interest rate dogma became fashionable with the financial establishment. All public capital projects would be funded by central bank credits provided interest free. The principle of these loans will be repaid over the useful lifetime of the project. The central bank will allocate funds at a rate that will be guided by its money supply management policy of inflation/recession control.
Background Too much money in circulation results in inflation; too little causes recession. A proper balance ensures stability. Yet we suffer from both in the present system. The reason for this phenomenon is that the Bank of Canada issues and redeems only about five percent of Canadian money. The other 95 percent is issued and redeemed by chartered banks under the fractional reserve banking system in which they are required to hold, in cash or central bank credits, a reserve of only five percent against their deposit liabilities.
Chartered banks do not lend their depositor's money. When a loan is taken at a chartered bank new money is created. As a result of this system 95 percent of the money in circulation in Canada has been issued and remains in circulation only as long as someone has taken out a loan at a bank. The quantity of money in circulation is equal to the total loans outstanding. This has little to do with the correct amount of money in circulation that would provide reasonable stability for economic activity without excessive inflation or recession.
The Bank of Canada attempts to influence the quantity of money in circulation by influencing the quantity of loans by manipulating interest rates. Higher rates discourage borrowing, while lower rates encourage it.
This is an undesirable method because: Chartered banks are able to circumvent Bank of Canada measures when it is in their interest to do so. The range of interest rates is restricted by the perceived need to "protect the dollar". A "flight of capital" is considered a disastrous scenario and the results are a high value Canadian dollar, high interest rates, and a severe recession.
Canada does not need foreign capital or speculative investments that are attracted by interest rates. We advocate that the Bank of Canada provide the money the economy needs. Our money is just as valid as those currently provided by foreign banks to foreign investors or speculators. Canada possesses abundant resources and a well educated work force capable of producing almost all of our needs for a high standard of living using sustainable economic principles.
The provincial and national debt.
The chronic inability of governments in Canada to avoid deficits and higher taxes, may be traced to the existence of the fractional reserve banking system. The Bank of Canada currently provides five percent of government loan requirements interest free. This is restricted to five percent of government loan requirements because the Bank of Canada credit forms the reserves of chartered banks. If it were to expand so would the reserves of the Banks. This would greatly expand the money supply and cause inflation. The solution is to raise chartered bank reserves to 100% of loans. This would limit the threat of inflation.
The result of the current system is that one-third of all of your tax dollars go to pay interest to privately owned banks who have been granted the ability to issue money to the Federal reserve and charge you interest for the service. Government overspending will not be reduced by restructuring transfer payments or cutting spending on Social services but rather by raising chartered bank reserves to 100% of loans and financing governments monetary requirements at no interest.
This presupposes that the government will run a balanced budget but that would be possible because the largest expenditure of the Federal government, interest at 35% of total expenses has been reduced to zero. Inflation would be avoided because the government is not "Printing money" nor is it allowing the banks to print money.
All yearly federal government loan requirements could be financed at no interest at the Bank of Canada, all of the provincial and nation debt would be refinanced there too. Under the current system the debt- interest dilemma remains totally unsolvable. The current social system must collapse and the current recession must continue and the debt load will continue to grow or inflation must be allowed to devalue the debt.
JCT: John The Banking Systems Engineer grades their pass an A minus.
Send a comment to John Turmel