Monetary & Taxation Reform

[NewGlobalOrder]

- I purpose to eliminate all federal taxation, and allow provincial governments to tax up to 90% of the old federal taxation rate, so Canadians would get at a 10% tax cut; no longer having to deal with Revenue Canada, and the elimination of the GST/PST


- The removal of all federal personal and corporate taxation will be replaced with a population-based funding system (government issued money)


- Canada has an estimated population of 34 million, and I believe the federal operating budget for 2011 is $280.5 billion. Now lets say all personal and corporation made up exactly $100 billion of the federal budget. Under a population based-budget of $3,000 per person, that would equal $102 billion


- Because your looking at the creation of $102 billion into the economy, all of the increased provincial taxation will have to be extinguished. The only other way to do it, is to lower the % created by the government, so the provinces could keep more of that taxation revenue (oh though it would be less bureaucratic to also remove all provincial and municipal taxation, to be funded through a population based-budget, leaving just a single level of taxation to extinguish money issued by government)


- But for the first year of this new monetary system, provincial taxation rates will stay the same, so there can be a personal and corporate tax holiday


- As this will cause inflation, the fractional-reserve system will be reinstated to be governed by the BoC, and the reserve ratio to be set at the % needed to be taken of the banking system, therefore currency levels stay the same


I would say 99% of Canadians have no clue how our monetary system works. Which means if you are reading this, you are probably one of them, and therefore have no clue what I just said.


The $20 in your wallet is created by the government, (fiat money or bank notes) which makes up about 5%, give or take, of the money supply. Which means 95% of the money supply is created by the banking system through personal debt. (bank credit)


When a bank issues a loan of $250,000, that bank credit increases the money supply, but once that loan is paid back to the bank, that principal is extinguished, and can only be replaced by someone else taking out a $250,000 loan from a bank. Hence, if there is no debt, there is no money.


Which means we have a debt-based monetary system. And because there is interest on that debt, there is more debt in the world than there is money. So even if it was possible to payoff all the debt in the world, because debt creates money, there would be no money, if there was no debt.


This is how we have recessions, because if people lose confidence in the economy, people stop spending and borrowing, and if there is no debt, there is no money.


- All levels of government will be banned from borrowing. Only the federal government can order the BoC to issue more money, in a time of a natural disaster, etc


- Eliminate the penny, nickel, dime, quarter, and half-dollar, leaving just the loonie and toonie in circulation


- Canada’s total debt stands at $572 billion, and I believe debt-servicing charges from all levels of government in 2010 was $63 billion. I will seek an international agreement on debt forgiveness between governments; at the very least, drop all future interest payments between governments, and start paying off the debt


Now just encase it crosses your mind, yes, the government could take out $100 billion per year from the banking system, therefore paying off Canada’s debt in 6 years, without causing inflation, but that $100 billion would be at the cost of the Canadian economy, because that money is not being used in the economy.


- If a bank falls under their reserve ratio because of higher cash withdrawals, and other banks feel it is too risky to give loans to that bank, and that bank doesn’t want to call in any of its loans, then the bank will now be able to borrow from the Bank of Canada interest free


- Look into the idea of ending perpetual debt, and instead have a one time fee of the total sum of the loan
When the banking system and other financial institutions crash the system, they then go to government to bail them out, and as the government has to borrow its own money, there is interest on it, therefore putting the debt on the back of the public, and then countries like Greece has to sell their public assets to those who crashed the system.


So now the question to all of you is, what type of monetary system do you want? You can choose to continue with the money as debt system, where government spending is funded through taxation and borrowing.


Or you can choose to have the federal government create its own money to fund services, while having lower taxes because all levels of government will no longer be allowed to borrow money, which means future governments will be debt free.


The only reason why the banking system shouldn’t be nationalized, is because if it was run by the government, you’d have bureaucrats and politicians controlling the system, therefore the politicization of the banking system. That is why the banking system needs to be run by a third party, which is the private sector. Therefore, banks need to make a profit to pay their employees, interest on deposits, and to pay themselves, plus with commercial banks and credit unions competing against each other, it is probably the better system at the end of the day.

 

[NewGlobalOrder]

I've cleaned up what I said. Never mind about the tax free holiday.



The $20 in your wallet is created by the government, (fiat money or bank notes) which makes up about 5%, give or take, of the money supply. Which means 95% of the money supply is created by the banking system through personal debt. (bank credit)


When a bank issues a loan of $250,000, that bank credit increases the money supply, but once that loan is paid back to the bank, that principal is extinguished, and can only be replaced by someone else taking out a $250,000 loan from a bank. Hence, if there is no debt, there is no money.


Which means we have a debt-based monetary system. And because there is interest on that debt, there is more debt in the world than there is money. So even if it was possible to payoff all the debt in the world, because debt creates money, there would be no money, if there was no debt.


This is how we have recessions, because if people lose confidence in the economy, people stop spending and borrowing, and if there is no debt, there is no money.


- I am purposing, government issue and extinguish its own money supply, no different than what the banking system is already doing


- So the federal, provincial and municipal governments would no longer collect taxation to pay for government services. Instead, there will be a single taxation rate, to extinguish money


- A population-based funding system will be used to decide how much the federal, provincial and municipal governments would get for their operating budget


- Canada has an estimated population of 34 million, and I believe the federal operating budget for 2011 is $280.5 billion. Now lets say all personal and corporation made up exactly $100 billion of the federal budget. Under a population based-budget of $3,000 per person, that would equal $102 billion


- As this will cause inflation, the fractional-reserve system will be reinstated to be governed by the BoC, and the reserve ratio to be set at the % needed to be taken of the banking system, therefore currency levels stay the same


- As there would be no more GST/PST, eliminate the penny, nickel, dime, quarter, and half-dollar, leaving just the loonie and toonie in circulation


- All levels of government will be banned from borrowing. Only the federal government can order the BoC to issue more money, in a time of a natural disaster, etc


- Canada’s total debt stands at $572 billion, and I believe debt-servicing charges from all levels of government in 2010 was $63 billion. I will seek an international agreement on debt forgiveness between governments; at the very least, drop all future interest payments between governments, and start paying off the debt


Now just encase it crosses your mind, yes, the government could take out $100 billion per year from the banking system, therefore paying off Canada’s debt in 6 years, without causing inflation, but that $100 billion would be at the cost of the Canadian economy, because that money is not being used in the economy.


- If a bank falls under their reserve ratio because of higher cash withdrawals, and other banks feel it is too risky to give loans to that bank, and that bank doesn’t want to call in any of its loans, then the bank will now be able to borrow from the Bank of Canada interest free


- Look into the idea of ending perpetual debt, and instead have a one time fee of the total sum of the loan


When the banking system and other financial institutions crash the system, they then go to government to bail them out, and as the government has to borrow its own money, there is interest on it, therefore putting the debt on the back of the public, and then countries like Greece has to sell their public assets to those who crashed the system.


So now the question to all of you is, what type of monetary system do you want? You can choose to continue with the money as debt system, where government spending is funded through taxation and borrowing.


Or you can choose to have the federal government create its own money to fund services, while having lower taxes because all levels of government will no longer be allowed to borrow money, which means future governments will be debt free.


The only reason why the banking system shouldn’t be nationalized, is because if it was run by the government, you’d have bureaucrats and politicians controlling the system, therefore the politicization of the banking system. That is why the banking system needs to be run by a third party, which is the private sector. Therefore, banks need to make a profit to pay their employees, interest on deposits, and to pay themselves, plus with commercial banks and credit unions competing against each other, it is probably the better system at the end of the day.

 

[darkbeaver]

Private banking is the source of all the problems you want to address with private banking. There are only four remaining nations who have escaped the private banking cartel, Lybia used to be one untill just recently, Iran still is.

 

[Spade]

Wait, I have to consult C. H. Douglas. I'll get back to you.

 

[Ron in Regina]

NewGlobalOrder , I'm not going to quote your above posts due to their
length, but out'a curiosity, where would Canadian military funding fit into
your concept of revamping the tax system?

Also, regarding funding based on population, how do the northern
communities (low populations spread out with lots of distance between
pockets of people) fit into this (ice roads, or just long distances, or only
fly in)???

That might fly in the GTA, but got north of that 300 miles...and I can
forsee some issues.

 

[Spade]

This is old-time Social-Credit monetary theory.

 

[SLM]

NewGlobalOrder , I'm not going to quote your above posts due to their
length,

For someone who doesn't like to read he sure does write a lot!

but out'a curiosity, where would Canadian military funding fit into
your concept of revamping the tax system?

Also, regarding funding based on population, how do the northern
communities (low populations spread out with lots of distance between
pockets of people) fit into this (ice roads, or just long distances, or only
fly in)???

That might fly in the GTA, but got north of that 300 miles...and I can
forsee some issues.

Lol. I have two words for ya: also ran.

 

[Dexter Sinister]

This is old-time Social-Credit monetary theory.

Yeah, that's what it looked like to me too, and last time I looked at that in any detail it seemed pretty clear that it got its sums wrong by double counting things.

Guess we're showing our age, eh?

 

[NewGlobalOrder]

NewGlobalOrder , I'm not going to quote your above posts due to their
length, but out'a curiosity, where would Canadian military funding fit into
your concept of revamping the tax system?

Lets say we have a $100 economy. And lets say all personal & corporate taxation collected was $50. Having the government issue that $50 into the economy will not only create a $150 dollar economy, but if that $50 is not extinguished, the next year when government issues another $50, we will then have a $200 economy, and inflation will only get worse.


That is why taxation is still needed, to extinguish government issued money, and the fractional-reserve system to be reinstated, so $50 of a $100 economy, is now created by the government.


Also, regarding funding based on population, how do the northern communities (low populations spread out with lots of distance between pockets of people) fit into this (ice roads, or just long distances, or only
fly in)???

That is really no different than the current situation. Where prov/fed gov't has to help out.

 

[damngrumpy]

The only thing worse the a Federal Government out of control is having ten or more
Provincial and Territorial Governments out of control.

 

[JLM]

- I purpose to eliminate all federal taxation, and allow provincial governments to tax up to 90% of the old federal taxation rate, so Canadians would get at a 10% tax cut; no longer having to deal with Revenue Canada, and the elimination of the GST/PST


- The removal of all federal personal and corporate taxation will be replaced with a population-based funding system (government issued money)


.

It sounds like a very good plan, but before you try it on a country of 34 million, you might want to try it out on a smaller jurisdiction first, like maybe the north half of Ellesmere Island just to make sure it works. Good luck! :smile:

 

[NewGlobalOrder]

The only thing worse the a Federal Government out of control is having ten or more
Provincial and Territorial Governments out of control.

They won't be. OK... say the Ontario government collected in personal and corporate taxation $50 billion annually. Now say there are 13 million people living in Ontario. Divide $50 billion by 13 million, and you have $3,846.15 per person. So by having a population based system, when a province population increases or decreases, so does their budget.

And the fact that borrowing will not be allowed, governments can no longer go into debt. Look at it like having a balanced budget, passed by law.

It sounds like a very good plan, but before you try it on a country of 34 million, you might want to try it out on a smaller jurisdiction first, like maybe the north half of Ellesmere Island just to make sure it works. Good luck! :smile:

It's no different than what the banking system does. The banks issue and delete money all the time. So why can't the government? It won't cause inflation, because the money issued by the government, would be taxed out of the system. No different than when the bank issues bank credit, then deletes it, once paid back to the bank.

 

[bobnoorduyn]

I suggest that before you “purpose” something, you should consult a good old fashioned dictionary rather than rely on spell check. We all make typos which spell check may correct, it will make a correction “encase” you have an incorrect word spelled incorrectly, but will not replace it with the correct word.

Sloppy use of the mother tongue of the audience in the body of the text leaves the figures and theory proposed suspect.

You claim that we have a debt based monetary system because every government is in debt. It is societal demands of the state that cause governments to spend, and as society drifts leftward spending will only increase and governments will borrow.

What you don’t explain is who is owed this debt and whether they are willing to forgive it. Much of our country’s debt is owed to its own citizens in the form of bonds or other monetary investments. Are we willing to forgive the government debt and eat the loss personally?

You also claim that without debt there is no money. You work, you earn money, you use money to trade for stuff someone else worked for and is selling. There is no debt involved. Money is used for trade because it is more portable than sacks of flour or potatoes.

Banks cannot go into debt to loan money, nor does that loan increase money supply. The bank loans money based on its assets and your collateral, and do it for profit. Banks don’t “issue and delete money all the time”, nor do they do it any time. They transfer it, but money is neither created nor destroyed by banks, (old bank notes being burned doesn’t count). Money only represents either an asset or debt depending on which side of the balance sheet it sits. Banks taking a loss on investments doesn’t represent money being deleted because someone ultimately enjoyed a gain at their expense.

What we actually have is an asset based monetary system. Without assets there would be no debt because no one will lend to anyone without the ability to re-pay. The NINJA, (No Income No Job or Assets) mortgage experiment only reaffirmed that a debt based system won’t work. It’s true that governments have no money of their own that they don’t first take from their citizens, but don’t kid yourself, the governments have the assets to pay their debts; they ultimately own the land you sit on and everything under it.

Your proposal is a misplaced solution to an unidentified problem. Even if you could eliminate government debt, what would that accomplish? Who can you expect to bear the pain of the loss? But you have neither identified the problem nor a solution to it. The situation we face is only part of the result of the underlying illness. That would be the demands by society at large for a bigger and seemingly more benevolent government that is everything to everyone, with all the associated costs. The crash of the banking system and economy was just the pneumonia contracted by an already sick system of governance.

Governments go into debt for the same reason individuals do, that is to pay tomorrow for what we enjoyed yesterday.

 

[JLM]

I suggest that before you “purpose” something, you should consult a good old fashioned dictionary rather than rely on spell check. We all make typos which spell check may correct, it will make a correction “encase” you have an incorrect word spelled incorrectly, but will not replace it with the correct word.

Sloppy use of the mother tongue of the audience in the body of the text leaves the figures and theory proposed suspect.

Right on Bob, nothing detracts from credibility like repeated poor spelling (we all make the odd mistake when we are not paying attention.) Spelling was something most of us pretty well had down pat by grade 4, so if one hasn't more or less mastered that, you wonder what they mastered after that. :smile:

 

[NewGlobalOrder]

You claim that we have a debt based monetary system because every government is in debt. It is societal demands of the state that cause governments to spend, and as society drifts leftward spending will only increase and governments will borrow.

As banks produce 95% of our money supply, give or take, yes we do. How do banks create bank credit? By people taking out a loan. What is a loan? Personal debt to the bank.

And yes, societal demands can make government go into debt, and yes, government waste does need to be cut, government should not have to borrow money, as it is the government.


What you don’t explain is who is owed this debt and whether they are willing to forgive it. Much of our country’s debt is owed to its own citizens in the form of bonds or other monetary investments. Are we willing to forgive the government debt and eat the loss personally?

I said how I wanted foreign debt owed to another government, either forgiven, or at least end the interest being added onto it. I will not ask people who happen to own a government bond, to eat it.


You also claim that without debt there is no money. You work, you earn money, you use money to trade for stuff someone else worked for and is selling. There is no debt involved. Money is used for trade because it is more portable than sacks of flour or potatoes.

Yes, money is a medium of exchange. Say in the year 2012 there are 100 cars in Canada, and there was only $100 in currency. Then in the year 2013, we still have 100 cars, but now $200 in currency. This will cause inflation, because we have more money then what we need.

Money needs to match productivity. But banks issue 95% of our money from debt. If all banks stopped loaning out money, and called in all of its loans, we would have a recession, because there wouldn't be enough money for everybody.


Banks cannot go into debt to loan money, nor does that loan increase money supply. The bank loans money based on its assets and your collateral, and do it for profit. Banks don’t “issue and delete money all the time”, nor do they do it any time. They transfer it, but money is neither created nor destroyed by banks, (old bank notes being burned doesn’t count). Money only represents either an asset or debt depending on which side of the balance sheet it sits. Banks taking a loss on investments doesn’t represent money being deleted because someone ultimately enjoyed a gain at their expense.

I never said banks go into debt. The person taking out the loan does. And once the loan is repaid, it is extinguished.


Your proposal is a misplaced solution to an unidentified problem. Even if you could eliminate government debt, what would that accomplish? Who can you expect to bear the pain of the loss? But you have neither identified the problem nor a solution to it. The situation we face is only part of the result of the underlying illness. That would be the demands by society at large for a bigger and seemingly more benevolent government that is everything to everyone, with all the associated costs. The crash of the banking system and economy was just the pneumonia contracted by an already sick system of governance.

Nobody is expected to bear the pain of the loss. Government debt has to be paid to individual bond holders, etc. I am speaking of government to government debt, or at least stop adding interest on it.

So smart guy, how would you solve the problem then?

 

[bobnoorduyn]

As banks produce 95% of our money supply, give or take, yes we do. How do banks create bank credit? By people taking out a loan. What is a loan? Personal debt to the bank.

And yes, societal demands can make government go into debt, and yes, government waste does need to be cut, government should not have to borrow money, as it is the government.

I don't know where you get the idea that banks produce our money supply. Banks may be a repository for monetary instruments, but they don't produce the stuff. Nor do banks produce credit, they may extend it, but credit is ulimately the responsibility of the borrower. As well, many of us own investment instruments that in fact extend credit to banks and other institutions which means the bank owes us. This is money the banks loan out to others from which we receive dividends.

Governments shouldn't have to borrow money but they did so to pay for wars at first, then to get themselves re-elected. I can't speak to other countries, but our debt was quite small before Trudeau decided to expand government. The debt has been added to ever since as the people's demands got more expensive

I said how I wanted foreign debt owed to another government, either forgiven, or at least end the interest being added onto it. I will not ask people who happen to own a government bond, to eat it.

We can't operate in a vacuum. If we expect other governments to forgive ours either the entire debt or the interest thereof, in reciprocity they will expect no less from us. Someone will eat the loss, and it will not only be the people with the investments; it will be like defaulting and the purchasing power of our, or their currency will fall.

Yes, money is a medium of exchange. Say in the year 2012 there are 100 cars in

Canada, and there was only $100 in currency. Then in the year 2013, we still have 100 cars, but now $200 in currency. This will cause inflation, because we have more money then what we need.

Money needs to match productivity. But banks issue 95% of our money from debt. If all banks stopped loaning out money, and called in all of its loans, we would have a recession, because there wouldn't be enough money for everybody.

You seem to be stuck in a zero sum fixed pie universe. You are using simple math to describe quantum physics. I can only guess by your example what you're trying to say is that if we artificially limit supply and wages, we can control inflation. Either you were sleeping or weren't around in the late 70's early 80's to experience this nonsense first hand, a period of "stagflation". Prices still went up but wages stayed stagnant or went down. Controlling the flow of currency and artificially manipulating supply and demand didn't work so well for the Soviets, no reason we should do any better at it.

I never said banks go into debt. The person taking out the loan does. And once the loan is repaid, it is extinguished.

Banks do go into debt; every cent you have in the bank is a debt they owe to you. Every share or investment vehicle you own with the bank's name on it is a debt that bank owes you. The banks use our money to loan to others, and for that they pay us a dividend or interest.

Nobody is expected to bear the pain of the loss. Government debt has to be paid to individual bond holders, etc. I am speaking of government to government debt, or at least stop adding interest on it.

So smart guy, how would you solve the problem then?

Canada has already forgiven debts to foreign countries, countries we had no hope of collecting from. But you are asking governments our country owes money to, to take a bath on their investment. That is a good way to de-value our currency and foment a little ill will at the same time. I ask you to try that with your lending institution first and tell me how that works for you.

What you see as a problem is what I see as the effect, not the cause, of a much larger problem. More problems have been created by trying to fix a perceived problem than the problem itself. What is needed is more regulatory oversight with a huge dose of accountability, personal and corporate, to avoid getting into this mess again. If left alone the problem will fix itself, no ammount of meddling will help, in case you forgot the old phrase, "I'm from the government, I'm here to help you".

What I do see as a problem is the constant attempts at social and economic engineering, and the cheerleaders of those attempting to do so. Neither society nor the economy are mechanical; they cannot be any more successfully engineered than a living creature. Your proposal is just like any other engineering project that attempts to correct the wrongs that other failed engineering projects caused in the first place.

 

[NewGlobalOrder]

I don't know where you get the idea that banks produce our money supply. Banks may be a repository for monetary instruments, but they don't produce the stuff. Nor do banks produce credit, they may extend it, but credit is ulimately the responsibility of the borrower. As well, many of us own investment instruments that in fact extend credit to banks and other institutions which means the bank owes us. This is money the banks loan out to others from which we receive dividends.

Governments shouldn't have to borrow money but they did so to pay for wars at first, then to get themselves re-elected. I can't speak to other countries, but our debt was quite small before Trudeau decided to expand government. The debt has been added to ever since as the people's demands got more expensive




We can't operate in a vacuum. If we expect other governments to forgive ours either the entire debt or the interest thereof, in reciprocity they will expect no less from us. Someone will eat the loss, and it will not only be the people with the investments; it will be like defaulting and the purchasing power of our, or their currency will fall.



You seem to be stuck in a zero sum fixed pie universe. You are using simple math to describe quantum physics. I can only guess by your example what you're trying to say is that if we artificially limit supply and wages, we can control inflation. Either you were sleeping or weren't around in the late 70's early 80's to experience this nonsense first hand, a period of "stagflation". Prices still went up but wages stayed stagnant or went down. Controlling the flow of currency and artificially manipulating supply and demand didn't work so well for the Soviets, no reason we should do any better at it.




Banks do go into debt; every cent you have in the bank is a debt they owe to you. Every share or investment vehicle you own with the bank's name on it is a debt that bank owes you. The banks use our money to loan to others, and for that they pay us a dividend or interest.



Canada has already forgiven debts to foreign countries, countries we had no hope of collecting from. But you are asking governments our country owes money to, to take a bath on their investment. That is a good way to de-value our currency and foment a little ill will at the same time. I ask you to try that with your lending institution first and tell me how that works for you.

What you see as a problem is what I see as the effect, not the cause, of a much larger problem. More problems have been created by trying to fix a perceived problem than the problem itself. What is needed is more regulatory oversight with a huge dose of accountability, personal and corporate, to avoid getting into this mess again. If left alone the problem will fix itself, no ammount of meddling will help, in case you forgot the old phrase, "I'm from the government, I'm here to help you".

What I do see as a problem is the constant attempts at social and economic engineering, and the cheerleaders of those attempting to do so. Neither society nor the economy are mechanical; they cannot be any more successfully engineered than a living creature. Your proposal is just like any other engineering project that attempts to correct the wrongs that other failed engineering projects caused in the first place.

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So then, how should it be fixed? If somebody can come up with a better idea than me, (as much as I want to be the one to do it) then I say we go with that.

I do not let pride get in my way, when it comes to policy decisions. At the end of the day, I do not care where it comes from, as long as it is the correct option.

Yes, I know banks use our money to loan out, but people still need to go into debt, to get that money. (others believe banks create money out of nothing, which I do not get why they believe that. I think they need to see a transfer from Bob's account, into Steve's account, or something)

 

[JLM]

I don't know where you get the idea that banks produce our money supply. Banks may be a repository for monetary instruments, but they don't produce the stuff. Nor do banks produce credit, they may extend it, but credit is ulimately the responsibility of the borrower. As well, many of us own investment instruments that in fact extend credit to banks and other institutions which means the bank owes us. This is money the banks loan out to others from which we receive dividends.

Governments shouldn't have to borrow money but they did so to pay for wars at first, then to get themselves re-elected. I can't speak to other countries, but our debt was quite small before Trudeau decided to expand government. The debt has been added to ever since as the people's demands got more expensive

I believe our debt back in '68 was in the $millions- less than $billion! :smile:

 

[L Gilbert]

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I believe our debt back in '68 was in the $millions- less than $billion! :smile:

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Nope. It was likely in the millions back in the 40s though.http://fathersforlife.org/images/feddebt.gif

 

[JLM]

Nope. It was likely in the millions back in the 40s though.http://fathersforlife.org/images/feddebt.gif

I could be mistaken, but it might be the first time. :lol: