iDebt Solutions

Using the Bank of Canada to Reduce the Federal Deficit Without Causing Inflation

"Actually, we need to INCREASE the deficit, NOT with private interest-bearing dollars- as is now the case- but dollars borrowed from our public bank, the Bank of Canada, at zero cost to the federal government.

In this way we could refinance government debt to private sector lenders at lower interest rates.
The video (right) describes how money may be created by the Bank of Canada.

 


 

 

 

 

"Here's a quote (to the right) for you from a fellow named Don Findlay who, in 1997 wrote a paper called:

 

 

 

 

 


 

 

 

'While borrowing too much money can lead to inflation, once the decision to borrow has been made it is no more inflationary for the government to borrow from the Bank of Canada than it is for it to borrow from private financial markets. In fact, it is less inflationary by exactly the amount of the interest that the government saves by using its own bank.'

 

 

 

 

 

 

However, along with the creation of this government created money (GCM), statutory reserves would need to be reinstated, -- precisely to inhibit inflation."
"Ha! I was just going to say that- that you can't do what you're suggesting because it'll cause inflation..."

"Yes. The knee-jerk reaction to the suggestion that our government borrow from the Bank of Canada is that it would cause run-away inflation. Since for over 30 years our government has not borrowed significantly from its own bank, but primarily from private sources at interest, we might assume that there has been very little inflation."
"It seems that's so. At least, that's what we're told. Keeping interest rates up, prevents inflation- is what they say..."

"It's not true. Just think for a moment what a house cost 30 years ago and what a similar one costs today. Consider how the costs of food and fuel have soared, just this year."
"Well, true enough...the price of everything just keeps going up..."


 

 

There Is a Way to Reduce Taxes Without Increasing the Deficit, Causing Inflation, or Destroying Canada's Social Programs:

 

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