What did Trudeau mean?

February 2, 2016

 

What did Justin Trudeau mean?          – Bev Currie

What did Justin Trudeau mean when he said, “Sunny ways my friends, sunny ways.” and “We are back.” Did he mean that we are now back to the good old days of Liberal governance, warts and all? Let’s hope not.

It is true that Canadians have benefited from Liberal- initiated programs such as the Old age Security Pension, the Canada Pension Plan, Medicare and the abolition of Capital Punishment. It is interesting to note though, that these initiatives were enacted by Liberal minority governments. Liberal majority governments have not been so enlightened.

In his book,” Lester Pearson’s Peacekeeping – The Truth May Hurt,” Yves Engler reveals the dark side of this Prime Minister.

Engler says Lester Pearson made controversial political decisions that at times bordered on the “war criminal.” For example he says Pearson delivered weapons to the French to put down the Algerian and Vietnamese independence movements and he backed US coups in Iran, Guatemala and Indonesia.

Incredibly, the dark stain on Canadian foreign policy, left by the twentieth century Prime Minister Lester Pearson has been closely rivaled by the first two Liberal governments in the twenty first century.

Afghanistan: Jean Chretien’s war:

Without a United Nations resolution of authorisation, Canada’s role in Afghanistan began in October 2001 and ended in 2011.

It was Canada’s longest war. It was also a costly war: Deaths 159, wounded 2000, suicides 160 and all at a cost of $18.5 billion.

For Afghanistan: Over 91,000 Afghans, including civilians, soldiers and militants have been killed in the conflict, and the number who have died through indirect causes related to the war may include an additional 360,000 persons. Not including those who have died in Pakistan.

By any measure it was a disastrous war that will go down in infamy.

Iraq: Jean Chretien’s surreptitious war.

Just three day s before the United States embarked on an illegal, senseless war in Iraq, Prime Minister Jean Chretien stood in the House of Commons to announce, “If military action proceeds without a new resolution of the Security Council, Canada will not participate.”    It was an exercise in hypocrisy. We didn’t have long to wait for Chretien to brake this promise as confirmed by Paul Celluci, U.S. Ambassador to Canada. (Mar. 25 2003).

“Ironically, Canadian naval vessels, aircraft and personnel in the Persian Gulf…who are fighting terrorism will provide more support indirectly to this war in Iraq than most of the 46 countries that are fully supporting our efforts there.”

Haiti: Paul Martin’s forgotten war.

Writing for the Coalition to Oppose the Arms Trade, Richard Sanders summed up Paul Martin’s criminal adventure in Haiti.

“Things went from bad to worse after Canada’s Liberal government helped plan and carry out the 2004 regime change that illegally ousted President Aristide’s democratically-elected government. Canada then helped empower and entrench an illegal coup-installed puppet regime that launched a reign of terror in which thousands of prodemocracy supporters were executed, jailed without charge, driven into hiding, or exiled.”

Why did Canada help the United States and France overthrow Haiti’s constitutional government?

The short answer can be found in, “Waging War on the Poor Majority.” A book co-authored by Anthony Fenton and Yves Engler.

“Former Foreign Affairs Minister Bill Graham explained: “Foreign Affairs view was there is a limit to how much we can constantly say no to the political masters in Washington. All we had was Afghanistan to wave. On every other file we were offside. Eventually we came on side on Haiti, so we got another arrow in our quiver.”

Paul Martin completed the Liberal Hat Trick. The Chretien government got us into Afghanistan to appease the United States for rejecting its invitation to join the “Coalition of the Willing” in Iraq. Then the government changed its mind and got seriously involved in Iraq anyway.

Incredibly, Bill Graham must have forgotten his government had reversed its decision to stay out of Iraq and used the same excuse to invade Haiti. Thousands of prodemocracy supporters were executed in Haiti in exchanges for an arrow Canada had already given to the U.S. Bill Graham’s quiver indeed? You can’t make this stuff up.

A sea change is clearly needed in Canada’s foreign policy if Justin Trudeau is serious about the “sunny ways” of negotiation, compromise and conflict resolution. If confronted with his party’s sordid foreign policy record, would he commit to a more enlightened future? So far there is not much reason for optimism. He is reluctant to make any final decision on the CF 18 bombing in northern Iraq and he has already committed to sell armored military vehicles to Saudi Arabia. More troubling is his party’s support for the U.S overthrow of the elected government in Ukraine and its support for the Nazi infested government that has replaced it.

Like the residential school scandals these wars are institutional crimes against humanity. If we are to apologise for one, we should apologise for the other.

What will Justin do if confronted with this inconvenient truth?

Will he apologize for his warmongering predecessors and pledge to make the Liberal Party of Canada a true party of peace?

He could take comfort from knowing that Jeremy Corbyn, the new leader of the British Labour Party has apologised for his party’s criminal invasion of Iraq.

Now the question is who (or perhaps what organization) will take the responsibility to bell the cat.

 

 

 

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Chatter In The Forest

May 3, 2015

Chatter In The Forest.

There’s chatter in the forest from the chipmunks and the birds.
There is positive excitement ever since they got the word.

They say, a stranger is amongst us that we’ve not seen before.
And they are shouting from the treetops down to the forest floor.

The scholars claim he could exist although he is quite unique.
For he’s written in mythology of the Norsemen and the Greek.

The native tribes are adamant; he’s been seen in days of yore.
For he’s chiseled in their petroglyphs and storied in their lore.

We know, in the book of Genesis, the Lord created quite a few.
But by the time Noah launched his Ark, he had only two.

There’s chatter amongst the masses too, the peasant, doctor, saint.
Of whether a creature could exist that really is that quaint?

The doubters are quite cynical and claim a right to ask.
Could he be with us now though dynasties have past?

Now my friends, I’m here to tell how fate had chosen me.
Perhaps by luck or happenstance or serendipity.

For while I was strolling through the woods, I saw him in a tree.
I was staring up at him and he was glaring down on me.

Time stood still. I could not move. Then I heard his plaintive call.
For this creature is none other than the Seven-Peckered Owl.

Oh, the Seven-Peckered Owl is majestic and he is wise.
And each one of his peckers is twice the normal size.

I am here to tell, this bird is more droll than one would think.
Once I was staring at his peckers and I’m sure I saw him wink.

This bird deserves to be left in peace to feed his little brood.
But like so many mortal men, I had a change of mood.

I could put him in a circus tent and place him on display.
Folks would come from miles away, no telling what they’d pay.

So I carried out my ladder and leaned it against his limb.
And left it there long enough, til it didn’t bother him.

One morning while my precious find, took his diurnal sleep.
I crept up behind that somnolent bird trying not to make a peep.

But owls are noted for their hearing and their sight.
For when I made a lunge for him he took to wing in fright.

He flew into the chicken coop and hid amongst the flock.
So I crept in between the hens and grabbed him by the cock.

The cock was quite indignant that I’d caught his avian friend.
That’s when I felt his yellow pecker pecking on my hand.

While laying in the dark and dust I loosened up my grasp.
And the last time I saw that bird, he was heading west.

Oh somewhere there’s a forest and in it there’s a tree.
Where a proud owl safely sits with his family.

Let us wish him well in his quest, for the solitude he seeks.
For we know his seven peckers are his seven beaks.

Sanctions on Russia

April 2, 2015

The drop in the world price of oil is making life difficult for oil producing countries. The reason for the price drop, we are told, is because OPEC could not agree to cut production in order to keep prices from falling.
Those of us who surf the alternate press will know there is another explanation for this. The mainstream media ether doesn’t know about it or doesn’t want us to know.
A report titled, “The Secret Stupid Saudi-US Deal/on Syria” reveals a plan for Saudi Arabia to reduce the price of oil with the goal of effecting regime changes in Russia, Iran and Syria.
To complement this plan, a group of mostly NATO countries have imposed sanctions on Russia. The ostensible reason for this is because of Russia annexing Crimea but suspicious minds believe it is just another way to hasten the ruin of the Russian economy.
Now Vladimir Putin has signed a military doctrine that names NATO as Russia’s top external threat.
Here is a question for all of us who live in these NATO countries, “How has ruining the economies of other countries worked for us so far”? It has worked out just ducky in Afghanistan, Iraq, Syria and Libya hasn’t it? If we like what we have done to those four countries, we are going to love what we are doing to Russia.
If this weren’t so serious it would be funny. But then there isn’t much funny about a nuclear war is there?

Victims of Communism Memorial

April 2, 2015

The Harper government is promoting a 5,000-square-metre Memorial dedicated to the Victims of Communism. The cost (estimated to be as high as twelve million dollars) will come mostly from taxpayers.
To be fair this should be none-partisan and include a memorial to victims of Anti-Communism.
To this end the Second World War would get top billing as an example of the evils of Anti-Communism.
The Treaty of Versailles (which limited Germany’s military assets) was wilfully breached with the tacit understanding that Hitler would go east and rid the world of the Godless Communists in the Soviet Union.
Five years and 60 million deaths later, it was these Godless Communists that kept the rest of Europe from having to learn how to speak German.
This is well documented in a book titled, “In Our Time: The Chamberlain-Hitler Collusion.” Let that put Chamberlain’s “appeasement” to rest.
For the rest of the Twentieth Century, the west (mostly NATO countries) made a career out of making the world safe for dictatorships. In the name of Ant-Communism, Vietnam, Cambodia, Laos, Indonesia (2.5 million more deaths) and 52 other countries had their sovereignty grievously violated.
This too is well documented in William Blum’s book, “Killing Hope-U.S. and CIA Interventions since World War II”
The Hypocrisy of Harper’s half truths should not go unchallenged.

Harper & Trudeau

December 14, 2014

I felt my blood pressure rising as I read the comments of Stephen Harper and Justin Trudeau regarding the killing of two Canadian solders in Ontario and Quebec.

I want to be clear, these two senseless killing will rend the heart of anyone who has one, and the expressions of sympathy from these two political leaders were quite appropriate in that regard.  Then the politics cut in. They should have quit while they were up.

Do these two political leaders know that we (mostly NATO countries) have carried out a million times more acts of terror on middle Asian countries than they on us?

We don’t carry out random acts of terror, we destroy whole countries. In Afghanistan, Iraq, Libya, Syria, the list goes on. We have created millions of refugees and killed millions of civilians and left their countries in ruin.

George W Bush said these people hate us for our freedoms. No, they hate us for our bombing them and torturing them in prisons like Abu Ghrab in Iraq, Bagram Afghanistan and at Guantanamo Bay.  Think of the grief the anger and the pain we have wrought.

As Pogo said, “We have met the enemy and he is us.”

Civilian Casualties

May 10, 2010

How many war crimes will NATO forces have to commit in Afghanistan and Pakistan before the good people of Canada demand that this misadventure be terminated and our troops brought home?

On September 4, 2009 two fuel trucks were disabled by Taliban fighters. in Kunar Province   When local people arrived in large numbers to take some of the fuel, German forces called for a US air strike.  142 people were incinerated. Video tapes from the US F15 jet showed most of the people were unarmed civilians filling their containers with fuel.

On Dec 27, 2009American led troops raided a home in Kunar Province, dragged eight school children from their beds and gunned them down execution style.  Their ages were 11 to 18.

On February 12, 2010 American and Afghan forces raided a home during a party and killed five people including a local police commander, a district attorney, two pregnant mothers and a teen-aged girl.

A report by the New American Foundation speculates that US drone strikes in Pakistan have killed between 700 and 1000 people, one third of them civilians.

Surely, anyone with a heart to rend and a few viable brain cells to reason with, will have to conclude that all of these killings are crimes against humanity.  We can’t wait twenty more months before leaving Afghanistan.  We must demand that our troops be brought home now.

Lies and Hypocrisy

May 10, 2010

Those who can make you believe absurdities can make you commit atrocities.  — Voltaire

There are two words we should always have in mind when we search for answers to the US invasion of Afghanistan.  The two words are, “lies” and “hypocrisy”.

Every reason given for the invasion was a lie and the acts of hypocrisy are legion.

On October 7 2001 the first “smart bomb” fell on Kabul, the capital city of Afghanistan. Apparently the Americans forgot to give their bombs an IQ test, for one of the very first bombs fell on a clearly marked UN building, killing four, and wounding several other UN personal that were deactivating land mines.  The Americans were reputed to have said that they thought UN building was the first place the terrorist would hide. If so, it looks like the bomb was not suffering from Attention Deficit Disorder but was doing exactly what the Americans intended it to do.

No one really believed Osama bin Laden was in Kabul at the time but nothing would scare the bejeezus out of him like killing a few innocent UN workers while he hunkered down in a cave somewhere in the Tora Bora Mountains.  From here on in things started to go down hill.

The ostensible reason for the invasion of Afghanistan was a response to the 9/11 attack on the New York Trade Center.  The mission was to kill the terrorists and bring Osama bin Laden back dead or alive. Bush said at the time, “The most important thing is for us to find Osama bin Laden. It is our number one priority and we will not rest until we find him.”  Very little was said about bringing democracy to the Afghan people.

In fact, the real reasons for the invasion of Afghanistan were twofold One was to install a compliant government in Kabul that would allow oil and gas pipelines to cross the country.  The other reason was to prepare the world for the invasion of Iraq even though Iraq had nothing to do with the 9/11 attack on the Trade Center.  A document named, “The Project for the New American Century,” detailed Washington’s plans to invade both Afghanistan and Iraq, plans that were made long before the 9/11 attack. As well, in June and July of 2001, the US (at meetings held in Geneva and Berlin) made concrete plans to invaded Afghanistan in October of that same year.*  The terrorist attacks on 9/11 gave the Americans the excuse they were looking for and the bombs soon started falling on Kabul.

If there are any persons left in the world who believe the invasion of Afghanistan was a response to terrorism, their beliefs would surely be shattered if they learned about the drama that unfolded in the White House shortly after the 9/11 attack. It took a few years for the truth to come out but when it did it confirmed the suspicions of those that believed that the invasion of Afghanistan was used solely to connect Saddam Hussein to Osama bin Laden and condition American public to support an invasion of Iraq.

Richard Clarke was known as the American anti-terror czar. He had served under several White House administrations and was one of the few George W Bush confidants who escaped with his integrity intact. In his book, “Against all Enemies” Clarke revealed in graphic detail just how insincere Bush, Wolfowitz and Rumsfeld were when they reluctantly agreed to the invasion of Afghanistan. **

A compliant government in Afghanistan was the easy part. Securing the countryside has proven to be a tougher nut to crack. Six months after the invasion Bush said, “I don’t know where bin Laden is. I have no idea and really don’t care. It’s not that important. It’s not our priority.”

The U.S. began shifting the fight in Afghanistan to other NATO members so that it could free up U.S. troops to be deployed in Iraq. The oil in Iraq has always been the real prize for the avaricious Americans

The history of America’s involvement in Afghanistan is a lesson in hypocrisy. The Soviet supported Peoples Democratic Party (PDP) government (1978-1992) was the most enlightened government Afghanistan has ever had.  Peasant debt to landlords was cancelled, child marriages and forced marriages were outlawed and schools and clinics were built.  Women were not only allowed, but also encouraged, to get an education. The government affirmed the separation of church and state and labour unions were legalized. Land reforms were starting to be implemented.

In Afghanistan, as in so many other countries when reform rears its ugly head, the Americans were standing ready to put it down. They did it by arming, training and financing every right-wing extreme fundamentalist in the area. This loosely-knit band of warlords, drug dealers and sundry tribesmen were known as the Mujahadeen.

The world was led to believe the U.S. intervention was in response to the Soviet invasion of Afghanistan.  The Americans, we were told intervened to drive out the godless Soviets and bring freedom to the Afghans.

Zbigniew Brzezinski, U.S. National Security Advisor to Jimmy Carter (1977- 1981) spilled the beans in 1998, long after the truth no longer mattered.

He said, “According to the official version of history, CIA aid to the Mujahadeen began during 1980, that is to say, after the Soviet army invaded Afghanistan, 24 Dec 1979.  But the Reality, closely guarded until now, is completely otherwise: Indeed, it was July 3, 1979 that President Carter signed the first directive for secret aid to the opponents of the pro Soviet regime in Kabul.  And that very day, I wrote a note to the President in which I explained to him that in my opinion this aid was going to induce a Soviet military intervention,”

When Brzezinzki was asked if this wasn’t giving arms to terrorists he replied: “What is most important to the history of the world?  The Taliban or the collapse of the Soviet empire?  Some stirred up Moslems or the liberation of Central Europe and the end of the cold war?”

We were soon to learn what a few “stirred-up Moslems” could do.

In 1988 the Soviets pulled out of Afghanistan but it took another three years before the PDP was defeated. The U.S. feared that what the Mujahadeen had done to the Russians they would now do to them.  The Americans for all practical purposes pulled out of the area. Any pretence of bringing democracy was soon abandoned.

With no one left to fight, the Mujahadeen did the only thing a respectable band of warlords could do: fight against themselves. So they turned against each other with all the fury of their war against the PDP. The war raged from 1992 to 1996. Some reports had this civil war destroying 70% of Kabul and killing at least 50,000 people, most of them civilians.

The devastation and destabilization caused by the war allowed the Taliban to gain power in 1996.

US tax dollars helped create the Taliban.  In the 1980s, the CIA had trained and financed various fundamentalist Islamic groups in Afghanistan, some of which morphed into the brutal Taliban government.  The US government admitted giving at least $6 billion in military aid to these fundamentalist groups.

Millions of US dollars continued to pour into Afghanistan right up to 9/11, 2001.  In that year alone the Taliban government received $125 million from the USA.

All this did not come as a surprise to anyone who had even a cursory understanding of American Foreign interventions.  The US has had a long symbiotic relationship with Osama bin Laden.  Both supported and financed the Mujahadeen in Afghanistan and again in Bosnia.  Both Osama bin Laden and the CIA trained and financed The Kosovo Liberation Army: an organization Canadian General Lewis McKenzie labeled a “terrorist organization”.

Since the second world war lies and hypocrisy have been constant companions of every American administration, and like Siamese twins, one doesn’t go anywhere without the other.

* CREATING A FAILED STATE     JOHN W WARNOCK

Page 83: In June 2001 Chokila Iyer, the Indian foreign minister, reported that the United States and Russia were planning a military attack on Afghanistan through the borders of Tajikistan and Uzbekistan.  They planned to back the warlords of the Northern Alliance in an effort to overthrow the Taliban government.  The Indian government agreed to “facilitate” this military action.  This planned attach on Afghanistan was widely discussed at a July 2001 meeting of the G8 countries in Geneva.

The United Nations has been hosting a series of meetings in Berlin between the United States, Russia and the six countries that border Afghanistan, known as the “Six –plus-Two negotiations.  The eight governments agreed that what was needed was the creation of a new Afghanistan government of national unity that would be fallowed by international economic aid and the building of the pipelines.  Naif Naik, the Pakistani foreign minister reported that the US government threatened the Taliban at the meetings, telling them if they did not agree to this proposal the United States would initiate “a military operation.”  Naik reported that US officials told him that the military action against the Taliban would begin in by the middle of October 2001.

Then cam the events of September 11, 2001, which provided the rational for the military attack that had already been planned.

** Richard Clarke:

Rumsfeld took advantage of 9-11 to push Iraq agenda

I expected to go back to a round of meetings [after September 11] examining what the next attacks could be, what our vulnerabilities were, what we could do about them in the short term. Instead, I walked into a series of discussions about Iraq. At first I was incredulous that we were talking about something other than getting Al Qaeda. Then I realized with almost a sharp physical pain that Rumsfeld and Wolfowitz were going to try to take advantage of this national tragedy to promote their agenda about Iraq. Since the beginning of the administration, indeed well before, they had been pressing for a war with Iraq.

On the morning of the 12th DOD’s focus was already beginning to shift from al Qaeda. CIA was explicit now that al Qaeda was guilty of the attacks, but Rumsfeld and Wolfowitz were not persuaded. It was too sophisticated and complicated an operation, they said, for a terrorist group to have pulled off by itself, without a state sponsor-Iraq must have been helping them.

Source: Against All Enemies, by Richard Clarke, chapter 1

Donald Rumsfeld:

No decent targets in Afghanistan, so bomb Iraq

By the afternoon on Wednesday [after Sept. 11], Secretary Rumsfeld was talking about broadening the objectives of our response and “getting Iraq.” Secretary Powell pushed back, urging a focus on al Qaeda. Relieved to have some support, I thanked Colin Powell. “I thought I was missing something here,” I vented. “Having been attacked by al Qaeda, for us now to go bombing Iraq in response would be like our invading Mexico after the Japanese attacked us at Pearl Harbor.”

Powell shook his head. “It’s not over yet.” Indeed, it was not. Later in the day, Secy. Rumsfeld complained that there were no decent targets for bombing in Afghanistan and that we should consider bombing Iraq, which, he said, had better targets. At first I thought Rumsfeld was joking. But he was serious and the President did not reject out of hand the idea of attacking Iraq. Instead, he noted that what we needed to do with Iraq was to change the government, not just hit it with more cruise missiles, as Rumsfeld had implied.

Source: Against All Enemies, by Richard Clarke, chapter 1

George W. Bush:

Clarke: Bush insisted on connecting 9-11 with Saddam

On September 12th, I left the video conferencing center and there, wandering alone around the situation room, was the president. He (Bush) looked like he wanted something to do. He grabbed a few of us and closed the door to the conference room. “Look,” he told us, “I know you have a lot to do and all, but I want you, as soon as you can, to go back over everything, everything. See if Saddam did this. See if he’s linked in any way.”

Why Cuba?

March 25, 2010

In October 2005 a devastating earthquake ripped through northern Pakistan, killing 75000 persons, leaving 100,000 injured and more than 3 million homeless.

An appeal for international aid went out and one country’s response was above all others. That one country was Cuba. Cuba responded by sending 2,378 medical practitioners, including doctors, nurses and other paramedical staff   Cuban medics served 44 locations with 30 field hospitals. They saved 1,315 lives, preformed 5,925 surgeries and attended 125 births including 24 Caesarean sections.

In 2008 torrential rains caused landslides in Bolivia, killing many persons and leaving over 12000 families homeless. Again Cuba responded, sending 15.7 tons of medicines, 20 field hospitals and 150 volunteer medical specialists.

When the disastrous earthquake struck Haiti on January 12 this year, aid poured in from around the world. Cuba however was already there. Since 1998 Cuba has had over 600 doctors, paramedics and health technicians working there, providing free medical care to Haitians. In addition, Haiti has 450 young Haitians doctors who have been trained free of charge in Cuban collages. In the wake of the earthquake Cuba has sent another team of 60 doctors and health workers to Haiti. Cuba also sent 10 tons of medications.

Why it is then, when we listen to our mainstream news providers, we hear about the good work of other aid agencies but never a word about Cuba?

Socialism, we dare not speak its name

October 16, 2009

Every fall as municipal elections draw nigh, I dutifully read the election statements of the candidates seeking positions on the council of the city where I spend most of my time and treasure.  Yes they are all in favor of better communications, efficiency and accountability and they all have their pet projects such as affordable housing, daycare and zoning issues etc. but none of them so far are campaigning on privatizing any of the many goods and services that the city delivers to it citizens.  Therefore I conclude that they are all a bunch of socialists.

All municipal governments are essentially socialist.  That is, their primary responsibility is to deliver goods and services to their citizens through an infrastructure that is owned by the municipal government.

The list is a long one.  Streets, sidewalks, parks, recreational facilities, fire departments, libraries, water and sewer treatment plants, garbage disposal sites as well as transit buses are all owned and managed by the city state.  Schools, hospitals, nursing homes and subsidized housing are publicly owned but generally governed by separate boards.  My city buys electricity from a socialist Power Corporation and delivers it through socialist power lines to city residences and businesses..

We all benefit from other socialist programs as well.  Police, Medicare and social services for example are paid for through taxation and delivered by either our provincial or federal government.

I would be surprised if any of Canada’s many city councilors or mayors would describe themselves as being socialists.  Frankly I would be surprised if any of them that think of themselves as socialists would openly declare that they are socialists.

Think of it for a moment.  Most of the things in life that we hold nearest and dearest are provided through socialism.  We can send our children to school or go to visit our doctor and no one sends us a bill. We are also guaranteed a minimum standard of living and it is all paid for though taxes.  And yet, socialism, we dare not speak its name.

Socialism of course depends on our ability and willingness to pay taxes. And yet the good name of taxes is being sullied unmercifully by those who benefit the most from having them lowered.  “Get governments out of our face,” they say, “the less government the better because I can spend my money better than the government can.”

One of the problems with tax cuts is that the government has no control over how the tax saving is spent.  How is a tax cut going to build a highway or reduce health care waiting time for example?  The second problem is that the wealthy benefit the most from tax cuts and the poor (who often don’t pay taxes) get very little of the benefit.

So our governments reduce taxes and social spending and the gap between the wealthy and the rest of us gets wider and wider.

Debt And Taxes

September 1, 2009

Debt and Taxes

“It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one fattens the usurers and the other helps the people. If the currency issued by the Government was no good, then the bonds would be no good either. It is a terrible situation when the Government, to increase the national wealth, must go into debt and submit to ruinous interest charges at the hands of men who control the fictitious value of gold.”

Thomas Edison

 

The debt this paper is dealing with is Canada’s accumulated budgetary deficits (ABD).

The absolute debt is rather meaningless unless we have something to compare it with. For example, an absolute debt of $13 billion in 1945 was huge, but an absolute debt of twice that much in 1975 was about as low as Canada’s debt gets.

Although it is by no means perfect a comparison with Canada’s gross domestic product (GDP) is one most often used.

The accumulated budgetary deficit is the debt that is generally used by economists, chief executive officers and governmental officials. Most of the time, these self-appointed pundits sing in three-part harmony. Their refrain is, if we want prosperity we must get everything down. By everything they mean taxes, government spending, debt, inflation and interest rates. In fact, a slow rise in inflation isn’t necessarily a bad thing, and a rise in interest rates may at times be needed to slow inflation. But as we shall see, keeping them low won’t spark a recovery if the government keeps reducing spending, taxes and debt.

Despite the pundits who embrace economic policies of comprehensive reduction (austerity), the free enterprise economy we live in does not respond positively to a diet of reduction.

For the past one hundred years, Canada’s debt, even huge debt, has never been responsible for economic stagnation. It is always the other way around; economic stagnation (and war) causes the debt.

So let’s run this hypnosis’s though the laboratory of history starting with 1913. That year Canada’s debt was as low as it had ever been, and lower than it has ever been since, standing at 12.2% of GDP. A year later World War I broke out and became one of the two causes of Canada’s debt. When the war ended in 1918 the debt was more than double -29.4% of GDP. Immediately depression set in and lasted four years.

At this point the attentive reader might well ask, “Wait a minute, the hypothesis is; debt does not cause economic stagnation, but now a big increase in debt resulted in a depression. How can this be?” Fair enough. The war caused the debt, but not the depression. If the debt caused the depression then surely it would follow that a recovery would have to be sparked to reduce the debt. But that did not happen. By 1921 the wartime debt had doubled to 62.4% of GDP. Only when government, business and consumer demand, delayed during the war, made itself felt after 1921 did Canada experience “the Roaring Twenties”.

Whereupon the government balanced the budget and made faltering steps to pay down the debt. By 1929 the debt in absolute terms was slightly less than it was in 1921 when the post war depression gave way to recovery. But instead of being 62.4% of GDP as it was in 1921, the debt in relation to GDP was close to half that and stood at 34.8%. Economic growth over eight years had reduced the significance of the debt by half.

At that point, the wheels fell of the economic wagon.

It came with a whimper and ended with a bang. The greatest depression history has recorded lasted for ten terrible years. The magic nostrum of lower everything was prescribed in large doses by the government with devastating results. The conservative pundits had all their ducks in a row; low taxes, low government spending, relatively low debt, low interest rates and low inflation. The patient got sicker and sicker and in the end the medicine that worked was high taxes, huge increase in government spending and price controls, (The Wartime Prices and Trade Board).

When World War II broke out, the federal coffers were empty. There is a story, probably true, that C.D. Howe, Canadian minister of munitions and supply, called together all the movers and shakers in industry and government to ask what they could do to contribute to the war effort.

Their response was, the answer depends on how much money he could make available. Howe allegedly replied “You tell me what you can do and I’ll see that you get the money”.

It is not known if that is exactly how it happened but we do know that is what he did. For ten long depression years, under the policy of lower everything, there was no money for anything and then overnight there was money for everything necessary for war.

At the end, after ten years of depression and five years of war Canada’s infrastructure was in a shambles and the national debt stood at 110% of GDP. The debt was higher than it had ever been before or since. If ever there was a recipe for depression his should have been it.

Indeed, like the depression that followed World War I, an incipient depression loomed in1945. But this time the government understood the historical lesson. It knew Canadians would not stand for another depression, so it loosened the purse strings again and set Canada on the road to its greatest recovery. Now everything seemed possible. Thirty years later we had a modern country that Canadians could be proud of. We had built the St. Laurence Seaway and the Trans-Canada Highway and huge hydro dams, for example. We also had social services such as Medicare and Canada Pension Plan. As well, there was huge spending by our provinces and municipalities.

At the beginning of this great recovery the Liberal government balanced the budget and started to pay down the debt. This continued until 1957, the year the Diefenbaker Conservatives government was elected. Under Diefenbaker the debt was allowed to increase and the same policy continued under succeeding Liberal governments.

The most interesting point in this chronology is the year 1976 – thirty years after the Second World War ended. In 1946 the debt was about $13.4 billion (110.3% of GDP). By 1976 the debt was over double what it was in 1946, standing at $28.5 billion, but only 14.4% of GDP. Think of it. Canada had gone through a crippling ten year depression followed by a money-hemorrhaging war and then thirty years of government spending, and in the end the debt had withered. How could this have happened? There are only three possible explanations. One is that it is magic; another is that it is an act of God and the third is what economists call “the velocity of money” or “the multiplier effect”.*

Alas, now the era of stagnation begins under the strategy of neo-liberalism. Under the Trudeau government (with a short interruption by the Clark government) the debt rose from $32.5 billion (15% of GDP) in 1977 to $165.5 billion in 1984 (37% of GDP) – an increase of $133 billion.

Now let’s have a drum role for Brian Mulroney. He came to power in 1984 and when he retired in 1993 he left a debt of $470 billion – a whopping $305 billion increase that now stood at 64.8% of GDP.

How did this happen? Fortunately Brian Mulroney asked the same question and set out to find the answer.

Mulroney asked the Finance Department to study and report to him on the causes of the debt. H. Mimoto and P. Cross were assigned the task. Their 1991 report revealed that 94% of the debt was caused by two things: high interest rates and lower taxes. Only 6% was caused by increased government spending and only 2% of that was social spending.

The debt continued to rise under the Chretien government, peaking at about $560 billion in1996 (69.8% of GDP). True to form, now that the debt was at the highest point since the Second World War, the economy turned around and the Chretien, Marten and Harper governments recorded surplus budgets and started to pay down the debt. By 2007 the debt had been reduced to about $450 billion (32.9% of GDP) and then the wheels fell off again. It was known as a worldwide economic meltdown.

It has been said that capitalism will never fail because socialism will always stand ready to bail it out. The world wide response to the meltdown is testimony to that.

Most banks were broke or teetering on the ledge of insolvency.

World Central Banks responded by printing money like it was going out style.

Canada’s response came in Finance Minister Jim Flaherty’s budget, introduced Oct.14, 2008, just four days before the federal election. It contained a two-part strategy; (a) a bailout for the banks and loans for the automobile industry and (b) an economic stimulus package and vote stimulating tax cuts.

Now, six years later, our debt has risen by $150 billion and the Debt/GDP ratio has remained static at about 33%.

Harper is predicting a balanced budget before the election in 2015.  Will his prescription (Lower everything) lead to prosperity or will debt, as the hypothesis suggest, have to get much bigger before we see a recovery?

It should be acknowledged that even under the rule of capital there is a better way. The wealth of any nation is its natural resources and a population with the skills to exploit them. Canada is rich in both. In a sane world, anything physically possible could easily be made financially possible. We have the power through taxation to keep any one of us from becoming too rich and to keep the rest of us from becoming poor.

Canadians are suffering under the failed neoliberalism of Maggie Thatcher and Ronald Reagan; now embodied in Stephen Harper. The Left should be getting the message out to the sixty percent of voters who haven’t supported Harper, that lower taxes and lower government spending has not led to a fairer, more just society.

* The Multiplier Effect

Let’s suppose the federal government has a surplus of $15 billion. It has about three choices for what it could do with the money. It could pay down the debt, it could reduce taxes or it could spend the money on something. If it paid down the debt it could avoid the annual interest payment. If it reduced the taxes in order to eat up the surplus it would reduce government income for the next year and all the following years unless it raised taxes again. In my opinion the third option is a wiser choice; spend the money on something.

Now let’s suppose that the government spends all of the $15 billion on public housing. This is new money being injected into the economy. All the workers who build the houses now have incomes that they wouldn’t have received if the government had used the money to reduce debt or reduce taxes, as only the government can build public housing or things such as roads, bridges, etc.

Here’s where the multiplier effect comes in. When the government pays the plumber for plumbing the new houses, the money becomes income in his hands and is therefore subject to taxation. The plumber will spend the money in several different directions. If he hires a carpenter to build him a deck, then that money become s income to the carpenter and is also taxed. If the carpenter hires an electrician to do some wiring in her garage then that money becomes income and is taxed. We can see that the original money paid to the plumber can get passed around several times during the year and each time it is taxed by the government.

Some economists say that the money gets passed around on average about seven times within a year. Even if this were so, there is sill some of this money that would not be taxed. Imagine an extreme example of someone taking his wages and going to Las Vegas and blowing it all in a casino. Very little of that money would be available for the Canadian government to tax.

Just to be safe let’s say there is a multiplier effect of four times but all of it is taxable. This means that the original $15 billion of new spending will generate $60 billion ((4 x $15 billion) of economic activity. If, for example, the federal government were to tax the $60 billion at 16 2/3% and the provincial government at 8 1/3%, the total tax would be 25%. Twenty five percent of sixty billion dollars is $15 billion.

Now let’s review. We as taxpayers invested $15 billion in public housing and got all of it back through taxation. Our national debt went down as a percentage of our GDP because of the $60 billion of economic stimulus. As well the new housing will provide permanent jobs for maintenance, administration, etc., which increases the government’s tax base. We also have a new asset worth $15 billion and hundreds of new dwellings for Canadians.

In case you think this is too good to be true; it gets even better. If half of that $60 billion is spent on things that qualify for the Goods and Services Tax, then the government will have additional revenue of $1.5 billion (5% of $30billion). This is enough to pay two years interest on the $15 billion debt that we wisely decided not to pay down in the first place.

Now I’m about to reveal the best kept secret of all. All those billions of dollars that Canada has paid servicing the interest on its national debt could have been easily, painlessly avoided.   That’s right. Canada wouldn’t have to borrow the money from the commercial banks in the first place. We have a bank of our own called the “Bank of Canada” that will lend us money practically interest free.

Political parties are fond of saying; governments are no different than households, deficit financing is the road to ruin. This is not true.

When we go to a bank to borrow money, we can’t ask the bank to give us back part of the profit they make on our loan. The government can. It is called taxes.

When we go to a bank for a loan, we don’t set the interest rate. The governments does, albeit indirectly.

When we go to the bank, we don’t have a bank or our own where we can get a loan for just the cost of writing it up. The government does.

Yes Virginia, there is a Santa Clause. The government really can spend its way out of debt.