Reforming the Bank of Canada

By Crowell, George H. | Canadian Dimension, October-November 1995 | Go to article overview

Reforming the Bank of Canada


Crowell, George H., Canadian Dimension


The budget cuts announced by Finance Minister Paul Martin, when implemented, will undermine the fundamental character of Canada's social programs -- especially their universality and their adequacy for meeting basic needs of the most vulnerable people in our society. We are told that these cuts are unavoidable because we must give priority above all else to coping with our public debt.

It is evident from the arithmetic of the budget, however, that even massive cutting of social programs cannot solve the debt problem. It calls for reductions over two years of $13.4 billion in spending on programs, $4.4 billion of which will be passed on through cuts in transfer payments to the provinces, increasing their debt burdens. At the same time interest payments on the debt are project to rise to $50.7 billion in 1996-'97, eight to ten billion dollars over the level prevailing in the early years of this decade. This staggering increase in interest payments will offset more than half the reduction in program spending.

Any savings to be achieved from painstaking and painful cuts to our social programs can quickly be nullified by relentless increases in the interest payments required to service our public debts. If present government practices continue, Canadians, with their taxes, will continue to pay interest to wealthy bondholders, a large proportion of them foreigners, instead of supporting their own much-needed social programs, which will have been devastated.

We are encouraged to think that "short-term pain will lead to long-term gain." The powerfully entrenched trend, however, is far more likely to bring long-term pain for most of us who rely on our social programs, and long-term gain for the few who do not need them and whose wealth will increase from their diminution.

The real purpose of this exercise is not to cope with the debt, but rather to cater to the interests of wealthy bondholders along with the rest of the financial community, and to foster privatization for the benefit of powerful corporations. As social programs are cut, private business will move in to take advantage of opportunities for profit, and essential goods and services will increasingly become inaccessible to the poor. With high unemployment and little left of our Unemployment Insurance system, corporations will have access to cheaper, more pliable labour. Social conflict, crime, suicide, and discrimination against women, minorities, and children are all likely to increase, as they have under a deficit-cutting agenda in New Zealand.

We must conclude that these most probable consequences of current policies are fully intended. The real agenda behind the program cuts is not to cope with the debt, but rather to keep the debt sufficiently intact so that it can be used as a bludgeon to promote the interests of wealthy elites.

We desperately need to gain control over the debt quickly in order to preserve our social programs. But we are told that the only way to cope with the debt, other than cutting government spending, is to raise taxes -- and, of course, it is quickly added, taxes are already too high. It would certainly be helpful if taxes on the rich could be restored to the level of two or three decades ago. But in the present political climate any such effort is likely to be futile. Moreover, the requirement for interest payments on the debt can quickly overrun gains from increased tax receipts, just as they can overrun gains from reduced spending.

It is crucial for us to reduce the enormous interest payments which are now the primary driving force behind the burgeoning public debt. Linda McQuaig in her latest book, Shooting the Hippo: Death by Deficit and Other Canadian Myths, refers to a recent study from Statistics Canada which "showed that the rising cost of interest payments accounted for a staggering 70% of debt growth!" (p. 117). This devastating problem rooted in high interest rates and growing interest payments, can be overcome only through changes in the policies of the Bank of Canada. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Reforming the Bank of Canada
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.