This article was written by Louis Even in 1961 when Canada’s population was 18,273,000. The population of the United States was 179,000,000. This article should be studied by every political leader at the federal and provincial/state level to understand the failures of the current system of finance and comprehend what is possible.
Each year, usually in the spring or early summer, the government must produce what is called “the budget.” The budget is an estimate of the nations expected income on the one hand, and the expenditures on the other.
Under the current financial system, it is a requirement that the budget be “balanced” - in other words, that the spending not exceed the revenues. Otherwise, there will be a deficit, and deficit means debt. This debt would become a burden on the budget or on budgets of the future.
At first glance, this requirement of balanced budgets would seem indisputable, especially if we assimilate the public budgets with those of individual budgets. Any individual would not, unless he goes into debt, have more expenses than he has revenues.
An individual of his own accord can not create money, nor can he order the production of money. All the money he can use for his expenses will need to come from some source: a salary if he’s a hired employee; profits from business; investment income, etc.. He cannot afford to go for very long with his expenses exceeding his revenues.
But shouldn’t this be the same for the government? The answer is yes, for those who think only in terms of money, but the answer is no, for those who think more in terms of reality.
For example, the national budget is obviously the budget of the nation, and not that of Mr. John Doe, the Minister of Finance. The budgeted expenditures will be made for the purpose of the population as a whole. Moreover, it is to the population as a whole that the government will address itself in order to obtain the means to meet these expenditures.
But because it is the population as a whole who will also provide the financing of the planned expenditures (except for imported goods or services), the population should have the right to ask under what authority the government is financially taxing the population for what they themselves produce.
Let’s look again at the case of the individual. Peter is a farmer. If he wants to buy, say a tractor or a car, he will definitely have to get the money to pay for the tractor or the car from a source, for example, from the sale of his products, in order to pay for his tractor or car. But if it’s potatoes that he’s looking for to put on his table, should he be made to wait until he has the money to pay for them before he can go get them from his cellar? Or will he need to make his potato bed larger, when he already has plenty of free space in his field?
Peter may be subjected to the need for money for those things which he is unable to produce himself, or for the things which he does not produce because his entire farm is already being used for other things. But most certainly not for the use of those things which already belong to him. It would be unthinkable for Peter to deprive himself of what he has for lack of money, or to have to borrow money in order to have the right to use what he already owns. There is no need for him to deny himself of his cow’s milk with the condition of waiting to get potatoes from his field.
It is this same absurdity, which is considered dogma, when it comes to our nation or our province. Quebec, for example, is capable of providing all the labor and other elements necessary for the execution of the road works program for 1960-61, while at the same time still maintaining the flow of consumer products that keep the stores stocked. Why, then, take money from individuals with needs, under the pretext of needing it to work on the road?
— But everyone who works on the road must be paid!
— Certainly, and what that means in reality is that the workers must be compensated for their work by giving them a claim to the goods that await them in the stores. Are we worried that there will not be enough goods for everyone unless some are forced to go without until we can pay the road workers?
If it seemed that there was a possible threat of all the consumer goods being depleted, then we might consider reducing the portions of some so that there would be enough goods to go around. Seeing as this is not the case though, to ration the goods would be ridiculous. But this is exactly the type of rationing that is taking place today when we tax private property in order to pay for public goods. This is equivalent to taking food from John’s plate and putting it into Jimmy’s when the cooking pot is full to overflowing.
Today (1961) with more than 300,000 unemployed in the province of Quebec, when there are nearly one million (registered or not) across Canada, the cooking pot is overflowing.
Whether national or provincial, in order for a budget to conform to reality, it must be set according to the public works and services that are required by the population, and also if the population is able to provide the manpower without jeopardizing the production of private goods. This is to be understood in terms of ability to produce — in finding the labor, materials and other things required for public projects and services.
For example, if, in order to respond to the public demand to construct 100 kilometers of road, we consider in the budget for the road the construction of 100 kilometers of road, the question is not: “Is there enough money to build the road?” You do not build a road with money, but with labor and materials. The question should instead be: “Can we find enough labor and materials to build the 100 kilometers of road? Can I use the workforce and materials needed to build this road without decreasing the production of carrots, potatoes, butter, meat, clothes, shoes, etc.?”
If the answer is yes, then there is no reason not to build the road, nor, thereby, to deprive the citizens of their means to purchase the carrots, potatoes, butter, meat, clothes, shoes, etc..
If the answer is: “No, the country is unable to continue providing goods for stores when so many are employed in the construction of the road.” — Then it would be a case of choosing between abandoning the project of the road in order to assure that we do not actually run out of food, clothing, etc.. Or maybe downsizing the road to only 40 or 50 kilometers instead. — Again, always considering the actual possibilities. Representatives of the people determine this, but in terms of ability to produce, and not in terms of tax capacity or the ability to find the money.
When it comes to the question of whether or not the country can afford what needs to be produced, it is a matter of accounting, not a question of banning the right to the products which are produced at a faster pace than they can be consumed.
The inability to pay when the capacity to produce is there is a sign of faulty accounting.
For a government to submit to such false accounting is senseless and criminal subservience. Senseless, because governments spend so much time racking their brains for what is a purely artificial problem. Criminal, because the people of the country are being punished by being deprived of their own wealth.
Under such conditions, taxes and income tax are a tax servitude. It is to acknowledge submission of the population to a tyranny of credit controllers; controllers of something that rightfully belongs to the population itself.
By not resorting to issuing credit in order to implement the unused productive availability, the government is already a slave to the system. Likewise, when the government chooses to finance services and public projects through individuals, with money dependent upon the banks.
In fact, no matter what the source is from which the individual may have obtained his money, this money comes primarily from the banking system in the form of a loan, and must be repaid. This money is only in transit, from the time it leaves the banking system until the time it returns to the banking system. And its time of duration in the hands of the individual is determined by the conditions imposed by the banks. The repayment rate can be accelerated at their discretion.
Why isn’t the Bank of Canada what it should be — a bank belonging to the Canadians to financially serve them to the extent that they themselves produce all the wealth, public or private?
Why doesn’t the provincial government, when faced with the failure of the federal government, establish a provincial credit system to finance all the true wealth, whether public or private, that the population of the province of Quebec is capable of providing?
Why are realities, whether in Ottawa or Quebec, subject to a financial decision instead of submitting the finance to realities, the reality of things and the reality of human needs?
Governments are elected by the people (at least apparently). When will they cease to be the defenders of the temple to Mammon; agents of Mammon, who sacrifice to this god the people under their charge?
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