Skip to main content

“I am a Canadian, free to speak without fear, free to worship in my own way, free to stand for what I think right, free to oppose what I believe wrong, or free to choose those who shall govern my country. This heritage of freedom I pledge to uphold for myself and all mankind.” ~~ John G. Diefenbaker

FRASER INSTITUTE – Continued financing of government debt by the Bank of Canada poses significant economic risks


The idea that the Bank of Canada can continue to finance government debt by printing money without a clear commitment to repayment, known as Modern Monetary Theory (MMT), poses enormous risks to the Canadian economy, finds a new study released today by the Fraser Institute, an independent, non-partisan, Canadian public policy think-tank.


Modern monetary theory is a pipe dream, and if the federal government and Bank of Canada go down this road, the damage to the Canadian economy could be substantial,” said Steven Globerman, resident scholar at the Fraser Institute and author of A Primer on Modern Monetary Theory.


Advocates of MMT assert that a government that issues its own currency (like Canada and the United States, among others) cannot default on debt issued in its sovereign currency because it has the power to print as much currency as needed to pay off the public debt.


Indeed, during the current COVID-19 crisis, Canada’s central bank financed historically large shares of government bonds to encourage lending and investmenta practice described as Quantitative Easing.


If the Bank of Canada does not require the government to repay that debt once it matures, Quantitative Easing will have evolved into MMT.


“The Bank of Canada is facing an imminent test of its credibility and independence over the coming months,” commented Globerman.


Crucially, where MMT has been tried in the past, it has resulted in inflation, sometimes even hyper-inflation, with devastating consequences for domestic economies.


In particular, the implementation of MMT in Latin America and Greece resulted in runaway inflation and a significant decline in standards of living.”


The arguments for MMT are really arguments for much higher levels of government spending financed by borrowing provided by the central banks, which has failed everywhere it’s been triedGloberman said.


Popular posts from this blog

It seems the call for blood donors is being responded to, however ... “This effort is a marathon, not a sprint” says Canadian Blood Services

A week and a half ago I wrote the commentary ... “ While the national inventory is currently strong, an increase in blood donor cancellations is a warning sign of potential challenges to maintaining a health inventory of blood ” It was written as a result of talk about a potential blood shortage that would occur if people stopped donating due to the COVID-19 virus. It seems the call to Canadians was responded to, however, as I was told this afternoon ... “ T his effort is a marathon, not a sprint ”. As it now stands now, donors are able to attend clinics which are held in Vancouver (2), Victoria, Surrey, and in Kelowna, so I asked if there any plans to re-establish traveling clinics to others communities - for example in Kamloops, Prince George, Prince Rupert, Revelstoke or Cranbrook, and perhaps further north at perhaps Ft. St. John? According to Communications Lead Regional Public Affairs Specialist Marcelo Dominguez, Canadian Blood Services is still on

FEDLSTED -- Rules will have to relax-- the question is how and when

The media has created a fervour over the mathematical models that allegedly help governments predict the future of Coronavirus infections in the general population. Mathematical modelling has limited use and value. We need to understand is that the data available on Coronavirus (COVID-19) infections in Canada is far too small for statistical reliability. The data available for the whole world is useless due to variables in how nations responded to Coronavirus infections. There is no commonality in steps taken to combat virus spread and no similarity in the age demographics of world nations, so the numbers you see on the daily tracking of world infections are not useful in developing a model of infection rates that can be relied on. Mathematical models of the future spread of Coronavirus are better than nothing, but not a whole lot better.  Mathematical models must include assumptions on virus spreads, and various factors involved. As they are used in projections, a small erro

When necessary – and only when necessary – the Family Maintenance Enforcement Program can attach (garnish) wages

Alan Forseth ~~ Kamloops, BC ~~ May 15th Earlier this week (Monday May 13 th ) the BC government announced it would be establishing a new Crown agency to oversee the Family Maintenance Enforcement Program (FMEP).   They indicated that on or before the end of October, the provision of family maintenance services would transition from a contracted service provider, to the newly created Crown agency. Apparently, this was to ensure that family maintenance enforcement services for vulnerable British Columbians continue uninterrupted. Seeing this story, reminded me of a woman ( we’ll call her Mary Brown ) who had email me some time b ack about this very thing, and questions she had about how maintenance enforcement was imposed and enforced. She said to me, “ I’m just curious if you can get any statistics of the homeless men and woman, that have children, that they are paying family maintenance in support of their children”.  “I am not about to sugg


Show more