| Subject: | [socialcredit] debt is simply a financial tool | | Date: | Friday, June 1, 2007 10:12:06 (-0700) | | From: | william_b_ryan <william_b_ryan @.....com>
|
"(Joe replies:-) Our first 'Social Credit' government
here in BC tried to do that. So far as the Province
was concerned, they did stop borrowing 'directly' very
shortly after assuming office. We were supposed to be
on a 'pay as you go basis' from there on in. A lot of
needed infrastructure was financed by transferring
'ownership', to Crown corporations or various Crown
owned 'Authorities' ~ BC Ferry Authority, BC Hydro and
Power Authority, etc.
"These 'Authorities' were set up like a private
business. They 'borrowed' the money needed to build
the infrastructure in THEIR name, and the loan was
'guaranteed' by the Province of BC. So seven years
after taking office Premier WAC Bennet could claim the
Province was direct debt free.
"For what his various Crown owned creations were
borrowing was on the Province's books as 'contingent
liabilities'. The Opposition continuously ridiculed
this idea, since the overall debt obligations of the
Government of BC as a whole continued to grow all
through his tenure.
"The idea was these 'Authorities', if managed
properly, could liquidate their own borrowings from
the revenues they brought in. By and large they did.
Some of them, BC Ferries for instance, on some of its
'non-profitable' routes to various islands, as well as
on its two main 'profitable' routes to Vancouver
Island, received an annual 'grant' from the government
equal to roughly what would've been spent on the
upkeep of roads or bridges, had they existed, over the
same distances. This allowed it to keep its fares to
the travelling public quite reasonable, and still make
a small profit.
"The key was that these enterprises were quite
well-managed in that era..."
----------------------------------------------------
-----------------------------------------------------
Which is because, unlike government departments, they
were organized as independent profit and loss "Crown"
corporations and authorities under the rules of double
entry accounting. It seems to me that this was a very
responsible policy. The overall debt obligations
continued to grow but under more efficient for profit
management. Perhaps this point was not made
sufficiently clear to the opposition and the public.
Debt is simply a financial tool, not an inherent evil.
----------------original message--------------
(John Rawson wrote:-) In NZ, the Party has taken a
somewhat different stance, (and you will disapprove).
But I'll give the line of reasoning, all the same.
We would stop completely (eventually, it can't be done
immediately) all Government and Local Govt. borrowing
from private sources.
-----
(Joe replies:-) Our first 'Social Credit' government
here in BC tried to do that. So far as the Province
was concerned, they did stop borrowing 'directly' very
shortly after assuming office. We were supposed to be
on a 'pay as you go basis' from there on in. A lot of
needed infrastructure was financed by transferring
'ownership', to Crown corporations or various Crown
owned 'Authorities' ~ BC Ferry Authority, BC Hydro and
Power Authority, etc.
These 'Authorities' were set up like a private
business. They 'borrowed' the money needed to build
the infrastructure in THEIR name, and the loan was
'guaranteed' by the Province of BC. So seven years
after taking office Premier WAC Bennet could claim the
Province was direct debt free.
For what his various Crown owned creations were
borrowing was on the Province's books as 'contingent
liabilities'. The Opposition continuously ridiculed
this idea, since the overall debt obligations of the
Government of BC as a whole continued to grow all
through his tenure.
The idea was these 'Authorities', if managed properly,
could liquidate their own borrowings from the revenues
they brought in. By and large they did. Some of
them, BC Ferries for instance, on some of its
'non-profitable' routes to various islands, as well as
on its two main 'profitable' routes to Vancouver
Island, received an annual 'grant' from the government
equal to roughly what would've been spent on the
upkeep of roads or bridges, had they existed, over the
same distances. This allowed it to keep its fares to
the travelling public quite reasonable, and still make
a small profit.
The key was that these enterprises were quite
well-managed in that era, (later on, after the BCSCL
government was voted out, and then still later as a
'Party', came back in again, such was not the case.)
It also helps when you're government in an era when
the world is beating a path to your doorstep for your
'resources'. And you have, as we HAD then, lot of
undeveloped ones to draw on. Some of them, like our
best timber and various minerals then in demand, were
very competitive with anything anyone else had to
offer at that time.
There were also a number of 'artificial' advantages,
like the USA's ''Jones Act", designed to insure there
would always be an American merchant marine, but which
gave our BC Coastal lumber producers a tremendous
shipping cost advantage in waterborne cargos over our
Pacific Coast US competitors. We could ship lumber to
the US east coast from BC ports using 'flag of
convenience' foreign vessels crewed by 'dog-leg'
labour, (Lascars, Phillipinos, Goans, Greeks, etc.),
and the US mills were stuck with using US registered
vessels, with 'unionized' American crews and
progressively disappearing subsidies from the US
government.
-
[Rawson] That would mean that superannuation schemes
etc. would have to invest elsewhere, and that
elsewhere would have to be industry. And here we
agree with just about any political faith; the
wellbeing of the people depends on the real wealth
produced for their enjoyment and use. We are a Party
that believes in private enterprise, and also
cooperative enterprise.
-----
In regards to pensions, or 'superannuation' as I guess
you call them, I believe Douglas made the suggestion
once that the Bank of England be 'de-nationalised',
and its shares distributed to British citizens as "a
basis for pensions".
-
[Rawson] And we see nothing wrong whatever with
people investing in order to get a profit. The side
we object to is the banks investing at little real
cost to themselves, and taking first priority in any
returns. ("The volume of money is increased ... when
a bank purchases an asset ...") I.e. they create
money to invest.
-----
But on who's behalf? And what happens to 'prices'
when that volume of money is increased? You say
you're not going to have your government borrow any
more money from 'private banks'. So then you really
have only the choice of taxation or borrowing from
your Reserve Bank. Or a 'favourable' balance of
trade. But you've got to be pretty careful there, for
your trading partners will be on the lookout for
anything that looks like a 'subsidy' to producers.
And I doubt you're in the same favourable position BC
was once in in regards to our supplying things other
countries were lining up to buy.
What do you have other than 'taxation' to keep this
'new credit' from your Reserve Bank, which you're
going to use to build 'infrastructure', from raising
consumer prices? Or are you thinking like the current
crowd that governs BC seems to think, that a rise in
prices must mean 'prosperity'?
Regards,
Joe
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debt is simply a f
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