Dear Editor:
Re: Fraudulent finances control world debt, Letter to the Editor, April 3rd Pioneer Dollar in, dollar out thats the way it works. If your dollar out obligations are more than your dollar in, then you have a problem. This problem can be addressed either by not paying your bills or by borrowing money. The situation is the same whether you are an individual, an organization or government. What is money?
Money is simply the mechanism by which we exchange goods, assets and services. It is not, Mr. Stawychny, an international conspiracy. The theory of our free enterprise system is that the cost of the goods, assets and labour into making a product or providing a service matches the market price. If the market price exceeds that, it is called a profit. If the proposed price exceeds the input cost, the organization becomes insolvent and does not survive. Into this equation enters borrowing money. The asset value of borrowing is time. For an individual, this may mean a car or a mortgage, which can be justified because the need is now and the prospect of expected future revenue will balance it out. For a business, there are initial capital asset costs, which can take time and future revenue to pay off. For government, there is a difference and borrowing is not exactly the same.
The federal government of Canada and many provinces acquire debt because the revenue outflow exceeds the revenue inflow.If you consistently run year-to-year deficits of several hundred million or several billion dollars then, over the years, you accumulate hundreds of millions or multi-billions of dollars of debt. This is not borrowing for the future; this is fiscal mis-management and dumping the bill on future generations. The money owed by the federal governments consists of treasury bills, promissory notes and Canada Savings bonds. This is not a conspiracy of privately owned central banks. Would you have us default on these?
Truly, Mr. Stawychny, our financial system has major flaws. There is too much money being generated by artificial means with no intrinsic value. Much of this had to do with Wall Street, etc. exchanging artificial financial paper within organizations and compatriots. It has been exposed in the book The Big Short. Perhaps one of the weaknessesis derivatives,which place bets on gambling to win or lose rather than investing in corporations doing a needed job.
Hey, the system is not perfect, but blaming it on some international conspiracy does not allow for correction of the specific flaws that need to be addressed.
Walter Benstead
Panorama
