They're Building a Box -
and you're in it
pull back the wizard's curtain and throw the chains from your brain
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On Green Island
They're Building a Box and you're in it
by
Dave Patterson
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From Hastings to Green Island
a word on the Writer




(earlier versions June 2003. or 2. or something. revised again a bit Sept/07)

Appendix 1: The Great Canadian National Debt Scam

I know the economics of a national government, and the national debt, seem like vastly complicated things that probably only trained economists and people like that really understand. And that is pretty much what they want you to believe. Because if you understood how you'd been scammed for the last 30-odd years, you just might get a little upset. Maybe even very upset, once you started understanding all the ramifications of the scam. And since there's a LOT more of us than there are of them, they could find themselves in trouble, armed-to-the-teeth Darthvader cops or no. People who consider themselves omnipotent emperors don't much like the idea of spending the rest of their lives in a max security, no frills penitentiary, which would undoubtedly be the result of any court case overseen by We the People which examined this scam and judged the punishment of those who did it.

Let's have a quick look at this 'national debt' thing - maybe it's not quite so complicated we can't get a solid sort of overview of it all - and why I am calling it a scam.

Currently (2007) this Canadian National Debt is around 500 Billion dollars - lots of bucks. It hit that level over 20 years ago, during the Mulroney days, and we have been paying 'interest' on that debt at varying rates since - all in all, since the scam began during the middle 1970s (yes, that's Trudeau days - there don't appear to be any 'good guys' in this story), we've paid around one Trillion (no misprint - that's a T - Trillion) dollars in interest (and I'm only dealing with the 'national debt' here - add in the provincial and major municipal debts, and these figures would be close to doubled, I expect, maybe more). Lots and lots and LOTS of bucks that were NOT (have this in your mind) spent on health care (national Pharmacare program anyone?) or education (noticed skyrocketing tuition fees at universities the last few years?) or daycare, or infrastructure (heard about the decaying school buildings and city transportation systems lately, or bridges falling down?) or better old age security for those without private pensions - etc and etc. A Trillion dollars would have gone a loooong way with all of those things, and much, much more. But instead, our government, through deliberate policy decisions, chose to incur some serious debt and pay your tax dollars in 'service' charges to people wealthy enough to be loaning the government money (think major tax cuts, year after year, for 'investors' during the same period of time, and things start getting even smellier - why is the gov cutting taxes of the wealthiest taxpayers when it is short of money?!?). And it was doing this borrowing when it had a ready option that it had previously used when facing the small shortfalls any government will sometimes face - using our government-owned Bank of Canada to create the relatively small amount of money that was needed over a few years, approximately $100 billion (that 'small amount' morphed into a 600 billion dollar debt at its maximum through some very shady and questionable interest rate hikes into usury territory in the early 1980s, coupled with the magic of compound interest - OUR Bank of Canada, which sets the interest rates, instead of helping us, sticking it to us....).

Of this 1.6 Trillion dollars current debt plus interest already paid, only (a maximum of) 100 Billion, that small shortfall over a few years noted previously, was ever spent on actual programs of the Canadian government for We the People - all of the rest - around 1.5 Trillion - was/is interest and compounded interest on both the original borrowings and further money borrowed to pay interest etc. Think about that for a minute now - of the 500 billion currently still owing, and the one Trillion or so already paid in interest, from your tax dollars, only around 100 billion was ever used for programs. Kind of like a mafia movie - borrow a bit, and pay and pay and pay and pay forever, and at the end of all your paying owe more than when you started! But why would the Canadian government be behaving like a cheap loser gambler hot for money for his next hot tip, and going to the nearest loan shark???? - especially when it had its own printing press just waiting????

The Canadian government chose to borrow that original 100 billion, over a period of several years back in the 1970s and early 1980s when it faced some relatively small budgetary deficits, from commercial sources - that is, direct borrowing from banks, or through issuing longer term debt instruments, usually government bonds or treasury notes. Instead of using such commercial sources, the government could have instructed the Bank of Canada to either print new 'cash' money to be used by the government, or simply credit the government accounts on which it writes cheques to all kinds of people - the Bank of Canada could have done this at either no interest or nominal interest, if the money was to be considered a loan, or simply issue it free-gratis - as in, "We are the government, we have ultimate control over the money supply in Canada, the money supply needs to increase a certain amount every year to keep up with the growing population and new business and the growing economy, and we choose to increase it by crediting the government accounts with that much money, which we will then inject into the economy through our payments to suppliers of government services, or the salaries we pay to our employees, or the monies we issue the provinces for health and education transfers, etc."

- don't throw your hands up shuddering government printing money oooooooo bogeyman!!!! Inflation!!! Bad!!!! just yet - that's part of the scam. Read on.

Important, undeniable fact: If the government had chosen to issue the money to itself rather than borrowing it - we would NOT have subsequently paid private 'investors' over one Trillion dollars in interest on the resulting debt over the last 25+ years. The huge outcry during the last 20 years (beginning with Mulroney and Wilson's 'Ball and Chain around our poor wee babies' necks unto the Xth generation!' story, then carrying on with a vengeance through Chretien and Martin's budgets of their first few years in which they out-Mulroneyed Mulroney, much to his surprise) about the huge debt requiring us to cut back ('slash') our social spending, etc, would never have been necessary - and we would not still have that 500 billion dollar debt on the government accounts, for which we still pay something like 30-40 billion dollars yearly in 'service' charges (anyone from a farm background will understand the exquisite irony of that term, in light of this exposition of the debt myth - we are all, indeed, getting royally 'serviced'), off the top, of your tax dollars.

Fact 6: The standard bank-government 'economist' story about the above facts is that for governments or their central banks to 'print money' causes great inflation and instability in the national finances (remember Germany or some place in the 1920s carrying around wheelbarrows full of money to buy a loaf of bread?!? horrors!! That's what happens to governments 'printing scads of money' by golly you stupid peasants!! (for a somewhat more detailed examination of what nonsense this is - actually more of a lie - check out Germany's 1923 Hyperinflation - a 'private' affair by Stephen Arlenga; you can read more of this stuff at the American Monetary Institute - poor selection of title, sounds WAY too mainstream, but is not at all) - but the point being that the Germany situation of that time was a completely different situation, in every way, than the Canadian situation of the 1970s, but they don't get into that part of it, just the scary part...), and thus is very irresponsible of any government and must not even be considered - end of discussion.

They do not, for some reason, carry on to explain how following a policy that resulted in our current situation - the ultimately 600 Billion dollar debt, still drawing 30-40 billion per year in interest, after paying out already over one Trillion in interest - was 'responsible' behavior, compared to the alternative of a government issuing, through the Bank of Canada, in a responsible way in line with maintaining the money supply through necessary increases, say 100 billion over several years, resulting in NO debt currently on the books, NO 30-40 billion per year in current interest, and NO trillion dollars in interest having being already paid. (Nor, one might note, do they get into the explanation of how the so very 'responsible' banks to whom we have de-facto given the rather important responsibility of issuing the nation's money supply so badly mismanaged their own wildly mismanaged speculative endeavors haha excuse me!! 'investments' during the early 1980s and then again the early 1990s that they required massive, pretty secret bailouts from the Canadian government to survive - for which their 'punishment' by the Canadian government was to further remove any requirements they had previously had concerning the maintenance of reserves, and to increase the government borrowing to help them out, amounting to a de facto 'entitlement' for the banks of another 10-20 billion per year, on TOP of the usurious 'interest' we pay on the 'debt' - bet you haven't read much about that in the Canadian corporate media either, as they demand more bank mergers and deregulation, etc and etc - but all stories for another day - and covered in much more detail in COMER - the Committee for Monetary and Economic Reform - some very interesting reading here).

It is with good reason, actually, I think, they do not try to say this - even they could not do so with a straight face - even your average Canadian, who is, apparently, rather deliberately NOT educated in high finance or government finances or even basic ('real') economics during 12 years or so of compulsory schooling, would see the absurdity of this fairly readily - and, their knowledge of basic arithmetic still functioning, likely start putting two and two together and seeing some very interesting results. Which is also why it CANNOT be allowed in newspapers - this is THE Big Lie of the times, and must never be challenged.

When put in straightforward terms like this, it is pretty difficult to arrive at any other conclusion than that we have been scammed, big time, by the very people we have trusted to oversee our national economy, for quite some time now. The only other even remotely possible conclusion is that some people in high places made some rather poor decisions, and now we must all pay the price - but to believe that is to believe that the best and brightest minds in the highest circles of the government and banks, over many years, were actually not very bright, and could not see the consequences of some rather irresponsible actions. Like putting a gun to someoneís head, pulling the trigger - and then pretending to be shocked when the person falls over dead. Possible - but not very likely. In any (responsible) court of law, the stories of the defendants are listened to - but not automatically believed. They must be judged against a preponderence of belief and evidence, among other things (consider the gun story) - and that the highest economists and government officials, many of them trained bankers with decades of experience, would be unaware of the consequences of repeated borrowing over a period of time, as compared to the consequences of simply crediting a government bank account with a relatively small, controlled amount of money, is simply not believable. It is, however, quite believable that they knew very well what they were doing, and borrowed as they did for the very reason of creating this huge debt, which could then be used for very political purposes - while incidentally being used for very pecuniary purposes as well - a trillion bucks, and several tens of billions per year, is not chicken feed, even to these guys. The story of 'runaway inflation through unrestricted printing of money' is equally unbelievable when considered in a wider context - what they do not choose (or outright refuse) to acknowledge is that, concerning such things as government finances in a modern democracy such as Canada, responsible decisions are made {or should be) by intelligent, trained and responsible people, who are well aware that the money supply must increase each year, and that a limited, controlled addition to this money supply, through government creation of money, simply helps meet this demand and, thus, is in no way inflationary. Equally, to embark on a course of borrowing, year after year, from commercial lenders at commercial rates, has definite and known repercussions - increased debt, obviously, and increased percentages of income going to interest payments - that such trained economists had to have been equally well aware of. It was, I believe, Thomas Edison who said something like "The same conditions which make it possible for a government to borrow a billion dollars make it equally possible for the government to simply print the same amount of money..." - and it is still true today.

As a final twist of the screw in this most unsavory episode of our history, the salt in the wound, we must recall those very same economists and politicians, beginning in the Mulroney years, having the gall to point their scabrous banker's fingers at the Canadian people, and blame US for THEIR perfidy. "Greedy darn Canadians!" they screamed from the Blob and other newspapers, and from Frizzy Institute 'analyses', "Living beyond your means!!! Now you must pay the price! And we will extract the souls from your children as well, ever unto as many generations as we can get away with!!!". It really does make you want to smack someone. It does me, anyway. [[CSIS listening in: "Oooo!!! That there's terraist talk if I ever heard it! Darn terraists! Get a warrant!!"]]]

One should stress again that such a course of action as described above - borrowing, debt, interest payments, reduced national (government) disposable income - rather handily (coincidentally?) fell into the 'neocon philosophy' emanating from the US (and followed by the governments of Canada and Britain, among others) as part of the so-called 'Washington Consensus' beginning in the 1970s of reducing government's role in the life and regulation of multinational corporations by reducing expenditures that benefitted ordinary people, deregulation, privatisation, slashing taxes, etc, that we have witnessed in spades for the last 20 years here in Canada, beginning with the traitorous Mulroney regime. But as that does get dreadfully close to a 'conspiracy theory' of some sort, I shall just leave the statement open, without further comment, as a story, perhaps, for another day - another day during which we might also talk about the corporate tax revolt of the early 1970s which was instrumental in reducing government income, which led to the need for borrowing in the first place - and also gave certain well-heeled 'investors' more after-tax income they needed to do something with - and loaned back to the government!! Or perhaps you might do some sums yourself, and see what sorts of 'Hmmm - isn't that interesting!...' sorts of doors start to open for you. As Morpheus said - (paraphrasing) "Choose the red pill or the blue pill, Neo - but if you open your mind, you can never close it again."

- another point probably worth thinking about concerning this 'debt' is the application of the internationally recognized concept of 'Odious Debt' to it all -

The doctrine of odious debts: "...If a despotic power incurs a debt not for the needs or in the interest of the State, but to strengthen its despotic regime, to repress the population that fights against it, etc., this debt is odious for the population of all the State.... This debt is not an obligation for the nation; it is a regime's debt, a personal debt of the power that has incurred it, consequently it falls with the fall of this power."

- from MY perspective, this applies pretty well to the Canadian so-called "national debt" - it was NOT a necessary debt, when the Bank of Canada had been historically used to provide most of the necessary money when the government faced a shortfall - and, with the possible exception of the one hundred or so billion, the great bulk of the money that has been collected to "service" the debt has, rather obviously, NOT been used for the service of the Canadian people. The debt was incurred, and whether or not one can prove it was done intentionally, it has been used as a weapon against the people of Canada, used as an excuse to roll back generations of advancement in terms of providing safe and secure lives for Canadians, on the excuse of turning literally hundreds of billions of dollars over to those 'investors' holding the debt ....

- given that the Canadian people received benefits of something less than 100 Billion dollars, or something around 6%, of the 1.6 Trillion, with the rest going (and going and going and going and going) to wealthy investors of various sorts in 'service charges', quite a good argument could be made that the entire debt should be just plain cancelled, written off as such an Odious Debt. Consider a situation closer to home - if a man, shall we say, agreed with a banker that he would borrow a lot of money, and then his children would pay it back with copious amounts of interest over their entire lives, maybe even their children too - why, no court in the country would dare try to enforce that repayment on the children - so why should it change with the government? A very strong case can be made that certain 'lenders', in collusion with certain government officials, took a calculated risk in imposing this odious debt regime on Canadian taxpayers - now that the scam has been exposed, they must pay the price (and, quite frankly, go quietly and thankfully they aren't hauled before a criminal court for massive fraud, and required to pay back that 1.5 trillion they stole, which they sure as hell would be if I had anything to say about it). Or maybe something happened during one of the years I was sleeping - did we have a vote on whether or not we approved of the government policy of wildly and irresponsibly accruing this huge debt rather than getting the Bank of Canada to provide the money, the original one hundred billion or so over a few years, a much more responsible action?

(By the way - Donít wonder why you haven't heard this on the evening news, or read it in the National Post or Sun papers, or any of the rest of the Canadian corporate media for that matter - the people who own these papers also hold a considerable amount of the (financial) paper under discussion, and are also sitting around the boardroom tables where the real decisions are made about what is going to be done in Canada - it is rather not in their interest to promote any discussion of this issue - and as we well know, they pretty much confine things in their papers to things they want to talk about, or want YOU to talk about (read any stories about how we need more tax cuts lately, or privatisation, or American-style 'health care'?). This is not one of them......)

Well (I hear you say...) this 'odious debt' stuff is a pretty serious charge, and not provable - we do sort of trust our politicians, you know - well, maybe not 100% - but this is really beyond the pale!! - 20-plus years of politicians scamming us like this!! - too much!! - but - well, consider, first - during the years this was happening it was kept pretty quiet, not in the news at all, and probably most of them didn't/don't really understand this any more than average citizens did - few politicians have economics training, and weren't/aren't aware of the scam; not to mention most politicians (current ones, anyway) seem much more concerned with how they can use (and abuse) the system for their own gain rather than actually making it work for everyone (viewed through the lens of the results of their activities, such as their gold-plated 'benefits' packages etc, rather than their noble words), so exploring things like the debt would not be of much use to them - especially if such questioning results in a few phone calls from certain funders to back the f___ off if you want to keep this nice job. And then when the trolls made their move, AFTER the 1984 election (again, nothing at all about this in that election, sort of like there was nothing about Mulroney's great 'free trade' ideas) - well, the average joe MPs were probably steamrollered like most of us with the huge propaganda campaign that was put into place around this 'debt' - it is a fact that backbenchers do not have access to the inner offices of government. But consider also - what have the politicians been doing with our tax money, and the money from the debt they accrued - what have they given to Canadian citizens? - decreased funding for every social program for We the People - the great Paul Martin bragged about taking social spending back to 1950 levels!!!! For themselves? - very high salaries with regular raises, gold-plated pension plans, junkets for every one of them all over the world - while they gut the UI program, welfare programs, and such like (WE cut back!! - THEY get regular raises and great pensions! - as a reward for their mismanagement, I guess). Of course, the 'investors' holding the 'debt' rake in 30-40 billion per year right off the top. The politicians and banks MIGHT have a small argument about this not being an odious debt - if they weren't so obviously benefiting so greatly from what they have wrought, while watching the rest of us face depletions in everything those tax dollars are SUPPOSED to be paying for.

- believe me, I always used to feel our government and system was pretty good, at least until Mulroney took over and began the blatant drive to turn Canada into an official American puppet - but this debt thing bothered me when I finally took the time to figure it out, for me it was sort of the final step, having to acknowledge that this country was no more a democracy than I am John Lennon. I wrote letters to my MP, the Bank of Canada, the Finance Department, business writers on newspapers, asking if they could briefly point out what I was missing or overlooking that made the debt some kind of really necessary thing or something, why my take on it was somehow wrong from the get go - and nobody answered (I have quite a history of unanswered letters). If this was am obvious tinhat question like 'My friends have told me Elvis is alive, and living on the moon, which is actually made of green cheese so he has lots to eat - can you explain to me whether or not this is true, because my friends never lied before...', I could understand not taking the time to answer - my parents or someone who is looking after me should be expected to deal with this stuff before letting me out on my own. But like it or not, the debt question is a pretty serious accusation, with a very strong 'common sense' and prima facie case to be made for criminal collusion and fraud at the highest levels of the Canadian government and banking-investor-corporate community, not an 'Elvis is alive' question in any way - and the failure to answer only lends more credibility to the truth of the accusation - when you got the crook red-handed, about the last thing he wants is a conversation about it all. Ask George Bush about the 911 investigation.

Well, enough - all the talk in the world isn't going to change your mind if you're one of the 'I got my head WAY down deep up someone else's ass hahaha excuuuuse me! in the sand, and I ain't hearing NOTHING I don't like! Where's the tv remote?' gang, then there's no hope for you anyway - but if you're one of the many out there who are asking questions about things that are starting to seem a bit suspicious around here - well, you can dig around and find what you like using some of the stuff above, or taking any other tack you like - it's all out there if you look, and if you start thinking for yourself rather than following instructions from the tv about what to think etc. There's some more good reading on creating a debt-free money supply at Prosperity UK, and you could look up on the same page a book called The Grip of Death by a guy called Michael Rowbotham - but the bottom line is, it's up to you. Let the crooks keep their hand in your pocket - or get up on your feet and say ENOUGH!!!

And ONLY when ENOUGH of us, or actually, since I did it long ago, you folks do that, will it stop.

And that will be a big step on the way for you folks to wake up some day in the bright sunlight and freedom of Green Island.




On Green Island

Ch 1: As good as it gets, or ...??? / Ch 2: The Money Supply Scam / Ch 3: The Work Scam / Ch 4: The Democracy Scam / Ch 5: How do they do this? Indoctrination / Ch 6: Indoctrination II: Get them early.. / Ch 7: Lifelong Maintenance - Full Spectrum Propaganda / Ch 8: They're Building a Box - / Ch 9: Why should I care? / Ch 10: What can I do? / Appendix 1: The National Debt Scam / Appendix 2: The Corporate Reactionary Revolution of the 70s / Appendix 3: Behind the Mask - What Capitalism Really Is / Appendix 4: Some places to start reading / Appendix 5: Perverse capitalist lies


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