Clear Full Forecast

HST And The Crack In The Door

By Peter Ewart

Monday, April 19, 2010 03:44 AM

By Peter Ewart

 
The vast majority of people in British Columbia are opposed to the imposition of the Harmonized Sales Tax (HST). Even the most diehard government supporters would have a hard time disputing that. 
 
Why is there such strong opposition? Part of the reason is that many people feel that there are already too many taxes. And part of the reason is that people recognize that, essentially, the HST is transferring a tax burden from the economic elite onto the backs of the general population. 
 
But there is something else that is eating away at the credibility of the government in regards to the HST. And that is the method by which it was brought in. It is here that the government is weakest, its arguments most feeble and illogical.
 
Prior to and during the provincial election in May of 2009, the Campbell government made no bones about it – BC Liberals were steadfastly against the HST. And the Liberals won the election.
 
Just a couple of months later, BC voters woke up one day to hear this same Liberal government announce that, surprise, surprise, it would, indeed, be bringing in the dreaded HST. All of this was done in such a tawdry, slipshod way - arrogance breeds its own clumsy style – as if the government knew that it would, once again, get away with, not just breaking, but smashing to smithereens another election promise.
 
Just like it got away with the controversial sale of BC Rail after promising – again, before an election – that it wouldn’t sell the railway. But history has its own cunning. Like that hornet’s nest under the pile of lumber in the backyard, the BC Rail scandal won’t disappear no matter how much water is squirted on it. In early May, the trial of the political aides charged with breach of trust is scheduled to begin, and who knows which government leader or minister could get stung by a soggy, wayward hornet.
 
And so it goes with the HST. The initiative campaign to repeal the HST, launched by former premier Bill Vander Zalm, gathers more momentum every day and has an excellent chance of succeeding. People all over the province are flocking to sign the anti-HST petition. They don’t like the tax, but they also don’t like the way that it was brought in.
 
Indeed, the government’s “modus operandi” in imposing the tax is just one symptom of a much larger problem. People do not have control over the political process. Instead, the establishment political parties, in the service of a tiny but powerful economic elite, dominate it. 
 
To even call them “parties” is to give them too much justice, as they operate very much like corporate election machines, dominated, not even by their own membership, but by paid communication experts, “consultants”, “insiders” and “backroom boys”. Indeed, the membership passes resolutions at “conventions”, only to have the party brass flush them down the toilet after the convention is over. In the parliament and legislatures, these same establishment parties work together like cartels to keep the people in a passive position and out of the process, as well as to commandeer public funds to finance their election campaigns, research projects, junkets, and other pursuits.
 
It is a strange fact of modern life that such creatures, which resemble feudal monopolies in organization, dominate the political affairs of the province and the country at the expense of the people. In effect, it is democracy of the parties, by the parties, and for the parties. For the global multinationals and financiers it is most convenient – one stop shopping, so to speak. For the people, it is something of a different character – an elected dictatorship and voter serfdom.
 
Which brings us to the Recall and Initiative Act of British Columbia. The doors and walls that the establishment political parties have erected around the parliament and legislatures are made up of the thickest oak reinforced with steel plate. Back in 1991, because of pressure from smaller parties and from ordinary citizens, the political parties in the provincial legislature were forced to open up the door just a crack and have voters decide whether the province should adopt a Recall and Initiative Act. The response was overwhelming – over 80% of the voters said yes. 
 
Of course, no sooner was the legislation brought in than the government of that time, the NDP, proceeded to make it as difficult and unwieldy as possible for voters to utilize this new mechanism. Later, when the opposition Liberals came to power, they refused to reform or improve the legislation.
 
However, they couldn’t get rid of the Act without being exposed as anti-democratic. It is that tiny “crack” in the door that voters are flocking to in their opposition to the HST. 
 
But what a different world it would be if the whole door itself was blasted down, if people, not parties - and definitely not the economic elite - had control over the political process. What a difference there would be in political and economic priorities, in law, in health care, in forest policy, in taxation, and countless other spheres.
 
The establishment political parties and the economic elite do not want us to get even a glimpse of such a world, and thus they constantly try to reinforce the door and install more bars and locks on it, the better to keep the people out. But British Columbians are making it clear that they want to open the door up even wider. And therein lies the struggle ahead.
 
Peter Ewart is a writer and community activist based in Prince George, BC. He can be reached at: peter.ewart@shaw.ca
 

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Comments

Here here!!!!
I have to agree with Peter, the ways that the Government can manipulate the democratic system and encroach on the rights of individuals in the Country is beyond beleif.

We have four levels of Government, Federal, Provincial, Regional, and Municipal. All with taxing authority. You would think that, that wuld be enough, but no, then they set up various and sundry Government entities, such as BC Hydro, BC Ferries, BC Lottieries, BC Transit, ICBC, BCLC, BCTC, Airport Authorities, etc; etc; etc. Probably 25 or more Government entities. Some of the entities such as Airport Authoritys, and BC Transit, have the right to assess taxes in the form of user fees and gas taxes, such as Airport Authorities, and BC Transit.

Other entities such as Hydro, Ferries, ICBC, WCB, etc; go through a thinly disguised process that allows them to increase rates. Money from these entities over time is kited into the Government coffers.

The individual has very little or no chance to get by these entities and deal with the Government because of the proverbial run around. Ie; The Government has little of no say in car insurance because it is run by ICBC, and ICBC, has little control over the insurance business because it is controlled by Government policy.

This effectively keeps you on the outside looking in, and in most cases the only way you can try and deal with these people is through a 1-800 number and a series of button pushing processes, taped monologues, and elevator music, and that my freind describes in part the great democracy you enjoy.

Have a nice day.



I'm all for repealing the HST and calling the government out. I'm even for transparency of decisions and spending. I am NOT for the common man making being part of every single decision.

A good example of this is California. You should go look up what happened there over the last 20 years.

You can't get any laws in place without a referendum on everything. Election time down in California is a passionate time of debates and wild spending trying to sway the common votes one way or another.

And yet the people who can't agree on how to raise taxes (no one wants to pay more taxes) can all agree they want things electricity and power, when they can't pay for them.

Let's take a step back. Government, with elected officals are allowed to govern at the will of the people. We are SUPPOSED to vote for people who we TRUST. Funny how that word is rarely used in news, unless it's about a BROKEN TRUST.

Each and everyone of the voters who exercises his franchise right is voting for someone they believe will do their solemn duty to do not only what is right for their riding and constituants but, also to make hard decisions about many subjects so we aren't bogged down by YEARS of debate.

In the last few years, there have been very few politicians that have been doing their jobs properly.

In any case a recall of any politician is never a bad thing, because it sends a message that the people are watching them, and holding them responsible. After all, they work for us.

This is one man's opinion :)
Excellent post, jimmy.
Peter,

Thank you for your well thought out and expressed Op-Ed above. I look forward to reading what your regular detractors might have to say about this editorial, or will the SILENCE be DEAFENING...

Take the "K" out of deMOCKracy...

John
Robson Valley East
Volunteer Canvasser
Our system is called a Democratically Elected Dictatorship.
There is a big difference between honest effective Government and behind the scene manipulation.

I agree that the average Joe should not be involved in every decision made by Government, however lets not forget that we elect the Government and they work for us, ha, ha, ha, Thats the way its supposed to be , however that concept has been beat to hell in the past few years.

With all the fast paced electronic media, etc; we are inundated with information, and four levels of Government are going hell bent for election, spending our money.

The average person does not have a hope in hell of keeping track of everyting that is coming down on a regular basis, and therefore he is being used, and abused, on a spectacular level, and can only stumble around in a dazed state mumbling incoherently and trying to hang on to his wallet, while the nappily dressed Government workers, and politicians, in there expensive suits, and alligator shoes stock him on a regular basis with the intent of emptying his wallet.

Without an informed voter you do not have democracy even if people are exercising their right to vote. If a politician can lie at election time, and then not answer for it, then we do not have democracy.

Our concentrated and corporate controlled media is a gate keeper for a corrupt political process.

My solution would be to establish a investigative journalist fund paid for by government to ensure that the foundation of our democracy... knowledge... is enhanced so as to allow for an informed voter. Any system can and will be gamed... only an informed voter can short circuit the gaming of our democracy... our government has a responsibility to uphold the integrity of the system by ensuring we have investigative journalism that is responsive to the people.

How I would do this is rather then government funding political parties they should be funding journalists. Especially in the new era of internet that undermines the business model of the typical sources that fund investigative journalism.

The government could give the equivalent of $1 per newspaper monthly subscription, and $1 per 30 day average per 20 internet viewers. TV and radio could draw from the independent investigative journalism of the paper and internet providers. I would have the money forwarded to the media companies on the condition that 100% goes to the journalists with no admin fees charges or anything like that. The media companies benefit solely from the content and the advertising they can generate with the content.

The viewers could vote each month on the journalists they wish to hear more from and thus empower from the grass roots the journalists that are the most effective in addressing their concerns. Each media company would divide up the funds between journalists based on the percentage of viewers that support them.

We would have a separation from the corporate media and the content providers that would enable true journalistic freedom, as well as end the hijacking of media for the purpose of ideological propaganda control.

A media that is paid to investigate in the public interest with a fiduciary duty to the public and not their corporate paymasters is the only way we will ever have a chance at a real democracy IMO.

Palopu, it turns out we weren't thinking that far off on this one....
Then there is the special "tax on the poor" . The lottery / gambling opportunities.

all that money so they can build more freeways that people don't really need or want and certainly can't afford given the cuts to just about everything.
Freeways won't be obsolete any day soon!

People will still need them to go on vacation in their electric cars. Freeways are a safe way to travel and get to know our country and other countries, stopping where and when we want, not when the bus company or the train decides.

I like to go to lake to picnic, to visit friends and relatives and do my own thing.

I need and want freeways, the more the better!

Those who don't want them can take the bus.



I agree with Peter Ewart's view. He touched on a major problem, a common "enemy" as it were. It isn't necessarily a particular leader or party that is guilty of leading the public down the garden path. It is truly the puppeteers that we don't see that is causing havoc - GLOBALLY.
The way to fix this is for the average citizen to constantly apply pressure; not only to government policy but also corporate social responsibility. We also need to get our Federal Finance Minister to abide by our constitution that specifically says the Bank of Canada produces money for its citizens. We need our government to claw back the privelege it extended to the private banks to "create money", which is debt and keep our own resources.
The taxes collected today are paying the interest to the banks. Why are we allowing our government to borrow money from a private institution when our government has the authority and the duty to create and distribute OUR money?
Those of us who have done our homework need to educate others about what tax and money really is.
[url]http://www.youtube.com/watch?v=INfAWNLhjrY
[/url]
Commoner:-"We need our government to claw back the privelege it extended to the private banks to "create money", which is debt and keep our own resources.
The taxes collected today are paying the interest to the banks. Why are we allowing our government to borrow money from a private institution when our government has the authority and the duty to create and distribute OUR money?"
-----------------------------------------
All 'money' is "debt", Commoner. How could it be anything else? That's what it's been since the dawn of the first civilization that allowed for a difference in "time" in making exchanges through barter.

This put one party to a trade in 'debt' to the other, who had then extended 'credit' to him. With the 'money' being the symbol of that 'debt' ~ basically a contractual obligation until it was extinguished by the debtor honoring his part of the agreement between them. (Whereupon the 'money' became just about as worthless as a theatre ticket to you after you've seen the show.)

That is unchanged to this day, even though now the "debt" is more often to a Bank, which has "generalised" the 'credit' of the debtor, making it fungible in the community as a whole. And we use the 'tickets' over and over again, to the extent that legal tender money, "cash", is still used at all. Nowadays, the operations of all Banks are co-ordinated as to their "reserve" requirements through the Bank of Canada. Making the 'credit' issued by one 'acceptable' as 'money' at any other one.

I don't know about you, Commoner, but I much prefer to be able to approach 'another' Bank if I'm not happy with the service I get from the one I'm dealing with. If I couldn't negotiate a loan at one on terms and conditions that suit me, or at all, I'd like to be able to try somewhere else. Wouldn't you?

How can I do this if the private Banks' can no longer 'create credit', and the Bank of Canada is now the 'only show in town'? And, in Canada, under your proposal, then the absolute vice-regent of God on Earth so far as access to credit is concerned?

This is simply too much power to vest in ANY one institution, whether it's government-owned or not, or is even the Government itself.

In fact, I believe the Canadian banking system is far too 'centralised' as it is. And this has been a genuine detriment to this country's ability to foster the type of local entrepreneurship that exists south of the border.

Sadly, with the latest rash of Bank consolidations there, they seem to be following us ~ and with "big" Banks will come more emphasis on lending to "big" businesses, because they'll always be deemed more 'credit worthy' due to their greater ability to 'monopolise' markets.

I would much prefer to see a 'decentralisation' of banking in this country, rather than it being monopolised by the Bank of Canada.

As for the question you pose in your last sentence, the answers to that are complex and involved. First, though, you should realise that 'credit-issue' (the creation of "money" by any bank) is only the 'positive' aspect of something which also has a 'negative' side to it as well.

That 'negative' side is "price-making". For what is created as financial credit and becomes business, or government, COSTS as it's spent, will be taken back and cancelled through PRICES (or TAXES), as the 'production' of goods and services it has enabled moves through into final 'consumption'. Which is the object of the whole 'money-making' exercise ~ to facilitate the actual production, distribution and consumption of "real wealth".

It is true, of course, that the government does borrow from the private Banks "at interest" what the government could borrow from its "own" Bank, (the Bank of Canada) at little or no interest. But there are a number of reasons 'why' the government does not, to the extent that it once used to, do this anymore.

In the overall scope of what's really "wrong" with our money system, why taxes are so high, and incomes never seem to be able to keep up with prices, etc., it is really a non-issue.

The 'real' problem lies elsewhere ~ it's in the 'rate' that 'money' itself is created and cancelled in maintaining its proper nexus with its ability to always be able to fully liquidate "price-values" expressed in 'money'. It has nothing to do with "interest" being the CAUSE of anything.



socredible you missed the point entirely.
Governments create the money and circulate that money. That money used to be secured by gold. Now it is secured by other ASSETS.
In 1974, the government caved and let private banks print the money. The private banks don't secure the money they print. The government, who can print the money it needs for its economy, now BORROWS that amount from the bank with INTEREST and the bank creates/"secures" its printed money with imaginary accounting. Bank prints $1000. Bank loans this to government, corporation, business or individual with INTEREST (there is no other real money in circulation so how is this interest to be paid?) and then the bank says it has $2000 on its books.
Governments use income tax to help pay the interest on the loans from the BANK, instead of returning to just printing its own money as it did prior to 1974.

You can use all the economic double speak and spin all you want to. It doesn't change the fact that these rates and loans are totally UNNECESSARY when a government has the mandate to create its own money INTEREST FREE.

The rest of your analysis has been created by the banks themselves to keep the average joe confused. Money creation is simple not complicated.

Banksters would be obsolete if the people woke up to this fact, so of course they do not wish the people to know the truth. It's how the banking cartel elite are taking over the globe and its people. They are allowed to control the flow of money, and use massive debt as coercion against governments. Think of it like the game Monopoly plus the game Risk and using the game Chess as a means to facilitate their strategy.

If tomorrow the banks called in all loans, how much do you think the people actually will own? Next to nothing because at the top of the bank pyramid sits a gleeful elite handful who know darn well, they own oil, power resources, military, homes, vehicles, businesses, educational institutions...they are bankrupting nations step by step right under your very nose.
Commoner, I don't know where you've received your information from, but I
can assure you a great deal of it is erroneous. Not all, but most of it.

It sounds very much to me like some of the stuff that circulates on "crank" monetary reform websites on the
internet. Repleat with the "debt-virus hypothesis" ~ the old "10 can't pay 11, because the banker never created the 'interest' when he created the 'principal' fallacy.

The "government" of Canada has NOT 'created' any money since the inception of the Bank of Canada in 1934, other than the coins that the Royal Canadian Mint produces and sells to the Bank of Canada.

Prior to 1934, the 'government' of Canada issued "Dominion of Canada" Treasury Notes. Which were a 'debt obligation" of the Dominion of Canada to the bearer, just as the Bank of Canada bank notes that supplanted them are a 'debt obligation' of the Bank of Canada to that bearer.

Along with Dominion of Canada Treasury Notes, the chartered Banks also issued their own "Bank Notes", and did so up until around 1947 or so, I believe,
when note issue was centralised into the Bank of Canada.

No modern country's
money has ever been fully backed by gold, even in the days of the gold standard. Nor could it ever be. That would be as impossible as saying the Banks could only lend out what someone else had deposited with them. Full reserve banking, another fallacy.

Banks create 'credit', Commoner, that's what they do. They do NOT lend their customer deposits, as those deposits are their LIABILITIES.

When a Bank lends you 'money' it is exchanging your personal 'creditary instrument' ~ your Promissory Note, a 'promise to pay', and therefore a contractual agreement ~ for a deposit up to the face value of that note which the Banker credits to your account with him.

Your Note is his ASSET, (and your LIABILITY);
the deposit he has created for you, is
his LIABILITY, (and your ASSET).

He is 'generalising' your 'credit', by creating a deposit for you which is now the Bank's LIABILITY to any third parties with whom you will transact using the Bank's 'creditary' instruments. Cheques, drafts, debit cards, even Bank of Canada
banknotes, if you so wish.

The Bank cannot refuse payment of any sums you order paid from this account to those third parties
so long as there is a sufficient balance in it to cover those payments. Even if you subsequently default on the repayment of the loan to the Bank. It's recourse is with you, not with them.

Prior to World War One, Treasury notes and chartered Bank banknotes exchanged at face value with gold coins. A twenty dollar note could be exhanged for a twenty dollar gold coin, one to one.

However, there was only a fraction of gold coins and bullion covering a much larger overall note issue. This was revealed quite poignantly in Britain when War was declared in 1914 and thousands of Britons raced to cash in their paper pound notes
for gold sovereigns,
believing by so doing they'd be safeguarding their wealth.

The British banks were technically bankrupt in two days. There wasn't a tenth of the paper issue covered by gold.
They were ordered to close by the government while it tried to figure out what to do. When they re-opened, and a customer presented a paper note promising "will pay to the bearer on demand" on its face, and demanding payment, he got another paper note.

And the paper note (called 'Bradbury's', after Lord Bradbury who devised them, and only printed on one side due to their hurry to get them out), served exactly the same function that gold, or gold coins would have. "Efective demand" for goods and services offered by any willing seller who would accept them.

What you are missing, Commoner, is that the money system, any money system, is "Creditary". Loans create deposits, the repayment of those loans 'destroys' those deposits. It is an "accounting-demand" system. A 'ticket' system, to the extent that 'cash'is still used, and just 'bookkeeping' for the other 97% of 'money' transactions.

In FACT, Commoner, any
Bank creates money whenever it lends,or spends, for any purpose. Most government borrowing involves the sale of securities ~
government bonds, T-bills , etc. to the Banks, which create the money to purchase them ("out of nothing",
as the saying goes, because the money they are creating is in the nature of a 'contractual obligation'. And the 'terms' of that 'contract' didn't exist before the two parties to the transaction created them.)

The sale of securities to the Banks increases the money supply; the sale of those securities by the Banks reduces it.

The Bank of Canada, unlike the chartered Banks, has an unlimited chequing account with itself. The chartered Banks are bound by their need for "reserves", deposits brought into them that have been created by other Banks, or the Bank of Canada, that they need to settle their cheque clearing transactions with one another.

The Bank of Canada's "reserves" are its holdings of other country's currencies, particularly American dollars, which represent a demand for 'international credit' many times that amount.

While it has, in the past, and could again, purchase all the securities issued by the "government" it does not ordinarally do so.

One of the reasons why it does not has to do with maintaining the 'credit' of this country in international markets, with other countries whose central Banks hold Canadian dollars in their foreign exchange reserves. And the 'purchasing power' of our dollar at home.

Canadian dollars are only 'good' for what they will BUY in Canadian goods and services and securities. If the Bank of Canada were subject to the commands of the politician, to create money everytime some pet project he wants
to be undertaken, to provide "jobs" and, more importantly, "get votes", it would soon create more money than there were goods and services available "for sale" at that same
time, and the 'purchasing power' of every Canadian dollar would decline.

The only way then that we could get foreign central Banks to hold our currency would be to pay THEM an exhorbitant interest rate on it. Additionally, such a move would adversely impact the interest rate on ALL private loans in Canada. Any 'saving' in interest charges to the government, and through it, the long-suffering taxpayer, would more than be offset by increased interest charges, (or a severe limitiation of credit) to all other borrowers.

The solution to the problem does NOT hinge on "interest", or the private creation of credit by the Banks. It involves maintaining a correct nexus between the rate that bank credit is issued and cancelled and 'production' and 'consumption' occur.
Commoner:-"Bank prints $1000. Bank loans this to government, corporation, business or individual with INTEREST (there is no other real money in circulation so how is this interest to be paid?) and then the bank says it has $2000 on its books."
-----------------------------------------
The chartered Banks do not "print"
$ 1,000, or any other other amount of 'money' when they make a loan. The Banker, at the conclusion of your loan negotiations with him, after you have signed the Promissory Note he has prepared for you that sets out the 'terms' of the loan, utters those immortal words, "Mr, Commoner, the 'money' is in your account."

If you didn't have an account before, you do now. And it is from that 'account', if you want $ 1,000 in 'cash' that you will then withdraw it. Loans create deposits, the repayment of those loans cancels them. The system is "creditary" ~ 'credit' itself being "a BELIEF in the beneficial outcome of some line of action."

It always seems to be a mystery to many people as to how the interest is paid, since if the Bank is the only source of 'money' (or 'credit', of a form in which it can be paid), and the Banker only created the 'principal' when he made the loan this seems impossible.

Often, various 'monetary reformers' will claim that it is the "interest" that increases the debt, and keeps the borrower in constant bondage to the Banker, since he can never pay off what he owes without continually borrowing MORE than he originally borrowed. Which he can then never repay unless still MORE again is borrowed, and so on. This is erroneous on several counts. Lets look at but one.

First of all, no Banker only makes 'one' loan. He makes many loans, and their maturities and repayment dates overlap. Consider a simple example using only two recurring loans, both for $ 1,000 and bearing interest at ten percent, repayable in two half yearly payments, but at different dates. We'll say these loans,
$ 2,000 in total is the only money in existence, and at the end of one year $2, 200 must be repaid.

Loan A is written on Jan.2, for $1,000 repayable in two instalments, $ 550 on July 2. and another $ 550 the following Jan. 2. For a total of $ 1,100 repaid for $ 1,000 borrowed.

Loan B is written on Feb. 2, same terms, only repayable on Aug. 2, and the following Feb. 2.

On July 2. $ 550 is due and there is a total of $ 2,000 in existence from which to repay it. After the payment is made there is still $1,450 in existence, more than enough to meet Aug. 2nd's $ 550 payment, AND Loan A's next payment of
$ 550, too. It's final payment. At which time borrower A, a 'producer' involved in the continuity of some 'production' renews the loan for another year on the same terms.

On Feb. 2nd Loan B's final payment is due, $ 550, and there is at that date $ 1, 350 in existence to pay it off, whereupon it, too, will be renewed. And this process can continue ad infinitum without adding one dollar to the amount of debt that is owed through interest that was never created.

That is but one example. There are many, many more. "Interest", on any loan that is being serviced, is NOT the problem. And loans that are not being serviced are NOT in that state because of "interest".