Editor, The Times:
Re: Feds monitoring weak economy, could take action as early as fall: Morneau, The Canadian Press,Sept. 26, 2016.
Our Bank of Canada does not have vaults filled with electronic cash.
As remarkable as it may seem, the Bank (owned 100 per cent by the federal government) simply creates money whenever needed by a computer entry.
It follows the federal government can never run out of Canadian dollars. This explains how immediately after the 2008 financial crisis the Stephen Harper Conservative government without raising taxes was able to bail out big institutional lenders by replenishing their coffers through a $200 billion “Extraordinary Financing Framework.”
The federal government can either spend too much causing inflation, or spend too little allowing mass unemployment. Since there are currently 1.3 million Canadians looking for work, it is clear the federal government is nowhere near spending enough.
Increased infrastructure renewal should be supplemented by creation of community-level jobs so all skill levels can be put back to work as soon as possible.
As John Maynard Keynes once noted, “Look after the unemployment, and the budget will look after itself.”