Leaders, stop squabbling and fix health care
Re: Even a pandemic won’t get Ottawa and the premiers to agree on health-care funding,
Susan Delacourt, Dec. 9, 2020
The Bank of Canada is federally-legislated and government-owned, and will always ensure immediate access to any amount of public funding when the finance minister requires it. The vital issue is not money but whether needed resources can be purchased in the real world. For example, are there sufficient masks, ventilators and doctors available?
The Covid-19 outbreak has devastated the economy and peoples lives, but let us hope for one positive change - the end of a false, penny-pinching "fiscal responsibility" that "prudently" capped provincial health care transfers, delayed vaccinology research, and left us with a fragile health care system, ill-equipped to confront a viral pandemic that experts had long predicted.
Instead of a time-wasting squabble over funds, politicians should get cracking and rebuild Medicare to be not only efficient but truly comprehensive and robust.
1. Alan Greenspan, former U.S. Federal Reserve Chairman
"Central banks can issue currency, a non-interest-bearing claim on the government, effectively without limit.
2. William Mitchell is Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), University of Newcastle, NSW, Australia
"In a fiat monetary system where the national government issues its own currency and floats it on international markets:
A sovereign government is not revenue-constrained which means that fiscal space cannot be defined in financial terms.
The capacity of the sovereign government to mobilise resources depends only on the real resources available to the nation.
A currency-issuing government can always meet the liabilities it issues in its own currency."
3. The Great Canadian QE Myth – Part 2
“Prudential Liquidity Management Plan” (PLMP)
This plan, enacted largely in response to the 2008 financial crisis, called for an emergency fund to the tune of approximately $20 billion to be held at the Bank of Canada on behalf of the Federal Government.
....instead of going straight to the debt market or tax base to fund their $20 billion contingency fund, the Federal Government instead turned to the BoC to monetize new bond issuances. The BoC subsequently purchased approximately $20 billion in new government bonds between 2011 and 2013 and credited the Federal Government’s account at the BoC with this newly-created money.
4. Standing Committee on Banking and Commerce, Minutes of Proceedings and Evidence Respecting the Bank of Canada, 1939.
Some of the most frank evidence on banking practices was given by Graham F. Towers, Governor of the Central Bank of Canada (from 1934 to 1955), before the Canadian Government's Committee on Banking and Commerce, in 1939.
Question: So far as war is concerned, to defend the integrity of the nation, there will be no difficulty in raising the means of financing, whatever those requirements may be?
Mr. Towers: The limit of the possibilities depends on men and materials.
Question: Would you admit that anything physically possible and desirable, can be made financially possible?
Mr. Towers: Certainly. (p. 771)
5. Explainer: what is modern monetary theory?
".. core statements at the heart of modern monetary theory.
1) Monetary sovereign governments face no purely financial budget constraints.
2) All economies, and all governments, face real and ecological limits relating to what can be produced and consumed.
Politicians are, according to modern monetary theorists, currently obsessed with something which doesn’t matter (balancing their budget), and are ignoring many things which do matter......"
6. What does the COVID-19 endgame look like? Five simple steps
"You can buy a coronavirus vaccine for your dog, but not for humans.... Not only is that a great shame, but a testament to short-sightedness because governments lost interest in funding human coronavirus vaccinology after beating the 2003 SARS pandemic—or else a SARS-CoV-2 vaccine probably would be within reach.
(Canada is guiltier of that than any other country, having pledged an initiative for a human vaccine, but so stingily that the clinical trials never began, which is also what it did for the Ebola vaccine.)"
Modern Monetary Theory in Canada