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Do not conform any longer to the pattern of this world, but be transformed by the renewing of your mind... Romans 12:2

The Highwayman's Dream

by Ken Cannon

If the common Canadian ran his household budget like the federal government runs the Canadian budget, the bank would foreclose on him. Boys with base-ball bats would be knocking on the door demanding repayment. What household can consistently spend more money than dad and mom earn? How can our civil governments continue to run deficit budgets with apparent impunity?

The Bible says that "the borrower becomes the lender's slave" (Prov. 22:7); Canadians cannot borrow and live beyond their means without enslaving themselves. As a nation we are in effect running to every creditor available, begging them to tie a leash on us. It has been some nineteen years since we have had a balanced federal budget.

Since 1974 we have been living beyond our means on both borrowed and stolen money. The borrowed money consists of T-bills and bond issues, which are simply IOU's printed up by the Canadian Government. When these IOU's come due they are paid off by new issues of IOU's. This is similar to a person paying off their Visa with their Mastercard. Will creditors ever stop buying new Canadian bond issues? This is a serious question.

The stolen money with which Canadians have lived high on the hog comes from an increase in the supply of money and credit. The bank of Canada creates this money out of—poof—nothing! There is no gold or other precious commodity backing our loonies.

The big advantage of these newly created funds goes to those who first receive them—namely the civil government and its "clients." The government gets to spend the new money before it has depreciated in value. As the money circulates in the marketplace, its value falls—since there are now more dollars "bidding" for the same amount of goods and services. This is commonly called inflation.

Why is this theft? Because the real value of everyone's Canadian dollar is decreased without ever having left their jeans! This type of robbery is a highwayman's dream. The civil government need not tax you nor forcibly remove any money from your person yet robbery has occurred. Almost effortlessly the real value of your dollars is decreased while the amount of wealth controlled by the government is increased. You've been robbed and you didn't even know it!

An increase in the money and credit supply results in price inflation. This is what many governments have vowed to eliminate, but without success...or have they really tried? The central bank (which is controlled by the federal government) creates money. Therefore the civil government is responsible for inflation, and the war on inflation is a red herring designed to mask the real issue; theft and control.

Government inflation has caused the purchasing power of the Canadian dollar decline for many years. This means that when long term debts or bond issues are repaid, the real value of the money has decreased to the benefit of the debtor and the detriment of the lender. Of course the biggest debtor around is -- you guessed it -- the federal government.

The Canadian government seems to get away with running deficits and inflating the money supply. However, God's law says "You shall not steal," and this law cannot be violated without penalty. Should we be expecting the international boys with baseball bats or is Mr. Mazankowski privy to some sort of financial trickery? Debt monetization days are almost over and the bell is beginning to toll. When the 1993 budget was released the Canadian credit rating took a bath, going from triple to double A+; this means we will have to pay more to borrow in the future. Don Mazankowski said that this change in our credit rating was due to the irresponsible behaviour of Canadian Bond Rating Service Ltd.

But has Mr. Mazankowski's behaviour been responsible? Since he became finance minister our federal debt has increased by about $65 billion dollars. Although other major international bond rating services have not yet lowered Canada's credit rating, it is still significant that one bond rating service did. It shows that God's laws regarding theft and debt do apply. As Canada goes further into debt our nation is becoming increasingly enslaved. At the very least we will be paying more interest to finance our debt, and there will be more pressure on Mr. Mazankowski and his successor to create more new money. For a time, the highwayman dreams on.

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