No. 29
April 2024
Federal Budget 2024
– K.C. Adams –
• Stepped Up Foreign, Especially U.S., Penetration of Canada to Detriment of Canadians
• Budget Solidifies Canada as a Zone for War
• Increased Budget Payments to and Borrowing
From
Global Moneylenders
• Federal Budget Uses Housing Crisis to Pay the Rich
The Need for Alternatives to U.S.-Domination of Global Finance
• Developments in Global Finance
• Global Debt and the Unsustainable Amount of Social Wealth Expropriated as Interest Profit
Federal Budget 2024
– K.C. Adams –
Stepped Up Foreign, Especially U.S., Penetration of Canada to Detriment of Canadians
Deputy Prime Minister and Minister of Finance, Chrystia Freeland, presented the Trudeau government’s 2024 budget on April 16, 2024. The federal budget further opens up the country to penetration by global oligarchs and integration into the U.S. war economy. Significant aspects of this subservience to the global rich are found in the military spending, the ballooning interest payments on the federal debt, the stranglehold of big developers over the housing crisis, and in pay-the-rich greenwashing with continued handouts to the supranational electric vehicle and battery manufacturers.
Not surprisingly, the budget does not initiate any discussion on an alternative to borrowing from private moneylenders and saddling the country with paralyzing interest payments that sap the social wealth. Coupled with billions of dollars of treasury board spending for war, the payouts in interest charges are crippling the national accounts and sapping large amounts of the new social wealth the working class produces.
This economic direction is not sustainable and must be changed with radical policies such as a moratorium on debt interest payments and an end to borrowing from private moneylenders. Alternatives to this disastrous direction must be discussed such as making Canada a zone for peace with an anti-war government that extricates the country from the U.S. war machine and economy, and internal interest-free borrowing from government itself to cover deficits that are guaranteed and then repaid to the national accounts as the economy develops and the working class produces new social wealth. Such a direction, if coupled with a public banking system and an end to the practice of allowing private banks to increase the money supply through lending more than they possess in their accounts, would go a long way to solving the price inflation that plagues the economy and people.
Budget Solidifies Canada as a Zone for War
In contradiction with the wishes of the people who want Canada to be a zone for peace with an anti-war government, the federal budget increases Canada's integration into the U.S. war economy and wars of aggression worldwide. The government proposes to enhance spending on the military, spy agencies and supply lines funnelling material for war into the United States. Egregious amounts are budgeted to expand NATO and NORAD, two institutions embroiling Canadians and Canada in wars for U.S. hegemony.
The
Office of the Prime Minister summarized the budget figures for war
contained in a government paper and included in the Freeland budget
delivered April 16. The paper called "Our North, Strong and Free: A
Renewed Vision for Canada's Defence" signals an expansion of war
spending annually and in
separate contracted amounts to consolidate Canada's position as a zone
for war in the service of U.S. militarism and its reckless striving for
global hegemony.[1]
Excerpts detailing war spending:
"Around $38 billion over 20 years in the largest upgrade to NORAD in a generation, which will reinforce Canada's support of our continental security alongside our closest ally, the United States, and protect our sovereignty in the North."
Note that Canada's sovereignty is conditioned on obedience to U.S. imperialism and integration into its war economy.
"$11.5 billion over 20 years for Canada's contribution to increasing NATO's common budget and to establish a new regional office in Halifax for NATO's Defence Innovation Accelerator for the North Atlantic.
"$4.4 billion over 20 years to enhance Canada's cyber security by expanding our cyber operations capability and shoring up critical infrastructure to fend off cyber attacks.
"$3.8 billion over 20 years to acquire new critical weapons systems, replenish stocks of ammunition, and improve the Canadian Armed Forces' digital systems."
"$3.5 billion to renew and expand Operation REASSURANCE, the Canadian Armed Forces' largest overseas mission, through which it contributes to NATO assurance and deterrence measures in Central and Eastern Europe."
The
following amounts are to extend the U.S. proxy war in Ukraine in an
attempt to take over Ukraine completely or destroy it while weakening
Russia in anticipation of U.S./NATO forces subduing and occupying it as
a defeated power:
"Over $14 billion in total support for Ukraine, including $7.4 billion for immediate financial support and $4 billion for military assistance. $910 million to support military operations in Ukraine, the Middle East, and the Indo-Pacific region."
Further expenditures include:
"Restoring an industrial
defence capacity, including adding Chantier Davie of Lévis,
Quebec as the third strategic partner under the National Shipbuilding
Strategy, which is renewing Canada's fleet and protecting our Arctic
sovereignty.
"Nearly $1 billion over 20 years to support culture change and wellness in the Canadian Armed Forces, and introducing amendments to the National Defence Act to deliver key recommendations to advance culture change.
"More than $11 billion since 2015 to enhance benefits for veterans, including improvements to education, employment, and caregiver supports as well as the introduction of Pension for Life.
"$3.6 billion for nine new CC-330 Husky aircraft to enhance Canada's strategic transport and air-to-air refueling capability.
"$10.4 billion for up to 16 new P-8A Poseidon aircraft, including for the associated infrastructure and training to strengthen Canada's maritime surveillance capability and contribute to NORAD's maritime warning mission.
"$2.5 billion for a Remotely Piloted Aircraft System to provide the Canadian Armed Forces with the capability to remotely engage targets in complex environments.
"In June 2022, the government made a landmark commitment to invest in continental defence and modernize NORAD.
"$6.9 billion to modernize Canada's surveillance systems, including new Arctic and Polar Over the Horizon Radar systems and enhanced space-based surveillance systems to expand situational awareness of Canadian territory and air and maritime approaches.
"$6.4 billion for new long-range and additional short- and medium-range air-to-air weapons systems to maintain the operational advantage of Canadian fighter aircraft against new and evolving air-based threats; $4.1 billion for new command and control capabilities, including a modernized aerospace operations centre and enhanced Polar communications satellites; and, $15.7 billion for infrastructure and support capabilities, including upgrades to NORAD Forward Operating Locations across Canada's North, including in Inuvik, Yellowknife, and Goose Bay, and new infrastructure for the CC-330 and F-35 aircraft.
Documents issued with the budget inform that another project Canada continues to promote under the pretext of defending NATO's Eastern Flank is "Operation REASSURANCE."
They
inform that the Prime Minister announced that Canada would be "scaling
the Canadian-led Enhanced Forward Presence Battle Group in Latvia to a
Brigade as part of Operation REASSURANCE, Canada's contribution to
NATO's assurance and deterrence measures in Central and Eastern
Europe. To deliver
on this commitment, Canada is scaling our presence in Latvia to up to
2,200 Canadian Armed Forces personnel and acquiring new critical
capabilities on an urgent basis, including: portable anti-tank missile
systems; counter uncrewed aircraft systems; and, soldier-portable air
defence systems.
"Funding of $1.4 billion for these new critical capabilities was first provided in 2022, with additional funding from the $3.5 billion envelope announced in 2023 for the expansion of Operation REASSURANCE. Deliveries will be starting this year.
"The following capabilities will also be supplied to Canada's mission in Europe in the coming months as part of the expansion of Operation REASSURANCE: over 100 light tactical vehicles; at least 49 Armoured Heavy Support Vehicles; personnel defence precision munitions; and, improved communications and surveillance infrastructure."
Note
1. Documents on war spending are available at: Our North, Strong and Free: A Renewed Vision for Canada's Defence; Our North, Strong and Free: A Renewed Vision for Canada's Defence -- Canada.ca and the Freeland budget. The amounts are staggering reaching hundreds of billions of dollars from the public treasury: Chapter 7: Protecting Canadians and Defending Democracy Budget 2024.
Increased Budget Payments to and Borrowing From
Global Moneylenders
The Federal Budget 2024 testifies to the speed with which the Trudeau government is using its term in office to consolidate the hold of the financial oligarchy over the country with increased borrowing from global moneylenders and servicing of a growing federal debt and interest payments.[1]
The federal deficit for the fiscal year 2023-24 is $43 billion, which is up from the $36.4 billion Finance Minister Freeland forecast in her budget update last November. The new budget forecasts deficits of $39.8 billion for 2024-25, and $38.9 billion for 2025-26. Interest payments to moneylenders for this budget year are estimated at $54 billion, which is more than the Canada Health Transfer amount to the provinces. Interest payments are projected to rise to $63.4 billion in fiscal year 2028-29. The accumulated federal debt to the global moneylenders has grown to more than $1.4 trillion.
Points from the 2024 budget show the sources of planned borrowing and issuing of government bonds to the supranational financial oligarchy:
The government plans to issue $172 billion in bonds in 2023-24.
It is tilting its borrowing further to the short end, with two-year bonds accounting for 44 per cent of total issuance.
The aggregate principal amount of money to be borrowed by the government in 2024-25 is projected to be $508 billion, 83 per cent of which will be used to refinance maturing debt (at a higher interest rate it should be noted).
The government proposes to introduce amendments to the Borrowing Authority Act to increase the government's total borrowing limit.
The size of the 2024-25 gross issuance of domestic bonds and treasury bills (i.e., domestic borrowing program) totals $500 billion. Budget documents say this reflects requirements to refinance $414 billion of maturing debt, in addition to projected financial requirements of $102 billion, which includes $30 billion to fund purchases of Canada Mortgage Bonds and a reduction of cash balances of $16 billion.
The government also intends to borrow an equivalent of $8 billion in foreign currencies, solely for the purpose of funding its official international reserves.
Note
1. See Tables A2.1 and A2.2 below.
Federal Budget Uses Housing Crisis to Pay the Rich
The federal government is using the housing crisis to further entrench and enrich the imperialists involved in the financing, building, selling and renting of housing. The Federal Budget 2024 provides $8.5 billion for various pay-the-rich schemes for developers to build housing for sale or rent for private profit.
Everything
is predicated on private enterprise building, selling and renting
housing as commodities for profit. The aim of these policies is to
serve the private interests of developers, not solve the housing
problem and guarantee housing as a right. Public involvement is limited
to financing
projects through direct subsidies, low interest loans and helping
individual buyers put together enough money for a down payment and
become captured with a home mortgage sold to them by one of the big
financial institutions and guaranteed by Canada Mortgage and Housing
Corporation (CMHC).
The Freeland budget, corresponding speeches and media presentations do not initiate any discussion towards a new pro-social direction to solve the housing crisis. A new direction would include establishing a public construction, maintenance, finance and administrative enterprise to build housing to sell or rent and maintain at amounts workers can afford at a maximum percentage of their income, say 20 per cent. None of the policies in the budget are new as they all continue to enslave the people and economy to the supranational rich. They have all been employed before in various forms and all have failed to solve the housing problem.
In its attempt to cling to power, the Liberal government is going all out to use its tenure to pay the rich. The flurry of policy objectives for housing is not meant to solve the problem but rather to serve the private developers and banks, and possibly attract voters for the Liberal Party. The mass media use words and phrases that are designed to mask the true intent of the measures to pay the rich and consolidate their power over the economy. The ruling elite only allow their political representative to serve their private interests and aim for maximum profit in one way or another.
Housing is presented as a commodity to buy and sell for private profit rather than a necessity of life that is a right. The people, by putting forward their claims to the right to housing are challenging this outdated outlook. In the socialized economy in which we all live, housing at a modern cultured level is a right that the society and its leadership are obligated to fulfil. The neo-liberal concept of "fending for yourself" is self-serving, corrupt, anti-social and anti-national.
Housing should not be viewed as a commodity to enrich those who own and control the socialized economy. Housing is a right, full stop, and cannot be predicated on income, ability or any other feature that some individual may or may not possess. How this is accomplished is a project the people are taking up by defending their own interests and organizing for it to become a reality. The affirmation of housing as a right is a step forward to bring the democratic personality into being and build the New.
Protest against renovictions, Waterloo, 2023
All the housing measures in one way or another seek to enrich the imperialists who see housing and all that goes into it as commodities to sell to serve their private interests and block the people from affirming in practice that housing is not a commodity but a right, which society must guarantee for every resident. The budget allocates $8,524 million in handouts for the imperialists to enrich themselves by using housing as a commodity and tens of billions more dollars in loans.
Various pay-the-rich policies in the budget that are also an attempt to divert and block the people from organizing to make housing a right in practice include:
Interest deductibility limits for purpose-built rental housing
The budget introduces an elective exemption from the excess interest and financing expenses limitation rules for certain interest and financing expenses incurred before January 1, 2036, in respect of arm's length financing used to build or acquire eligible purpose-built rental housing in Canada. This exemption would apply to taxation years that begin on or after October 1, 2023.
The limit on the amount of interest and financing expenses that can be deducted, generally 30 per cent, established in the 2021 federal budget is eliminated, meaning all interest and financing expenses are tax deductible for eligible projects.
Accelerated Capital Cost Allowance (CCA) for purpose-built rental housing
The budget introduces an accelerated CCA of 10 per cent, increased from 4 per cent, for new eligible purpose-built rental projects that begin construction on or after April 16 and before January 1, 2031, and are available for use before January 1, 2036. Eligible property includes projects that convert existing non-residential real estate into a residential complex or add to an existing structure that meets the definition.
A new Public Lands for Private Homes Plan
The budget seeks to transform public land into 250,000 housing commodities. This includes Canada Post properties, National Defence land and government office buildings. The program will be financed through an additional $15 billion in new loan funding for the Apartment Construction Loan Program.
Canada Builds
Canada Builds combines federal low-cost loans with provincial and territorial investments to scale up construction of private rental homes. The program provides a $400 million top-up to the $4 billion Housing Accelerator Fund to increase construction of over 750,000 new homes to be sold over the next decade.
Canada Rental Protection Fund (CRPF)
The budget launches a $1.5 billion CRPF to grow the stock of private rental housing.
This provides loans and contributions to: "non-profit organizations and other partners" to buy up housing units from its current owners. Co-led and co-funded by the federal government and other partners, the Fund will mobilize investments and financing from the charitable sector and the private sector which the Budget says is "to protect and grow affordable housing."
Affordable Housing Fund
The budget provides $1 billion for the Affordable Housing Fund to build homes for sale.
Reaching Home
The budget provides an additional $1.3 billion for Reaching Home: Canada's Homelessness Strategy to address homelessness and encampments. [Details were not provided as to how this would be done in the face of tent encampments appearing everywhere and the criminalization of poverty becoming the norm more and more -- TML Ed.]
Canada Housing Infrastructure Fund
The budget allocates $6 billion over 10 years for private contractors to upgrade housing-enabling infrastructure.
The budget proposes to streamline foreign credential recognition in the construction sector and create more apprenticeship opportunities to help skilled trades workers build more homes for sale. [No mention was made to reimburse the foreign countries that paid for the education of workers coming to Canada -- TML Ed.]
The budget ensures the removal of GST on newly-built student residences.
Home Buyers Plan
The budget enhances the Home Buyers' Plan by increasing the withdrawal limit from $35,000 to $60,000 for first-time home buyers to use the tax benefits of an RRSP.
The Canadian Mortgage Charter will allow 30-year amortizations for first-time home buyers to purchase newly-constructed homes from private builders with mortgages supplied by approved big financial institutions.
Pay the Rich Greenwashing
In addition to the housing handouts to the rich, the Federal Budget 2024 provides $20.9 billion in ways to enrich the imperialists under the guise of "greening the economy." The budget includes a mix of investment tax credits and cash handouts for the rich to make a transition to less intensive carbon energy. It provides a "clean" electricity tax credit worth $6.3 billion over six years and one for hydrogen projects worth $5.6 billion. Another $4.5 billion investment credit is included for those producing electric vehicles and batteries, and processing critical minerals.
Carbon Tax
The carbon tax, also known as a price on carbon, is a price levied on emissions from carbon fuel sources, be it from coal, oil, natural gas or gasoline.
Carbon taxes along with cap-and-trade and marketing of carbon credits emerge from the law of limitations and the need for governments to "do something" to address the broad concern across civil society about climate change. Within the imperialist system, "doing something" about climate change must not restrict or affect paying the rich, the sanctity of private property and the aim of maximum profit and maintaining control over competing interests and sources of raw materials and cheap labour. The burden of "doing something" is passed onto the people in one way or another.
Pundits have twisted their minds to come up with these schemes that avoid directly stepping on the right of private property to rule and be enriched but rather make the people pay for the "doing something." In this way the imperialists are not restricted in their pursuit of maximum profit nor unduly affected by competitors yet think they can appear to be concerned that something is being done to address climate change.
The carbon tax is a standard price per tonne of CO2-equivalent emissions generated. The carbon tax came into effect in Canada at $20 per tonne in 2019. It has steadily climbed in the years since and was scheduled to rise from $65 per tonne to $80 on April 1. It is scheduled to go up another $15 each year until 2030, when it reaches $170 a tonne. At this rate, by 2030, the price on carbon would add nearly 40 cents per litre of gasoline at the pump.
The specific carbon levy varies based on how much carbon dioxide a fuel releases when burned. Coal, for example, releases more carbon pollution than natural gas to produce the same amount of energy, so the tax is higher on coal than natural gas.
The carbon tax affects 20 different products with prices according to the amount of carbon emissions. These differences require extensive calculations and reporting of the tax as shown in this government graph.
The amount of carbon tax a buyer pays depends on the fuel source used -- the more emissions the fuel produces, the more tax is to be paid. The carbon tax on home heating oil, for instance, works out to $0.1738 per litre. At the present time for heating oil, the carbon tax adds roughly nine per cent to the total bill.
Governments have devised two systems for pricing carbon in Canada. Quebec and certain provinces have their own system while the federal government has a compatible one. The fuel charge is a consumer carbon tax on the gasoline and other carbon fuels used to heat a house and power a vehicle for example. Another system is applied to industrial users.
The carbon tax on industrial users is passed on to consumer commodities. Any tax on means of production increases the market price to the buyer downstream unless the company involved reduces its profit by the amount of the tax and keeps the market price for the commodity the same. This would be exceptional because the carbon tax applies to all and therefore does not affect competition as all can raise the price accordingly.
For buyers of means of consumption, the carbon tax has already been buried and transferred within the amount regardless of the commodity. Also, the price of distribution of goods will be affected and given the increase in delivery of goods using the Internet the overall effect on consumer market prices is significant.
Canada calls its program "revenue neutral" because all proceeds are returned to the province where they were collected. The government contends that 90 per cent of carbon tax revenues are returned to households through a rebate program. The other 10 per cent is said to be directed to programs to help businesses, schools, municipalities and other grant recipients reduce their carbon fuel consumption.
For individuals, the amount of tax paid and rebate received depends on multiple factors, which affects the neutrality of the tax. According to a Statistics Canada model, 94% of households with incomes below $50,000 received rebates that exceeded their carbon-tax costs in 2023. The report appears to use only the carbon tax on the means of consumption and does not appear to take into account the carbon tax price increase that may be buried or transferred within the commodity as it moves through the economy. The chart of Canada Carbon Rebate amounts for 2024-25 can be viewed here.
Even taking these figures at face value, saying the tax is revenue neutral is not factually correct because a large bureaucracy is needed to calculate and handle the tax and rebates. The totality of these measures and the massive subsidies to the supranational enterprises to make a change to less carbon use reflects the jumping through hoops, irrationality and fraud necessary to present that something is being done about climate change but without restricting the right of private property and imperialist owners to exploit the working people and Mother Earth, and do whatever it takes to impose control over what belongs to others abroad.
The official opponents of the carbon tax decry it as just another tax grab. They do not present an alternative to deal with climate change directly that would affect those who own and control the economy. However, the crisis of climate change must be addressed and that means the people must force those who own and control the economy to deal with the problem directly and concretely through restrictions on their actions, profits and interference and control over others abroad. Fraudulent means that pay the rich are not intended to even marginally mitigate the climate crisis.
Economists' Open Letter in Support of the Carbon Tax
In support of the Liberal government's carbon tax, a collection of economists from across Canada have penned an open letter whose main feature is their refusal to confront the situation of climate change with objectivity of consideration. They are stuck in a world which is incapable of sorting out any problem because it ignores the lack of control of the people over the decisions which affect their lives. They ignore that it is the people's striving to humanize the social and natural environment which is the driving force for change which favours them and the natural environment, not the capitalists striving for power, control and maximum profits.
In
the face of the private interests of an oligarchy that owns and
controls the main means of the economy's productive forces, including
the human work force, the economists' outlook and reference point
constrain them from exposing the carbon tax as a climate change fraud
and instead recognize
the necessity for change. They refuse to see or even acknowledge the
possibilities of substantive action to combat climate change. Instead
they confine themselves to accepting and even lauding the carbon tax as
necessary. This is despite the fact that the carbon tax essentially
forces the people to
pay for the sins of those in ownership and control of the economy and
does next to nothing in the battle against climate change.
From the imperialist vantage point of the economists, used to draft the federal budget and by the Loyal Opposition, no alternative is possible, certainly not an alternative that violates the authority based on "right of private ownership" of the means of production. This includes their "right to maximum profit" to increase their already bloated personal fortunes and power.
From the vantage point of this collection of economists, they denounce opposition to the carbon tax as opposing a small step in combating human-caused climate change. Constrained within their reference point their argument amounts to no more than "the tax is better than nothing." They plead that at the least the make-the-people-pay carbon tax has a minor effect on reducing carbon emissions within an economy that in fact requires serious change to its aim, form, content and authority. They block the acknowledgment and consciousness that with bold action in opposition to the "powers that be" much could be done with a new aim and direction for the economy to reverse the damaging consequences of an economy that now serves destructive wars and striving for power and control by contending global oligarchs, not the people and Mother Earth.
The climate crisis has emerged as an objective problem that cannot be avoided. The owners in control of the economy and official politics have no choice but to deal with the problem within the law of limitations, which for them and their anti-people outlook means forcing the people to pay with individual taxes, cuts to social programs, a lower standard of living, recurring economic crises within an insatiable war economy of pay-the-rich schemes and endless wars.
The
social wealth needed to make the necessary changes to lessen carbon
emissions is enormous. The technical and scientific developments of the
human productive forces are objective and are so massive that they are
out of the control of the oligarchs, with the climate crisis evidence
of this.
What the oligarchs cannot control, they act to destroy, using wars of
destruction of human productive power, as seen in Palestine, Libya,
Iraq and elsewhere. Driven by their need to protect their private
interests in an economy that is socialized and interconnected globally,
they cannot provide
solutions -- which requires politically empowering the people to govern
and decide.
Contrary to the reality of a socialized economy, the oligarchs want any greening of the economy to be done for their narrow benefit with their personal wealth and power expanded not diminished. This insistence requires the people to pay for any changes including using the public treasury for pay-the-rich schemes. Such programs on this front are already well underway with enormous public funds made available to the supranational rich to change to renewable electrical energy production, distribution and consumer goods, as well as guarantees for cheap infrastructure, supply lines and increased means of waging war.
The billions in public subsidies to the privately-owned and controlled supranational vehicle and battery cartels have already become legend. Also, new legislation has already been introduced to make any disruption to trade and supply lines a criminal offence. This will effectively criminalize workers and their organized defence of their rights as well as those protesting war, destruction of Mother Earth and the violation of rights including the rights of Indigenous Peoples. Laws to criminalize disruption of trade are designed to make unions and their actions in defence of the working class illegal and to criminalize political activity that does not fall into a narrow category deemed acceptable by the global rich and their representatives holding state power.
For
the carbon tax economists, a companion to the pay-the-rich schemes is
to make the people pay with increased individual taxation and a
degrading of social programs and the general standard of living. The
social wealth the working people produce is to continue to be
constrained within the aim
of paying the rich who own and control the main parts of the economy,
public subsidies to them and for government expenditures to sustain the
war economy. Within this context, the oligarchs in control seek to
eliminate all opposition to their private ownership, control and right
to deprive whether
it comes from people defending their rights or competitors.
The oligarchs in control seek to eliminate the opposition of working people and any constraints on the expansion of their business affairs throughout the world. They relentlessly want more regions to come under their control, markets to exploit, resources to seize and cheap capacity to work to buy. This requires enormous expenditures for a war economy to be in a constant state of readiness and growth. The social wealth to sustain their operations at home and abroad demands that the people must pay with such schemes as the carbon tax, cuts to social programs, price inflation and a lower standard of living.
The oligarchs refuse to give up their ownership and control of the economy and politics and change the direction of the economy to a pro-social one and allow a new authority of the people to take control. Such a change would mean using the social product and the new value workers produce not for maximum private gain and war but to serve the people, develop the economy and humanize the social and natural environment.
The open letter praising the carbon tax is not penned by economists in the scientific sense. They are spokespersons for the ruling elite who own and control the economy. The letter is disinformation which does not take up climate change in an all-sided serious manner. It just adds fodder to the phony pro or con debate over the carbon tax to divert people away from the work required to humanize the natural and social environment.
Why these economists would write something praising the carbon tax makes one think that perhaps they are the ones who came up with the idea in the first place. The idea is stuck firmly in the magical marketplace and its invisible hand to solve all problems. Even statistics are presented of a reduction in emissions in the classic liberal way, which is meant to fool the people into believing those in control are dealing with the problem. Strip people of their purchasing power to reduce the carbon footprint. Oh yes, making the people pay will solve the problem, just like shutting down small businesses during the pandemic was supposed to save the people while letting big business expand and take over more of the economy as bankruptcies exploded. They still refuse to hold to account their allies who own the private nursing homes and let seniors die en masse during the pandemic!
The
richest people on the planet are consolidating their wealth and power
and control over the economy and peoples of the world and intensifying
their war fever. The carbon emissions from the U.S./Zionist genocidal
war against Palestinians and the U.S. proxy war against Russia using
Ukrainians as
fodder are pouring more carbon into the atmosphere than the carbon tax
can ever hope to eliminate. The war economy and the profiteers in the
military industrial complex are filling their pockets through profiting
in part from public money raised from the carbon tax and siphoned away
from social
programs. Are we to believe war is good for the environment? Are they
going to have electric powered missiles and bombers with solar panels
on top and claim they are saving the planet from climate change?
Greenwashing through and through along with their anti-people carbon
tax. The level of
hypocrisy and double speak is astounding.
Whether to tax this or that and then claim it will solve the problem of climate change is yet another form of greenwashing and shows how the uber rich in control have no intention to deal directly with the problem, which would impinge on their power and profits. The aim of big business to retain and expand their power, control and profits is in contradiction with any claims of being socially and environmentally responsible. The carbon tax is just more fleecing the people using high-sounding words. These are the same oligarchs in control who oppose tooth and nail making Canada a zone for peace and instead are ramping up war spending, war preparations, and war itself all over the globe with full integration into the U.S. empire's reckless and destructive adventures.
No authority of the people exists within the current political structures to ensure science and the human factor are put at the forefront when it comes to economic development. Instead, the narrow private interests of contending global oligarchs impacts how science and the public treasury are used and for what purposes. Protecting their interests necessarily means continuing wars, destruction of human productive forces, economic upheavals, the growing gap between rich and poor and worldwide destruction of the social and natural environment.
Talk and praise of a carbon tax and using opposition to it to promote narrow political ambitions are out of touch and aloof. The so-called carbon tax debate shows how an official agenda is set and promoted from private offices, boardrooms and public relations companies and then becomes an issue in the mass media to promote this or that political party and leader while diverting the people from how to deal with the social and natural problems directly. Dealing seriously with social and natural problems entails stepping on the toes of those in control and means stepping up current efforts by the people speaking out in their own name for rights and working to empower themselves to change the aim and direction of the economy.
Within
the constraints of the imperialist outlook and reference point, the
economists have penned their letter to support the federal government's
make-the-people-pay carbon tax. Their outlook blinds them to the
possibilities of a change to a pro-social aim and direction for the
economy. The
objective conditions demand a change in the authority in control to
bring it into conformity with the socialized objective condition. It
can be done, it must be done!
A pox on both the pro and con carbon tax advocates whether they call themselves politicians, economists or whatever. They are propagandists for the status quo and those in control who possess the power to deprive. Time for a change to the New with the empowered people in control of the economy and state with an anti-war government whose aim is to serve the people and Mother Earth and humanize the social and natural environment.
Dissecting the Economists' Open Letter
Extracts from the letter are in quotation marks accompanied by comments.
"As economists from across Canada, we are concerned about the significant threats from climate change. We encourage governments to use economically "sensible" policies to reduce emissions at a low cost, address Canadians' affordability concerns, maintain business competitiveness, and support Canada's transition to a low-carbon economy. Canada's carbon-pricing policies do all those things."
"As economists from across Canada," they are obligated to be scientific in their field and presentations, and from an analysis find a way forward for the economy to develop in the service of humanity without crises or damaging Mother Earth. The adjective sensible is a subjective term. It reflects the current mania of cartel party politicians who speak of "common sense" policies, which can hold any meaning according to particular prejudices and outlook.
Private interests own and control the economy. They want "sensible policies" that serve their private interests and do not harm them or impede their "business competitiveness." Their private interests are bound up with particular enterprises, sectors, investments or ways of doing business. They view the economy, its change and problems from the vantage point of their own particular private business and investments, not from what serves the economy, its development, people or Mother Earth.
Other parts of the economy, which is part of the globalized economy, are most often viewed as competitors to defeat, take advantage of, or destroy. What makes sense to them is the requirement that sensible policies, according to their vantage point, do not damage their narrow private interests. If certain changes are forced upon them, for example through the development of the productive forces, and result in an increase to their prices of production, they demand government compensation through pay-the-rich schemes and other "sensible" policies.
Resistance of the Rich and Their Political Representatives to the Socialization of the Relations of Production
Those who own and control the economy demand the public treasury support their private interests with subsidies and other factors of production such as cheap educated and healthy workers and infrastructure. They believe their own survival as wealthy and privileged businesspeople depends on assistance from public resources, otherwise they will lose their particular economic grip over the economy. Their greatest fear, which is expressed in practice by their political representatives, is that relations of production will become socialized in conformity with the already socialized material productive forces. In other words, they dread the prospect that the economy will complete its socialization and come under the control and political authority of those who produce the social product, the working class and people. With socialization of relations of production, working people will view the economy as a single sheet of steel within the necessity not to damage Mother Earth. In so doing, they will unleash the full potential of a modern socialized economy in the service of all humanity, not just a select few.
To avoid the progress of the economy and society to the New during this transition to a lower carbon economy and increased productivity, the current owners of the means of production and distribution demand that public institutions uphold their narrow private interests. Without public financial support and cheap infrastructure and a political authority defending their private interests, they fear losing their ownership and control of the parts of the economy they now possess. Such a state of affairs is unthinkable for them and their outlook, which is rooted in private ownership of an economy that has become socialized in all aspects except in who owns and decides and controls its direction and how the social product and wealth is distributed and invested.
In the face of the challenges of the current transition to a lower carbon economy, AI and robotic productivity and not to damage the private interests that own the economy, the economists who penned the open letter want "sensible policies" to reduce carbon emissions "at a low cost" that "address Canadians' affordability concerns" and "maintain business competitiveness." They assert, "Canada's carbon-pricing policies do all those things."
"Sensible Policies"
"Sensible policies" are to be taken at face value as sensible and irrefutable according to the particular prejudices and reference point of those who consider the policies sensible. A certain irrationality and faith in the unknown are needed to overcome the lack of science and objectivity of consideration. Facts are chosen to prove how sensible the carbon tax is. For example, a general reduction of 8 per cent in carbon emissions in Canada since 2019 is attributed to the carbon tax. This proves the sensibleness of a carbon tax along with the fact that for private interests the carbon tax comes at a lower cost to their private businesses than more direct measures. The tax is passed on to the consumer and in some measure to the public treasury through rebates. The pandemic shutdown slowing the economy during much of the period in question is ignored.
Not just the carbon tax is considered "sensible" in reducing carbon emissions. Governments have taken other measures to support owners of supranational enterprises and their global domination and expansion. Massive sums of public money are flowing to Volkswagen, Northvolt, General Motors, Stellantis and other vehicle, battery and energy producers to lower their prices of production and boost their rates of profit. These public handouts likewise are considered "sensible" and good for "business competitiveness," albeit at the expense of federal, Quebec and Ontario government treasuries and their ability to invest in social programs. Paying the rich within a war economy has become the mark of sensible representatives in government, the monopoly-controlled mass media and official economists.
The Need for Alternatives to U.S.-Domination of International
Financial Institutions
Developments in Global Finance
Attempts are underway to develop alternative processes for international financial settlements to avoid or at least mitigate U.S. imperialist domination. The U.S. uses its control of international financial institutions to dictate its wishes and extend its global reach of exploitation and oppression. The domination includes using sanctions and blockades as weapons of undeclared war, such as the blockade of Cuba that causes Cubans great difficulties and suffering and stifles their economic development.
The other issue many are seeking to address is the unprecedented
worldwide flow of newly-produced value into the pockets of owners of
debt concentrating wealth and power in fewer hands and depriving the
people of means to develop their economies and solve problems.
Methods to counter the U.S. sanctions, financial control, weaponization of the U.S. dollar and unprecedented debt levels include the creation of new financial mechanisms within the BRICS framework of participating countries. More broadly many countries are determined to stop paying the existing debt to imperialist public and private global financial institutions and develop new methods to mobilize social wealth for development.
BRICS
The BRICS organization of nations initially began in 2006 with the participation of Brazil, Russia, India and China, with South Africa joining soon after. By 2024, membership has grown to nine with the addition of Egypt, Ethiopia, Iran and the United Arab Emirates while many others express interest to join. BRICS now encompasses almost half the population of the world. The organization is seen as a counter to the U.S.-led G7 and a means to develop and modernize economies without the interference of the U.S. imperialist-bloc and its coterie of doting followers including Canada.
Deliberations at the BRICS 2023 Summit in South Africa, held from August 22-24, included the need to prepare an alternate international payment system to circumvent the U.S.-dominated Swift system and other means the U.S. uses as weapons of control and war. Members discussed the desirability of using their national currencies in trade and financial transactions within the BRICS group and with other trading partners to bypass the stranglehold of the U.S. dollar. This entails the need to strengthen banking relations among BRICS countries and others for settlements in national currencies, rather than going through Swift or using the U.S. dollar as intermediary, which always ends up siphoning away needed social wealth and negating self-reliance in development. Global use of the U.S. dollar as the main reserve currency and means of settlements are important factors in the ability of U.S. imperialism to continually run up its debt, service it with yet more debt and pay for its massive global military, its subversive system of worldwide NGOs, use bribery to undermine others, organize regime change and wage wars.
BRICS members also wish to improve and extend the role of the BRICS New Development Bank as a mechanism that countries can use as an alternative to international borrowing from U.S.-dominated public and private financial institutions. Global borrowing from imperialist financiers with the ensuing crippling interest payments has become a huge problem for the international community.
BRICS members agreed in 2013 to create the New Development Bank with a commitment of $100 billion in social wealth. China forwarded $41 billion towards the pool; Brazil, India and Russia $18 billion each; and South Africa $5 billion. The extent of U.S. domination is shown concretely in the fact that the BRICS New Development Bank, although seeking independence from U.S. control, still uses U.S. dollars for loans and settlements. With this being the case, the New Development Bank and those dealing with it are forced to buy and trade for U.S. dollars and avoid transactions with countries under U.S. blocking sanctions, which block third countries from engaging with countries the U.S. sanctions. The threat of such sanctions or new ones is perceived as a risk by banks within the BRICS countries. This is particularly the case following the December 2023 amendments to U.S. Executive Order 14024. The amendments give the U.S. Treasury the authority to impose blocking financial sanctions on foreign banks involved in transactions with Russia or any trading in goods from the existing U.S. export control list.
Within the situation, global settlements in national currencies do not completely solve the problem since U.S. authorities require such bank transactions to be reported to them, even though they are none of their business. This makes payments in national currencies only a partial solution to the problem of U.S. control and sanctions. Increasingly, many are seeking global trade and other relations completely outside the global reach of U.S. imperialism, although this carries with it the risk of isolation from mainland Europe, the U.S. and others in the Five Eyes (Canada, UK, Australia and New Zealand) and U.S. threats of regime change and military attacks.
The U.S. threat is real against BRICS member Russia and others such as Cuba, Iran, Venezuela and the Democratic People's Republic of Korea (DPRK). They are all under U.S. sanctions, blockades and military threats such as the current U.S./NATO proxy war against Russia, using Ukraine as a pawn since its takeover in a 2014 U.S.-organized regime change. The U.S. warns all others to avoid contact with prescribed countries on pain of similar attacks. The threats against BRICS will certainly increase with the anticipated membership of Iran and others. The U.S./Zionist genocide in Palestine is a depraved attempt to warn all of the fate that could befall them if they dare to deviate from U.S. control but increasingly worldwide resistance to U.S. hegemony is braving the situation and finding itself capable of weathering the storm.
Where There Is Oppression, There Is Resistance
Climate justice march, COP26, Glasgow, November 5, 2021
Opposition to domination, control and social class oppression is in the DNA of all humanity. The human factor/social consciousness demands empowerment and progress towards an existence free from tyranny and class oppression and control. The imperialists have shown themselves in practice as unfit to rule and unwilling to relinquish their hold on power without being forced to leave. People are bravely striving for empowerment and an end to imperialism, war, class oppression and the ruination of Mother Earth. There is a striving for harmonizing human relations so that the rights of humanity are met.
At a minimum, attempts are underway to find solutions to international participation in the exchange of medical supplies including pharmaceuticals, food, fertilizer and other necessary goods and services and for alternatives to the current self-serving system of drowning the world in debt. Ways are being developed to settle international trade and assist one another with mutual development, free from U.S. dollar domination. The presence of an alternative to U.S. financial domination and control such as BRICS, and the heroism of independent Cuba, the DPRK and others are themselves liberating exercises for humanity everywhere to turn the tide in the people's favour.
The next BRICS summit, its 16th annual iteration, will take place from October 22-24, 2024 in Kazan, Russia, concurrent with the country's term as presidency of the organization.
Global Debt and the Unsustainable Amount of Social Wealth Expropriated as Interest Profit
Necessity for a moratorium on paying interest on government debt and government
borrowing from private interests
Accumulated global debt owed by governments, enterprises and individuals reached a record $307.4 trillion last September. The total accumulated debt surged by $100 trillion from a decade ago.
The expropriation of interest profit from this colossal debt has been exacerbated recently by an increase in the average rate of interest the moneylenders charge. The interest rate on debt worldwide is now calculated at an average 5.2 per cent and rising as existing debt is reset at higher rates.
Using 5.2 per cent, the annual interest profit expropriated on global debt of $307.4 trillion is approximately $16 trillion. The amount expropriated as interest profit is taken from the social value workers produce. The $16 trillion of newly-produced social wealth expropriated as interest profit becomes unavailable for the people and governments to use for the common good.
The $307.4 trillion in global debt far outstrips annual global production of social value or global Gross Domestic Product (GDP) estimated at $100 trillion for 2023. Imperialist economics calculates global new production of social value or GDP as exchange-value at market prices, not use-value at its price of production. Only social product sold and realized in a marketplace is considered produced and worthy to become a factor in the GDP at its exchange-value. Total global social product for 2023, after what workers produced as use-value has been negated to become exchange-value, is calculated to be around $100 trillion. Deducting interest profit from the total GDP or exchange-value of what working people produce leaves $84 trillion in social wealth. This amount is expropriated as enterprise profit, ground rent profit, executive profit and government profit, leaving the rest for the claims of working people as wages, benefits, pensions and social programs.
The imperialist economy tends to concentrate social wealth in the hands of privileged sections mostly in the heartlands of the colonial exploiters from the U.S., UK and others in Europe and Japan. The accumulated social wealth in the hands of the ruling elite seeks places to put the expropriated social value in their own countries and throughout the world to gain maximum profit for themselves and otherwise to serve their private interests. The colossal amount under their control goes into yet greater global debt to them and into investments in their war economy to defend and expand their private interests at home and abroad. The social wealth they control goes into resource extraction for raw material they seek, into cheap workers to exploit, and into social production and markets to produce and sell the social product workers produce.
The imperialists lend the social wealth they own through international institutions they control such as the International Monetary Fund and World Bank and increasingly through privately held cartels. Moneylending on today's scale has created a situation where $16 trillion of social wealth is immediately deducted from the new social wealth working people produce. Interest profit flows into the coffers of the super-wealthy to further their domination, exploitation and endless competition and wars. This has worsened the recurring economic crises throughout the world and deepened the political, social and natural problems facing the people. It must be stopped as an immediate task of the revolutionary people! A moratorium on paying interest profit must be instituted as a matter of survival and all new government debt to private interests must be outlawed!
Data from the Institute of International Finance (IIF)
Global debt in recent years has surged and hit a record $307.4 trillion. The IIF reports global debt in dollar terms rose $10 trillion in the first half of 2023 and by $100 trillion over the past decade.
The U.S., UK, France and Japan account for more than 80 per cent of the increase in debt. U.S. government federal debt topped $34 trillion at the end of December. In 2023 alone, this debt grew by more than $4 trillion. China, India and Brazil saw the most pronounced growth of borrowings among developing countries.
Global debt is now approximately $207 trillion more than the global annual Gross Domestic Product (GDP) of $100 trillion. This marks "a staggering 336 per cent of global GDP compared to a debt-to-GDP ratio of 110 per cent in 2012 for advanced economies, and 35 per cent for emerging markets," says the IIF.
Annual interest payments to service the global debt have reached around $16 trillion. The U.S. government annual interest payments to service the debt have now surpassed $1 trillion. The $1 trillion in interest payment is less than most other countries would have to pay on a similar debt as interest rates are far higher in developing countries.
The moneylenders holding the debt expropriate the interest profit from the new value working people produce, either directly from enterprises where they work or from government taxation of the new value workers produce.
Global debt is divided approximately into three sections. The first two are government held debt and business debt, holding two-fifths each of the total, while household debt makes up the remaining one-fifth.
Private interests expropriate for their own use and control the $16 trillion in interest profit and other vast sums of the new value workers produce as enterprise profit, ground rent profit and executive profit. Governments also expropriate new value through taxation for pay-the-rich schemes, cheap infrastructure for the imperialists, government bureaucracy, and to service government debt to private interests and to pay for the vast war economy and ongoing wars. These amounts of social wealth under private and imperialist government control are used for purposes dictated by the ruling oligarchy to expand their private wealth, control and power and finance their privileged lifestyles.
These enormous sums of social wealth are not available for the people to use for the common good and their well-being as they see fit according to the public interest to solve problems the economy and society face and to humanize the social and natural environment.
To change the situation, the issue of working people's lack of political power has to be confronted. This requires further strengthening the unity of working people and organizing as a social force for political empowerment. It involves learning together through individual and collective acts of finding out how to wage revolutionary struggle to move history forward past the current imperialist domination.
These acts of finding out are already evident in demands and claims being made by workers on the value they produce in the here and now for wages, increased investments in social programs, for governments to stop paying the rich, disengage from the war economy, and begin a moratorium on servicing government debt and halt to government borrowing from private interests.
These individual and collective acts of working people of finding out involve organizing and educating themselves in how to prepare the subjective conditions for revolution to bring into being modern democratic economic and political forms that will allow working people to govern directly all the affairs that affect their lives, their society, and all humanity.
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