http://webofdebt.wordpress.com/2012/05/29/out-of-the-mouths-of-babes-twelve-year-old-money-reformer-tops-a-million-views/
12-year-old Victoria Grant's message was that
private central and commercial banks create money “out of thin air”
and lend it to people and governments at interest. If governments
issued their own money, they would save a lot of money for the
taxpayers.
Her own country of Canada did this from 1939 to
1974. During that time, the government’s debt was low and
sustainable, and it funded all sorts of remarkable things. When
Canada switched to borrowing privately, it acquire a crippling
national debt as it sold bonds at interest up to
22%.
Victoria quoted Graham Towers, head of the Bank of
Canada :
''Each and every time a bank makes a loan, new bank
credit is created — new deposits — brand new money. Broadly
speaking, all new money comes out of a Bank in the form of loans.
As loans are debts, then under the present system all money is
debt.''
“If Parliament wants to change the form of operating
the banking system, then certainly that is within the power of
Parliament.”
“If the Canadian government needs money, they can
borrow it directly from the Bank of Canada. The people would then
pay fair taxes to repay the Bank of Canada. This tax money would in
turn get injected back into the economic infrastructure and the
debt would be wiped out. Canadians would again prosper with real
money as the foundation of our economic structure and not debt
money. Regarding the debt money owed to the private banks such as
the Royal Bank, we would simply have the Bank of Canada print the
money owing, hand it over to the private banks, and then clear the
debt to the Bank of Canada.”
The Canadian government’s own Auditor General noted
in his annual report that 91% of the debt consists of compounded
interest charges. Subtract those and the government would have a
debt of only C$37 billion, very low and sustainable, just as it was
before 1974.
