General Event
Public Lecture: Keith Helmuth on "The Case for Public Banking in NB and the End to External Debt Service Payments"
Oct 4, 2017 7:00 PM-9:00 PM, Brian Mulroney Hall, Room 101, Fredericton, NB, Canada
Keith Helmuth, author, editor and community development activist from Carleton County will be speaking on public banking as an alternative to the debt and deficit spending of our provincial government.  His talk, "The Case for Public Banking in NB and the End to External Debt Service Payments," will be held on Wednesday, Oct. 4 at 7pm (BMH 101).

If cutting government expenditures, raising taxes, and modest economic growth cannot eliminate government debt and deficit spending, are we stuck with an annual loss of public money due to interest payments? None of the experts on public policy and government finance who are weighing in on NB’s fiscal dilemma offer any credible analysis or advice on reducing and eliminating the provincial debt. Yet if the debt is not eliminated, or at least significantly reduced, the New Brunswick government will continue to send millions of taxpayer’s dollars in interest payments out of the province.

The province of NB pays $600 million annually in interest to service its bonds to unknown outside parties protected by the privacy act – millions of dollars that could and should be used in New Brunswick. Is debt and deficit spending a permanent feature of government?

Under current fiscal management, this is the case. Structural debt is the logical result of the way money is created and managed by the private for-profit financial institutions; it is a design feature that systematically transfers money from NB citizens and businesses to outside institutions of enormous wealth.

Naturally enough, private financial institutions are happy to facilitate permanent government debt in order to secure an ongoing source of income from taxpayers. The international bond rating agencies lower or raise the interest rate governments must pay on borrowed money in order stabilize government debt within a certain range of risk and security. They have no wish to have governments pay off their debts or drive them into bankruptcy. Their business model is to keep a relatively stable government debt going in perpetuity. But shouldn’t a responsible government wish to get out of debt, or at least significantly reduce its debt? Shouldn’t it wish to keep its tax revenue circulating within its own jurisdiction for the benefit of the public interest? If so, then why is the NB government borrowing money from the international, private, for-profit financial industry when there is a clear alternative?

The alternative is called public banking. It is well understood and is being put into practice in various jurisdictions. (see The establishment of a public bank in NB would lead to the immediate reduction and eventual elimination of the need to issue bonds on which interest payments are made to outside parties.

The public banking alternative offers government a way to stop the loss of public money by reducing and eliminating its indebtedness to the private financial system. The public banking alternative provides government a secure way of conducting all its financial activities, including borrowing when needed, within a public utility financial management framework dedicated to serving the public interest.

The State of North Dakota, for example, pays $0 annually in interest to outside financial institutions because the government established a Public Bank in 1919. The government of NB could do likewise and begin to extract the province from the debt service trap.

Keith Helmuth has been a small business entrepreneur and community economic development activist in Carleton County since the early 1970s. He served on the Board of Directors of Carleton Pioneer Credit Union for twenty-five years. He helped found the Woodstock Farm Market Cooperative and the Speerville Mill Cooperative.

He previously taught environmental and economic development studies at Friends World College. He is currently the Publisher and Managing Editor of Chapel Street Editions, a non-profit cultural heritage publishing company based in Woodstock, NB. He has been researching the history and functioning of contemporary monetary systems for several decades.


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