Canada, unlike Greece, Cyprus, can create its own money

Re: Flaherty says balanced budget prepares country for another potential crisis, March 22

Sovereign countries like Canada and the U. S. cannot run out of their own money.

Federal Reserve Governor Ben Bernanke has stated, “... the U. S. government has a technology, called a printing press ( or, today, its electronic equivalent), that allows it to produce as many U. S. dollars as it wishes at essentially no cost.”

Those who say federal coffers are bare, or ask where federal money will come from, are simply misinformed.

Greece and Cyprus surrendered their monetary sovereignty to a foreign central bank, but Canada has not.

The rational debate is over the effects of an injection of fiat money into the economy. A reminder: during the Second World War, our budget deficit rose above 42 per cent of GDP, and our debt- to- GDP ratio was over three times what it is today. The results were a rapid increase in production, unemployment driven down to one per cent, and a military victory followed by years of prosperity, all with limited inflation.

Finance Minister Jim Flaherty says his proposed balanced budget prepares our country for another potential crisis. However, the main effect of failing to stimulate the economy now will be to keep more than a million Canadians unemployed and many families heavily indebted. This will not protect us from a future crisis; in fact, it will more likely help precipitate one. LARRY KAZDAN Vancouver