Thank you very much for inviting this discussion. I will acknowledge that I learned much of this through MMT. The basics of what I described don't actually require MMT. A lot of it is just a straight-up basic Keynesian understanding of how the monetary system works.
When I was first exposed to the ideas of MMT, which I found shocking, I wanted to confirm whether this is how Canada's monetary system works. In the course of that, I found a document from the parliamentary library, entitled How the Bank of Canada Creates Money for the Federal Government, that I would highly recommend to everyone. It describes how, when the federal government is running a deficit, the Bank of Canada creates its liability, the assets of the Government of Canada, and also creates its asset, in the form of the securities it holds, the treasuries. It can then sell a portion of those off to the public while holding on to a certain portion.
During the pandemic, the portion that the Bank of Canada has held has risen, which has allowed the Government of Canada to spend the money it needs to spend.
Now, how do we decide when enough is enough? I will actually affirm in this area something that Mr. Wudrick said, which is that we need more study. We need more understanding of the things that are happening in different parts of the country and in different sectors. Where are prices rising? Where are they falling? The inflation level, this 2%, is a statistical artifact. It doesn't tell us what's happening to the price of toilet paper or the price of houses or the price of something in Calgary. We need more understanding of what's happening in different parts of the country.
That was another key component of conducting the economy during World War II. We had extensive study to understand where actual materials were moving and what prices were being attached to those materials. That then allowed the government to identify where there was profiteering going on or where there were legitimate price increases because of whatever other reasons.
We need to disaggregate our understanding of the macroeconomy and understand the economy through many more lenses. That—