Local Gov’t Stories, Events
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Health Care & Environment
09.16 The Health Care Debate We’re Not Having [we need to fully expose and root-out America's profit-obsessed, mafia-like healthcare practices]
09.15 Half of Canada's monitored wildlife is in decline, major study finds [would the Koch brothers like to make a comment?]
09.14 On The Road To Extinction, Maybe It's Not All About Us [all of us—but especially oil & gas companies—need to know the harm and death we've caused to all life as we know it, and we must undo that damage]
09.14 The entrepreneurs turning carbon dioxide into fuels [end-products later burned and polluting aren't helpful]
News Media Matters
US Politics, Policy & 'Culture'
09.19 Gone Baby Gone
09.13 Bernie Sanders unveils universal healthcare bill: 'We will win this struggle' [assuming typical cost-controls and efficiencies, ongoing total savings will be at least a $Trillion per year with government paying a larger portion of over-all costs]
09.17 The Forgotten Victims of Agent Orange [why was there no war crime trial and punishment for this?]
Economics, Crony Capitalism
09.18 GOVERNMENT BY GOLDMAN
09.18 College in the U.S. Is More Expensive Than in Any Other Country in the World [our 'mafia capitalism' is the best in the world!]
09.16 Capitalism and Poverty [as disemployment from automation and offshoring increases the population at risk of poverty will grow, so we'll have to help them or society will become more suicidal and violent]
International & Futurism
09.15 Migrants stuck on endless ferry journey as countries refuse entry [like the Jews on the Voyage of the St. Louis in 1939]
09.15 Moscow flaunts might against fading Isis as it alters balance of power in Syria [endless war cultivates a cavalier attitude]
Keeping The State’s Money In The State: An Alternative Solution To The Budget Crisis
Sunday, 27 March 2011
State-owned banks could be a win-win for everyone interested in a thriving local economy. Objections are usually based on misconceptions or a lack of information.
Cut spending, raise taxes, sell off public assets – these are the unsatisfactory solutions being debated across the nation; but the budget crises now being suffered by nearly all the states did not arise from too much spending or too little taxation. They arose from a credit freeze on Wall Street. In the wake of the 2009 financial market collapse, banks curtailed their lending more sharply than in any year since 1942, driving massive unemployment and causing local tax revenues to plummet.
The logical solution, then, is to restore credit to the local economy. But how? The Federal Reserve could provide the capital and liquidity necessary to create bank credit, in the same way that it provided $12.3 trillion in liquidity and short-term loans to the large money center banks. But Fed Chairman Ben Bernanke declared in January 2011 that the Fed had no intention of doing that — not because it would be too costly (the total deficit of all the states comes to less than 2% of the credit advanced for the bank bailout) but because it is not part of the Fed’s mandate. If Congress wants the Fed to advance credit to local governments, he said, it will have to change the law.
The states are on their own. Policymakers are therefore considering a variety of reforms designed to increase bank lending, particularly to small businesses, the hardest hit by tightening credit standards. One measure that is drawing increasing interest is the creation of a bank modeled on the Bank of North Dakota (BND), currently the only state-owned bank in the country. The BND has a 92-year history of safe, secure and highly profitable banking. North Dakota has the lowest unemployment rate in the country; and in 2009, when other states were floundering, it had the largest budget surplus it had ever had.
Eight states now have bills pending either to form state-owned banks or to do feasibility studies to determine their potential. This year, bills were introduced in the Oregon State legislature on January 11; in Washington State on January 13; in Massachusetts on January 20 (following a 2010 bill that lapsed); and in the Maryland legislature on February 4. They join Illinois, Virginia, Hawaii, and Louisiana, which introduced similar bills in 2010. The Center for State Innovation, based in Madison, Wisconsin, was commissioned to do detailed analyses for Washington and Oregon. Their conclusion was that state-owned banks in those states would have a substantial positive impact on employment, new lending, and state and local government revenue.
State-owned banks could be a win-win for everyone interested in a thriving local economy. Objections are usually based on misconceptions or a lack of information. Proponents stress that:
Other states could realize similar benefits, if they were to form banks on the BND model. Paying interest to coupon clippers on state and municipal bonds means sending money out of the state on a one-way trip to Wall Street. Having a state-owned bank allows the state to keep its money local, flowing into the state treasury and the local economy.
Ellen Brown is an attorney and the author of eleven books. In Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free, she shows how the Federal Reserve and "the money trust" have usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are webofdebt.com, ellenbrown.com, and public-banking.com.
Ms. Brown's stories are republished in the Baltimore Chronicle with permission of the author.
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Baltimore News Network, Inc., sponsor of this web site, is a nonprofit organization and does not make political endorsements. The opinions expressed in stories posted on this web site are the authors' own.This story was published on March 27, 2011.