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Health Care & Environment
06.20 ALEC’s Deadly Asbestos Agenda Benefits Koch Industries, Nationwide [the sociopaths are at it again]
06.16 Delhi's air pollution is now so bad it is literally off the chart [an increasingly deadly problem]
06.15 What if Canada had backed wind energy instead of the oil sands? [infographic]
06.10 Microplastics in our mussels: the sea is feeding human garbage back to us [our pollution becomes us...]
News Media Matters
US Politics, Policy & 'Culture'
06.22 As 'Wealthiest and Freest Country in the World,' Nikki Haley Tells Bernie Sanders It's 'Ridiculous' to Examine US Poverty [how underregulated capitalism kills people and entire nations]
06.22 50 Years Later, We Still Have a Dream [how underregulated capitalism kills people and entire nations]
06.21 James Comey: 'You stare at children crying – what kind of people are we?’ [We have stupidly allowed bribery and greed to corrupt government to the point where morality—and what's best for people is totally ignored...is considered too late.]
06.20 Democratic candidates vow to dump Pelosi [if you want single-payer, then corporate Democrats must not have leadership]
06.20 Millions Lack Food, Housing, and Healthcare, But 38 Democrats Just Joined GOP to Spend $716 Billion on Endless War and Empire [it's about pleasing your corporate base for huge “campaign donations”]
06.20 'Morally Bankrupt': After Tax Cuts for Richest, House GOP Unveils $5.4 Trillion Attack on Nation's Safety Net [the sociopaths are at it again]
Economics, Crony Capitalism
06.22 The Unsurpassed Power Trip by an Insuperable Control Freak: An Open Letter to Jeff Bezos [how underregulated capitalism kills people and entire nations]
International & Futurism
06.22 Europe’s democrats must unite to prevent a far-right takeover [how underregulated capitalism kills people and entire nations]
06.20 'Outraged, But Frankly Not Surprised': In Defense of Serial Violator Israel, US Ditches UN Human Rights Council [the sociopaths are at it again]
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.