Local Gov’t Stories, Events
08.15 RIDE FOR THE OVERRIDE
Ref. : Civic Events
Ref. : Arts & Education Events
Ref. : Public Service Notices
Books, Films, Arts & Education
12.01 What Trump Really Means When He Talks About "Government Schools" [stupid is as stupid does: private prisons worked so badly, they want to privatize schools too]
Ref. : Letters to the editor
Health Care & Environment
12.03 Nikola One hydrogen-powered semi is tall, different and zero-emission [Embrace science, Donald. It's the only way to save your presidency]
12.03 Scientific Knowledge Sorely Lacking at Breitbart-Tweeting House Science Committee ["Stupid is as stupid does." – Forrest Gump]
12.02 Martin Shkreli branded an 'attention seeker' as Sydney student hits back [0:49 video]
12.02 Congress Nears a Breakthrough on Medical Research Funding [welfare for the most profitable companies in the world]
News Media Matters
US Politics, Policy & 'Culture'
12.02 TRUMP WARNS THAT COMPANIES SHIPPING JOBS OVERSEAS WILL BE SLAPPED WITH ENORMOUS BRIBES [Fact that only looks like parody]
Economics, Crony Capitalism
12.01 How to Hide $400 Million ["Ideal," thinks Trump. This tax-shelter system using deregulation loopholes in many tax-havens enables vast worldwide corruption]
11.26 Capitalism in One Family
11.30 Reach out, raise money or remove: how should cities deal with street begging? [an unresolved public health care opportunity...?]
11.28 Britons could pay for EU citizenship after Brexit, says top negotiator [Let's get rid of nation states and allow everyone to be Earth Union (EU) citizens instead!]
11.28 'Holocaust on ice' dance by wife of Putin official causes uproar [8:08 video; an excellent performance]
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.