DEBT DIAGNOSIS

It’s all about Banking.

A Sec­ond Amer­i­can Rev­o­lu­tion? More than 80 years ago, Wall Street trig­gered the Great Depres­sion and cast mil­lions into poverty and despair.  The capac­ity of the states and local gov­ern­ments to deal with the cat­a­stro­phe was over­whelmed.  Pres­i­dent Franklin D. Roo­sevelt used the fed­eral gov­ern­ment in ways never before seen or imag­ined to res­cue the Amer­i­can peo­ple. Today, Amer­i­cans are liv­ing through a Sec­ond Great Depres­sion, again brought on by Wall Street.  Tens of mil­lions endure great hard­ship and depri­va­tion.  There is no res­cue in sight from what one observer rightly called “a slow mov­ing social cat­a­stro­phe.”   Now, Wash­ing­ton is pow­er­less to help.  It is dom­i­nated by cor­po­rate inter­ests and the insti­tu­tions of a fed­eral estab­lish­ment grown so grotesquely large they can no longer act, but only feed them­selves.   But far from Wash­ing­ton a Sec­ond Amer­i­can Rev­o­lu­tion may be under­way, as states from Maine to Cal­i­for­nia move to fill the vac­uum left by a fed­eral estab­lish­ment that can no longer make any cred­i­ble claim to rep­re­sent the broad major­ity of the Amer­i­can peo­ple.   The seeds of this rev­o­lu­tion were planted in North Dakota, in a long ago and lit­tle remarked act of inde­pen­dent and for­ward look­ing Amer­i­cans. It was all about bank­ing.   A few years after its cre­ation the Fed­eral Reserve gave Wall Street effec­tive con­trol of bank­ing, money and credit in the rest of the nation, North Dakota estab­lished a pub­lic bank, inde­pen­dent of the Fed, to insure a steady source of liq­uid­ity and credit for the state’s farm­ers, busi­nesses and fam­i­lies. It has been an engine of pros­per­ity.  Last month the Bank of North Dakota (BND) reported a $2.6 bil­lion loan port­fo­lio of credit and liq­uid­ity injected into the state’s econ­omy and peo­ple, in part­ner­ship with com­mu­nity banks.  The bank also reported another year of record prof­its — $62 mil­lion.  These prof­its belong to the bank’s only share­holder, the peo­ple of North Dakota, and were pro­duced with­out tax­a­tion. That in a state with a pop­u­la­tion of only 670,000.  The bank has also acted as a “rainy day” fund for the state, and when a North Dakota town suf­fered a mas­sive flood and fire, the BND pro­vided emer­gency credit lines to the city. Hav­ing a less expen­sive and read­ily avail­able credit line with the state’s own bank reduces the need for munic­i­pal and county rainy-day funds that are a waste of cap­i­tal; often invested in out-of-state banks, and often at very mod­est inter­est.   And the BND pur­chases munic­i­pal bonds and can fund infra­struc­ture projects, offer­ing dra­matic reduc­tions in the costs of debt ser­vice.   Again this year, almost alone among the states, North Dakota boasts a healthy sur­plus, low unem­ploy­ment, a boom­ing econ­omy and a strong bank­ing indus­try, aided in no small mea­sure by some­thing most Amer­i­cans have never heard of: a pub­licly owned state bank. As states and cities slash spend­ing on even vital ser­vices and beg­gar the future, the Fed­eral Reserve declared that it can­not help with their bud­get prob­lems, although it advanced almost $12.3 tril­lion in liq­uid­ity and short-term loans to bail out Wall Street — an amount 64 times the $191 bil­lion required to bal­ance the bud­gets of all 50 states.   It didn’t mat­ter in North Dakota. On May 2, Trea­sury Sec­re­tary Gei­th­ner announced that the Trea­sury would stop issu­ing spe­cial secu­ri­ties that help state and local gov­ern­ments pay for their debt. It won’t mat­ter in North Dakota. Faced with the endemic fail­ure of the fed­eral estab­lish­ment and the dire needs of the peo­ple, leg­is­la­tors in more than a dozen states have embraced the exam­ple of North Dakota, and fired the first shots in what may become the Sec­ond Amer­i­can Rev­o­lu­tion, intro­duc­ing leg­is­la­tion to form state-owned banks or to study their fea­si­bil­ity. The Cen­ter for State Inno­va­tion per­formed detailed analy­ses for two of those states, Wash­ing­ton and Ore­gon.  Their con­clu­sion was that a pub­licly owned bank on the model of the Bank of North Dakota would have a sub­stan­tial pos­i­tive impact on employ­ment, new lend­ing, and gov­ern­ment rev­enue in those states.   State and even munic­i­pal level pub­lic banks have the poten­tial to direct tril­lions of dol­lars of credit and hun­dreds of bil­lions in rev­enue into locally directed eco­nomic expan­sion, cre­at­ing jobs and build­ing up pros­per­ity — with­out rais­ing taxes and with­out the help­ful hand of fed­eral bureau­crats.   Hyper­bole?  Wish­ful think­ing?  Con­sider Cal­i­for­nia.  The state has the eighth largest econ­omy in the world, and it has a debt bur­den to match.  But as large as California’s lia­bil­i­ties are, they are exceeded by its assets:  immense rev­enues, invest­ments, pen­sions and other funds which are suf­fi­cient to cap­i­tal­ize a bank to rival any in the world.   Fol­low­ing the BND model and adher­ing to the reserve require­ments that the “too big to fail banks” ignored or evaded before they failed, a pub­lic bank in Cal­i­for­nia could be formed with $12 bil­lion in cap­i­tal and $148 bil­lion in deposits, which in turn could gen­er­ate $133 bil­lion in credit for the state.  Such a pro­posal is cir­cu­lat­ing now among Cal­i­for­nia leg­is­la­tors and pol­icy mak­ers. No other state can match California’s abil­ity to cap­i­tal­ize a pub­lic bank.  But in the aggre­gate, the poten­tial impacts of only a dozen state banks are rev­o­lu­tion­ary.  A river of credit, invest­ment and rev­enue, locally gen­er­ated and locally directed, bypass­ing Wash­ing­ton, Wall Street and the Fed.   Now as before, it’s all about bank­ing.   Mike Krauss is a for­mer offi­cer of Bucks County and Penn­syl­va­nia gov­ern­ment and an exec­u­tive in the inter­na­tional trans­porta­tion and logis­tics indus­try. Email: mike@mikekrausscomments.com     Source  http://www.phillyburbs.com/news/local/courier_times_news/news_columnists/it-s-all-about-banking/article_cf9d9ae4-94b7-51c8-b064-232d02205ad4.html   It is the peo­ple who under­stand the enor­mous value of pri­va­tized bank­ing that will bring Amer­ica back into the con­trol of the Amer­i­can peo­ple. Who ever owns the debt, owns the coun­try or owns the per­son. This is an excel­lent exam­ple of pri­vate bank­ing on a state level. What we do is help you open a pri­vate bank for your­self. The more indi­vid­u­als and the more states that own their own debt, the closer we will be to own­ing our own lives and our own coun­try. We the Peo­ple, need to be in con­trol of our own money.   Con­tact me NOW so I can show you how to own your own pri­vate bank­ing sys­tem. 845 – 649-7487.

1. Water Stories: Willmar Wastewater Treatment Plant says:

   May 21, 2011 at 4:57 pm

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