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State-Owned Banks: A Win-Win for State Budgets and Local Economies

7 ways state-owned banks could help states overcome budget deficits and boost their local economies.

by Ellen Brown

Cut spending, raise taxes, sell off public assets—these are the unsatisfactory solutions being debated across the nation, but the budget crises that nearly all the states are now suffering did not arise from too much spending or too little taxation. The crises 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 two percent 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.

http://www.yesmagazine.org/new-economy/a-choice-for-states-b...

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Can Your Imagine,

Life without usury, i.e. interest on money.

Think about this, whether you have state bank or private banks, on how do they recover cost of their service without charging interest. So that the debt remains stable and does Not move with time. The state bank and the private bank could even be competing, without placing restrictions on each other, and pursue lawful transactions.
Visualize and call it not utopia, innovate, come up with a formula, that can
avoid this = http://www.usdebtclock.org/

Stop - Central Banks Are Anti-Freedom - Whether Gov or Private

It's a central statist/socialist tenet to have control of ALL commerce through a "central bank".

Ron Paul discusses Individual Freedom! There should be NO CENTRAL BANK MONOPOLY!

It doesn't matter whether those statists running a Central Bank are "private" or "government officials" - both will take away our freedoms.

NO Government should have control over ALL commerce through a "better" Government-run Central Bank.

Private FED monopoly over a central bank, or a Government monopoly over a central bank???

What's the difference? None. They're both CENTRAL BANKS!
Both are anti-individual freedom, statist/collectivist dreams (which is why Lincoln loved the concept...)

As Hayek stated:

"To be controlled in our economic pursuits means to be controlled in everything."

Tried to get people jazzed about State Banks last election

http://freeindependentsun.com/permanomics/the-state-bank-nor...

It's a great platform for Governors and state reps.

Jack Wagner

I Would Imagine - What Governor or Rep Wouldn't Want That Power

Yeah - I would suppose that Governors and State Reps would LOVE the concept - it's a Collective Bureaucrat's dream!

It's a central statist/socialist tenet to have control of ALL commerce through a "central bank".

Ron Paul discusses Individual Freedom! There should be NO CENTRAL BANK MONOPOLY!

It doesn't matter whether those statists running a Central Bank are "private" or "government officials" - both will take away our freedoms.

NO Government should have control over ALL commerce through a "better" Government-run Central Bank,

Private FED monopoly over a central bank, or a Government monopoly over a central bank???

What's the difference? Both are anti-individual freedom, statist/collectivist dreams (which is why Lincoln loved the concept...)

As Hayek stated:

"To be controlled in our economic pursuits means to be controlled in everything."

Again I post

CAFR1.com Please see Walter's response to Ellen.

CAFRMAN.com Be sure to see THE CAFR NETWORK

No - Gov. "Collective Monopoly" Same As FED "Private Monopoly"

No.

Government "officials" are no more qualified to place under dictatorial "control" (because of their "superior intelligence"...?), ALL the commercial activity in the USA as a "collective monopoly", rather than the private FED bankers and their government-enforced "private monopoly".

Is a collective monopoly better than a private monopoly??? Let's get rid of both, and provide Individual Freedom.

Instead, there should be NO monopoly on the generation of TRUE money (ie., NOT fiat "currency").

Money is another asset (like cows, iron, corn, oil, plastic, etc. etc) - just in the best "medium of transfer" form, for multi-party trade.

This the (primary) reason gold and silver have always been money - they are ASSETS, which exist de facto, - i.e., "already" of value, and not a "promissory note" of debt to be "paid" (or not...) in the future.

The US Constitution and the Coinage Act of 1791 made clear the relationship between government and private assets (including TRUE money).

The Government was only to "standardize" gold and silver assets owned by private citizens, by "coining" them - i.e., weighing them, assaying them, and making into coins, the holder's gold and/or silver.

Money, including gold and silver, (and especially not some regulated phony fiat-currency), were NOT, NOR EVER to be "created" by Government.

Private citizens, holding their own assets, including their own MONEY, was always the intent by the Framers.

Don't be confused - the Federal Reserve is a government-enforced monopoly on the generation of debt-notes, created in a fractional-reserve (ponzi-multiplied) fradulent fashion. Government protects their "legal tender" enforced use of their debt notes.

This, and their fractional-reserve fraudulent pyraminding, are reponsible for this "private group" to accumulate the world's untold wealth.

A "collective monopoly" of Government creating "currency" would be no better than a "private monopoly" of Federal Reserve bankers doing it. Don't get me wrong - the FED is just as bad (or worse) than a Government-generated fiat note.

Both are tools for Collectivists to create a future of Global Feudalism for Americans and the world.

If commodities were not backing...

the currency, then the amount of currency in circulation should probably be based on population, production. I heard Peter Schiff say something to that effect.

Naysayers need to read the article

and think a little before commenting.

I read. I thought.

I have read all the Ellen Brown articles I intend to read.

I say Nay.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

Okay

I respect your comments over several years and missed your presence a while back. You may not like Ellen Brown, but you have to study North Dakota as they are a successful outlier. Is it their state bank or something else?

Oil maybe?

They have been fracking the dickens out of Dickinson.

http://www.youtube.com/watch?v=CroMuF6kyy8

new record for oil production every month

They collect a lot of agricultural subsidies in ND

Military Bases too.

But in 2010 State deficit $327 per capita. Hmmm
http://money.cnn.com/news/storysupplement/economy/state_debt...

Free includes debt-free!

Just what we need...

...50 "mini-feds" creating bank credit out of thin air backed by nothing. Like I said, we tried this before. It led to Hyper-Inflation and the phrase, "Not worth a Continental". It' also led to the collapse of the first Government of the United States...wait a minute, maybe this is a good idea after all!!! (sarcasm)

Funding is not out of thin air

Funding is all state revenue. No money printing here. County and municipal goverments can use the state bank OR local banks.

Sarcasm alert?

It's a fraudulent system. What's to think about?

Free includes debt-free!

This idea has been tried before...

...and it's not worth a Continental!

Ellen Brown's solutions came

Ellen Brown's solutions came be summed up as this: out of frying pan and into the fire. Gary North has dissected here plan:
"Cheerleader for Hitler's Economics"
http://www.lewrockwell.com/north/north891.html
"Ellen Brown's Web of Debt Is an Anti-Gold Currency, Pro-Fiat Money, Greenback, Keynesian Tract."
http://www.garynorth.com/public/department141.cfm

Even the pro fiat money crowd at the American Monetary Institute (Kucinich, Michael Hudson, Steven Zarlenga) reject her proposals for state banking.

Response to Gary North

My main focus is the need for monetary reform, which can achieve these important goals, among others –

– shift the money power from the creation of a national “debt supply” through parasitic bank loans – a power now held chiefly by Wall Street — to a non-debt money supply created as a public service, operated by and for the benefit of the people.

– provide public benefits including the elimination of the national debt and its interest payment of ~$400 billion/year.

– make the government the employer of last resort, creating full employment and falling prices due to wise investment of this labor (infrastructure, education, etc.).

– create credit at cost as a funding mechanism for public services/goods, with state-level credit creation an important option.

– provide total benefits of at least a trillion dollars a year that we can quickly calculate, and probably more.

Now to your piece. This is my favorite part:

“As of early October, 2010, a Google search for ‘Ellen Brown’ and ‘Web of Debt’ generated close to 600,000 hits. This is huge.”

http://webofdebt.wordpress.com/response-to-gary-north/

Follow me on Twitter for breaking news from a libertarian perspective

www.twitter.com/AbolishTheFed

Banks Create Money

Private banks create all of our money as debt - which they create for virtually free by adding account entries. ALL of our money is temporary, it is created as debt and as the principal is repaid the money is destroyed.

Why shouldn't the people create their own money? Far too many get hung up on the specie of currency and ignore the much more important point - who and how is it issued?

Public banks afford the people the same rights as private banks in creating new money.

Larry

END the FED before it ENDS US

Beneficial,

with zero %, i.e. no interest,
the loan/principal is repaid over time and the built-up asset or public facility remains. Its fair to all.
This way the bank becomes a public service institution, instead of an extortionist.

If the new money is created by the community bank it can be in the form of a receipt,- a promise to pay something real, anything that is produced in the area by community themselves, e.g. wheat, cement, iron, gold, cotton, etc., = something that does not perish quickly, but is useful and has real exchange value. Any fake money like the U$ dollar would be unfair. $ loses value due to inflation, secondly its fake, after Nixon refused to honor the pledge, $34 = 1 oz gold.

Another Completely False Paradigm

Let's take a moment to look at the structure of the One World Government and see if this "State Banks" thing puts any power back in our hands.

The U.N. was created as a cover for the IMF (international monetary fraud for those of you new to DP).
The Federal Reserve was created to launder money for the Private owners of U.S. Government Corp. The STATE OF TEXAS was created by U.S. Government Corp. to collect revenue for U.S. Government.
So if STATE OF TEXAS works for U.S. Government, and U.S. Government works for the Federal Reserve's owners, and the Federal Reserve is owned by the IMF Banksters then if STATE OF TEXAS sets up a Bank it would be a branch of U.S. Government which is a collection agent for the Federal Reserve which is a money launderer for the IMF Banksters.

How exactly is this any different than what we have now?

Other than just adding another layer of bureaucracy to the IMF Banksters collection and money laundering system. Your STATE Bank would be collecting interest from you for non existent money they never loaned you and sending it in to the Federal Reserve and from there to the IMF.

What is this, some sort of multi-level marketing con?

Let me answer, YES.

Are you really going to fall for it yet AGAIN?

If so, hey have I got a great deal for you on self heating farmland in Northern Japan. Guaranteed to stay hot for 23,000 years! Only a million dollars an acre, get it while it's hot.*

*(limited time offer, subject to availability (which shouldn't be a problem), offer open to any U.S. Resident foolish enough to have signed up for "Social Security")

The Oracle

Ellen Brown is a clueless

Ellen Brown is a clueless Greenbacker. More paper masquerading as money will not help an economy.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

Hey, I've got an idea!

How about state-run auto sales and construction? Get the greed out of these two important sectors of our economy, let the state make the profit, and hire people based on need and diversity goals. What a great win-win solution!

New Hampshire and Ecuador.

pork aportionment

Why go partial pig, when you could go whole hog?

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

To some your plan.is without sarcasm.

That said, we can all be thankful that we already have a department of motor vehicles.

Free includes debt-free!

How About A Bank That All The Taxpayers Own?

States have a tendency to select bosses that are not doing things in the best interests of the whole population, and it becomes a crony operated bank.

It seems to me that a state run bank should draw up a plan that can be modified, like our Constitution, to benefit all members of the state in an equal manner.

As a former member of an investment club I saw first hand exactly how a like minded financial club operated successfully for many years.

beesting

Owned

The way the "taxpayers" own the Fed? And the DHS? DOD? DOJ? SEC? FEC? WTF? Taxpayers do not own the government. No one does. (The banks effectively run the government, but that is a different matter.)

Milo Minderbinder comes to mind. "And everyone has a share."

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

Right !

But if a group of taxpayers wrote up a bank charter and approved it themselves, they would then get a business license and run it like any other business.
Of course the banks, politicians, IRS, etc. would oppose them, so don't call it a bank, call it a private company.

beesting

Not seeing competition in this plan.

What drives the organization to maintain or improve customer service?

Free includes debt-free!

State fidelity

Successful in North Dakota for over 90 years. More than $1B in surplus and 3% unemployment. Now ND wants to eliminate property taxes. If the weather weren't so wretched.....