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WASHINGTON STATE JOINS MOVEMENT FOR PUBLIC BANKING
Taking back control of their finances from the TBTF banks is a great idea for other states to pursue as well. - Ilene
WASHINGTON STATE JOINS MOVEMENT FOR PUBLIC BANKING
Courtesy of Ellen Brown at Web of Debt
Bills were introduced on January 18 in both the House and Senate of the Washington State Legislature that add Washington to the growing number of states now actively moving to create public banking facilities.
The bills, House Bill 1320 and Senate Bill 5238, propose creation of a Washington Investment Trust (WIT) to “promote agriculture, education, community development, economic development, housing, and industry” by using “the resources of the people of Washington State within the state.”
Currently, all the state’s funds are deposited with Bank of America. HB 1320 proposes that in the future, “all state funds be deposited in the Washington Investment Trust and be guaranteed by the state and used to promote the common good and public benefit of all the people and their businesses within [the] state.”
The legislation is similar to that now being studied or proposed in states including Illinois, Virginia, Hawaii, Massachusetts, Maryland, Florida, Michigan, Oregon, California and others.
The effort in Washington State draws heavily on the success of the 92-year-old Bank of North Dakota (BND), currently the only state-wide publicly-owned U.S. bank. The BND has helped North Dakota escape the looming budgetary disaster facing other states. In 2009, North Dakota sported the largest budget surplus it had ever had.
The Wall Street Credit Crisis Is Crippling State and Municipal Governments
That state budget deficits are reaching crisis proportions was underscored in the January 19 New York Times:
[A]lmost everywhere the fiscal crisis of states has grown more acute. Rainy day funds are drained, cities and towns have laid off more than 200,000 people, and Arizona even has leased out its state office building. . . .
“It’s the time of the once unthinkable . . . ,” noted Lori Grange, deputy director of the Pew Center on the States. “Whether there are tax increases or dramatic cuts to education and vital services, the crisis is bad . . . .”
The “once unthinkable” includes not only draconian cuts in services, increases in taxes, and sale of public assets, but now filing for bankruptcy. States are not currently allowed to go bankrupt, but a move is afoot in Congress to change all that. Bankruptcy proceedings would allow states to escape pension and other contractual obligations, following the dubious lead of such megacorporations as General Motors and Continental Airlines.
Meanwhile, fears of state bankruptcy have caused state and municipal bond values to plummet and borrowing costs to soar. As with Greece and Ireland, rumors of bankruptcy become a self-fulfilling prophecy, bringing out the hedge funds and short sellers that turn prophecy into reality.
Addressing the Problem at Its Source: The North Dakota Model
While drastic spending cuts are being proposed and implemented, the states’ woes are not the result of over-spending. Rather, they were caused by loss of revenues and increased borrowing costs resulting from the Wall Street banking crisis. Jammed with toxic assets, derivatives, and the subprime mortgage debacle, the Wall Street credit machine ground to a halt in the fall of 2008 and has still not recovered.
And it is here, in generating credit for the state, that the Bank of North Dakota has been spectacularly successful. By providing affordable, low interest credit for business expansion, new businesses and students, the BND has helped North Dakota sidestep the credit crisis altogether.
The BND partners with private banks, providing a secondary market for mortgages; offers “wholesale” banking services such as check clearing and liquidity support to private banks; and invests in North Dakota municipal bonds to support economic development. In the last ten years, the BND has returned more than a third of a billion dollars to the state’s general fund. North Dakota is one of the few states to consistently post a budget surplus.
Unlike private banks, public banks don’t speculate or gamble on high risk “financial products.” They don’t pay outrageous salaries and bonuses to their management, who are salaried civil servants. The profits of the bank are all returned to the only shareholder – the people.
Washington State Representative Bob Hasegawa, a prime sponsor of the Washington legislation, called the proposal for a publicly-owned bank “a simple concept that will reap huge benefits for Washington.” In a letter to constituents, he explained, “The concept (is) to keep taxpayers’ money working here in Washington to build our economy. Currently, all tax revenues go into a ‘Concentration Account’ held by the Bank of America. BoA makes money off our money and we never see those profits again. Instead, we can create our own institution and keep taxpayers’ dollars here in Washington, working for Washington.”
Hasegawa said a key feature of the Washington banking institution is that it will work in partnership with financial institutions, community-based organizations, economic development groups, guaranty agencies, and others. He said the Washington Investment Trust will offer “transparency, accountability, and accuracy of financial reporting,” a welcome change from the accounting tricks common among the large Wall Street money center banks today.
A public hearing on HB 1320 is scheduled for Tuesday, January 25th, at 1:30pm. The bill is assigned to the Business and Financial Services Committee in the House and the Financial Institutions, Housing & Insurance Committee in the Senate.
For more information on the movement for publicly-owned banks, see http://PublicBankingInstitute.org.
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Ellen Brown wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Ellen is an attorney and the author of eleven books, including Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free. Her websites arehttp://webofdebt.com and http://ellenbrown.com.
Pic credit: Jr. Deputy Accountant
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Yes, the monetary fascism of the Federal Reserve is a crime against humanity, but monetary socialism isn't any better:
"5. Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly."
http://www.hartford-hwp.com/archives/26/manifesto/176-2.html
As for Ellen "Greenbacker" Brown, Austrian (School) economist Gary North has already thoroughly discredited her:
http://www.garynorth.com/public/department141.cfm
Hey DB, I've actually read some of this. I have questions. If The world's central banks own the bulk of the world's gold - literally. Is using gold as currency just playing into their hands?
How does the quantity of money (if it is gold) change to accomodate the growing population - if it's strictly rooted to a finite supply of gold? If the gold is just worth more as the population grows because there is less gold/person doesn't this just increase the worth of the already wealthy central bankers? I'm not trying to rile you, I'm just trying to understand.
I thought we already have socialism, the bank debt is socialized and the profits are private.
Who's gonna start a facebook campaign to bring this issue to their state?
I agree with you Tic. Everything is broken, we need to start all the way over. The BIG stuff isn't working, banks, media, energy, ag, healthcare, government on and on. I welcome real change especially when it's de-centralization. I also like the idea of pm's but when every central bank in the world owns gold I'm looking for another pond to play in. I wish Ellen Brown would chime in here.
There is already a few people who control the money and power. And they are fairly well-acquainted with the political process. so what real difference is there to be concerned about? -or, to say it another way, how exactly could it get any worse?
Sounds great, but is anyone else creeped out just a tad with this? I understand and agree that some level of regulation is healthy, pure laissez faire sounds quite romantic but doesn't seem to work too well in the broader sense. The problem I'm having with this is if the public takes over our banking system, what's next? Energy? Other industries we have issues with? Where does it stop??
Free markets are a two edged sword, there's good and bad together. The trick is how to minimize the bad without giving away the farm. The BND is succeeding by simply playing by the long standing successful rules of a normal Glass-Steagall type banking system.
One point I do like is that the BND is being successfully operated at the State level, keeping the Federal level out of it, which I'm sure is another key factor in its success.
Ohhh. When things get nasty theycan also issue their own currency as well. What a grand idea.
BAD IDEA
Socialism is defined as the government owning the means of production. In this case, the socialism involves the production of loanable funds.
If you like a particular bank, then invest in it with your own money. Don't force others at gunpoint to invest their money in your hare-brained socialist schemes.
"While drastic spending cuts are being proposed and implemented, the states’ woes are not the result of over-spending."
Really?
Bank of North Dakota -- good.
Bank of California - bad.
Glad to see more of this coming about now. Wussington is a liberal state, so this is bipartisan. Better late than never.
Wussington?
Good grief.
I noticed, EB you rock!
Public banking will be more transparent but much less efficient. But I dunno....I've kinda had enough of efficiency. I know that is heresy from a generally free market guy like the trollster, but like the Hazies wrote....I want a trip free life. I've had enough bad trips already thank you.
Theft and Fraud done efficiently is not a good thing.
WS banks are very efficient indeed ... in making obscene bonuses for the bankers, both in good and bad years.
"I've kinda had enough of efficiency" can we be analog/imperfect now? lol wooo hoo!
HELL YES !!!!!!!!
http://www.youtube.com/watch?v=KL-WCKw9jwg LOVE EB been talking up BND for a few years now, now if CA could charter one AND get a PERMANENT FUND like ALASKA's $25 Billion Flush then we'd be all set, let the consumption begin! errr....continue!
http://www.pfd.state.ak.us/
So this is why the 'elite' are always preparing their BUG OUT lands and security...
Hmmm...
Tip to Global Elite: If it can happen anywhere, it can happen everywhere.
What you don't have your BOB, BOV, and fully prepped, armed, and nitro packed for the MZB that will come after you unless you surrender to the warm embrace of the fedghetto?
(bug out bag.....bug out vehicle....nitro pack foods, and mutant zombie bikers, fedghetto...all housing will be owned by feds,packed like sardines, with no freedom, but plenty of soylent green and american idol as long as you agree to live in the designated enclave)
I thought we were all preppers now.
I was topping off the wife's car and filling some five gallon cans at the gas station last night and the guy in front of me sees me and goes "Got ammo?"
Interesting comment, b2b. What corner of the world are you in? Out of curiousity.
San Francisco.
It would be far easier for them to follow the examples of North Dakota and now WA.
THIS IS THE BEST NEWS EVER. GOV. MOONBEAM ARE YOU READING THIS?
moonbeam can't do any worse than that nazi-lover, new world order freak shvatzeneger.
'shvatzeneger' is gone. the old standard disaster Brown is back.
Fantastic article! Thank you so much for sharing. I don't know where Texas has been all these years since 23 DEC 1913, but Davy Crockett must be ashamed in his grave. I am still hoping our esteemed state leaders will heed the call to END THE FED! At least Ron Paul is!