To balance its budget, fund its obligations and keep from having to raise taxes, Florida should follow the model of North Dakota and Charter its own state bank.
North Dakota has had a state bank, which by charter, must contain all the state's funds, and which, Ellen Brown tells us, "was established by the legislature in 1919 to free farmers and small businessmen from the clutches of out-of-state bankers and railroad men." The bank has met its purpose fabulously. Today, North Dakota is running its biggest surplus in its history.
Bank capital reserve requirements are only 8%. If Florida used 8% as a baseline, then the state could deposit its expected FY 2010 $66.5 billion in revenues this year into the state bank, and, through the magic of fractional reserve lending, and possibly using a network of partner banks, have over $665 Billion to loan! The state's independent commercial banks would howl. Let them. They set the rules, now they have to play by them. Besides, who do you trust more to fund a bank: the depositors and borrowers of the bailed-out TBTF Banks of Florida (or, in remote deposits, New York), or the citizens of the state who must pay taxes every year?
Florida has never defaulted on its obligations; while 17 state banks have been closed by the FDIC in 2009-2010...so far, a new record for the state.
If this new State bank which could operate as a non-profit, with no shareholders to please were to distribute its fund to the state's smaller banks, in order to issue new loans to strapped homeowners at, say an inflation-realistic rate of 2%, still far below current bank rates of over 5% on 30-year mortgages, they could refinance defaulting homeowners, fund startups, and even fund general government expenditures, all without paying a dime in interest to private bankers!
Democratic Gubernatorial Candidate and economist Farid Khavari has made creating a State Bank as a centerpiece of his platform: www.khavariforgovernor.com. As Khavari explains, this new bank would charge only 2% for a 15-year home loan and use the proceeds to "Become the engine to drivean economic miracle in the State of Florida, bringing general prosperity and economic security for all Floridians."
The next Florida Governor must balance the budget under the state constitution. But, there is another option besides crippling taxes and devastating spending cuts. There is a way to balance the budget, create a surplus, and tell the high interest charging banks "Go Jump in the Everglades."
Sign the Petition to CREATE A STATE BANK in Florida!
**** UPDATE ****
Don't forget about the similar petition to CREATE A STATE BANK in California - 600 signatures strong so far!
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