Public Banking Conference: June 2-4, 2013 – State budget deficits can end forever

Ellen Brown explains a state-owned bank for California:

Public Banking Institute is having our 2013 conference in San Rafael (Northern California) on June 2, 3, 4 to publicly present solutions in banking and money worth tens of trillions of dollars to Americans.

You literally have nothing more valuable to attend to (registration info here).

Among public banking’s available benefits:

State budget deficits end forever: Let’s examine the power of a public bank in a state-owned model for the example of California to end its budget deficit instantly and forever.

California Governor Jerry Brown claimed last year that California had no option but to severely cut public services to address a state budget deficit of ~ $16 billion:

“You name it, and we’ve got to cut it.”

California could be its own bank to issue interest-free credit to itself for no budget deficit, similar to what North Dakota does as the only state with increasing budget surpluses. Governor Brown knows of this option; he vetoed the bill to document the benefits.

In context of the above bullet points, a state bank has powerful and obvious advantages for self-funding beyond at-cost credit issued to itself:

  • Florida economist and Governor candidate Farid Khavari documents that 2% mortgages, 6% credit cards, and 3-4% commercial and vehicle loans would replace all state taxes. A floating interest rate could also cover state budget deficits.
  • California’s Comprehensive Annual Financial Report (CAFR) shows ~$100 billion in surplus taxpayer accounts that dwarf the $16 billion budget deficit. California also has ~$500 billion in claimed “investments” for pension costs. But the state received only $1 billion net from $500 billion “invested” (one-fifth of one percent) while Wall Street investors received over $2 billion in fees. The entire state has ~14,000 different government entities with CAFR taxpayer surplus totals conservatively data-sampled at the game-changing sum of $8 trillion ($650,000 surplus assets per California household). The idea of a state budget deficit in light of this sum is tragic-comic!
  • Monetary reform creates debt-free money to directly pay for public goods and services. Because infrastructure returns more economic benefits than costs, we have astounding triple benefits: government could become employer of last resort for infrastructure investment (creating full employment), falling prices because economic output increases more than infrastructure investment cost, and the best infrastructure we can imagine. Creating debt-free money is certainly another tool to end state budget deficits (documentation here, here, here).
  • Being on a roll for Truth also frees other money: unlawful US wars can end, poverty can end that also increases productivity, and trillions of more dollars returned in the broader economy from other areas of parasitic oligarchic behaviors “covered” from public understanding by corporate media.

Each of the bullet-point topics will have its own article to explain in detail within the context of public banking, along with an open letter to economics teachers/professors, and a final call to the public for their action. Those links will be added at my hub articles at Washington’s Blog and Examiner.com as I complete them.

 

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  • Honest Harry’s Used Cars

    Admittedly, central banking has left much to be desired of late. It’s part of the territory, when you run a credit-based economy, and easy credit is being primed by government money printing.

    That taken as a given, I fail to see how anyone can embrace yet another scheme conjured-up by some self-professed economist that is glowingly endorsed by an alternative media blogger like the Examiner’s Carl Herman. Too much time on your hands, Carl?

    How could anyone agree with Ms Brown looking at California, and say or think, “Well, Ms Brown is right. If we just give these corrupt state legislators in Sacramento the right to coin their own currency, the world will be saved from the greed and stupidity of other politicians and their central bankers -who have created this mess.” Huh? How is that solving anything?

    It’s not as if California’s state politicians have a reputation for sound fiscal responsibility. The article is in essence recommending that the printing presses be given over to these spendthrift ne’er-do-wells. We all should sooner recommend their tar and feathering. (I’m in northern Maine, so there’s no threat implied there.)

    Isn’t this printing-presses-for-state-legislators idea just going to create more money printing?

    Yes, it is.

    This new printing-press idea being bandied about -will only create more money out of thin air. The source of that money will be the will, whim and fancy of state officials in Sacramento.

    Well, hooray! We’re saved!

    There’s nothing rational about this article.

    Someone has again been smoking too much dope.

    Elsewhere in the world of alternative media, there are now countless state politicians being heralded for recommending and petitioning for the legalization of marijuana. Great! They say legalization of marijuana will solve their state’s fiscal woes. Sure it will. Maine has a separate snack food tax.

    Sorry, folks- The last time I checked, people who smoke marijuana don’t contribute a whole hell of a lot of anything to society but flatulence and insanity. Dopers typically are net consumers of tax revenues. These dopers call themselves economists, environmentalists, geniuses, or God, when they’re out on parole, being released from a mental institution, or in a half-way house -headed either back-in or back-out.

    Dopers typically recommend fixes for the unstoppable in the universe, like deflationary depressions brought about by way too much money printing.

    Check your facts with some genuine critical thinking, before you endorse the sort of mindless twaddle that is written by Ellen Brown.

    And no one in their right mind wants these dope-primed scoundrels to be walking around town with enough legal dope in their pocket to get every at-risk, fourteen year old kid stoned on Friday night.

    The kids need more physical activity, not more dope.

  • Honest Harry’s Used Cars

    Admittedly, central banking has left much to be desired of late. It’s part of the territory, when you run a credit-based economy, and easy credit is being primed by government money printing.

    That taken as a given, I fail to see how anyone can embrace yet another scheme conjured-up by some self-professed economist that is glowingly endorsed by an alternative media blogger like the Examiner’s Carl Herman. Too much time on your hands, Carl?

    How could anyone agree with Ms Brown looking at California, and say or think, “Well, Ms Brown is right. If we just give these corrupt state legislators in Sacramento the right to coin their own currency, the world will be saved from the greed and stupidity of other politicians and their central bankers -who have created this mess.” Huh? How is that solving anything?

    It’s not as if California’s state politicians have a reputation for sound fiscal responsibility. The article is in essence recommending that the printing presses be given over to these spendthrift ne’er-do-wells. We all should sooner recommend their tar and feathering. (I’m in northern Maine, so there’s no threat implied there.)

    Isn’t this printing-presses-for-state-legislators idea just going to create more money printing?

    Yes, it is.

    This new printing-press idea being bandied about -will only create more money out of thin air. The source of that money will be the will, whim and fancy of state officials in Sacramento.

    Well, hooray! We’re saved!

    There’s nothing rational about this article.

    Someone has again been smoking too much dope.

    Elsewhere in the world of alternative media, there are now countless state politicians being heralded for recommending and petitioning for the legalization of marijuana. Great! They say legalization of marijuana will solve their state’s fiscal woes. Sure it will. Maine has a separate snack food tax.

    Sorry, folks- The last time I checked, people who smoke marijuana don’t contribute a whole hell of a lot of anything to society but flatulence and insanity. Dopers typically are net consumers of tax revenues. These dopers call themselves economists, environmentalists, geniuses, or God, when they’re out on parole, being released from a mental institution, or in a half-way house -headed either back-in or back-out.

    Dopers typically recommend fixes for the unstoppable in the universe, like deflationary depressions brought about by way too much money printing.

    Check your facts with some genuine critical thinking, before you endorse the sort of mindless twaddle that is written by Ellen Brown.

    And no one in their right mind wants these dope-primed scoundrels to be walking around town with enough legal dope in their pocket to get every at-risk, fourteen year old kid stoned on Friday night.

    The kids need more physical activity, not more dope.

    • http://www.facebook.com/people/Carl-Herman/100000930261713 Carl Herman

      “Honest”ly, Harry, you pose a strawman argument. I agree with you that any technically sound solution, as I factually assert what I write is, would be corrupted in current political and media conditions. That is why I so often argue for arrests of our leaders for their obvious crimes in unlawful wars and looting-based economics.

      Thank you for your “twaddle” and “dope” testimony, “Honest,” and your admonition for people to exercise genuine critical thinking.

      • gozounlimited

        ‘Twaddle’ fails to realize that a sovereign State Central Bank would balance World Banks and provide access to the little guy that doesn’t qualify for the banksters hedge funds. (Especially since we are the 8th largest economy in the world)

        • Honest Harry’s Used Cars

          Letting Sacramento print more money for the “little guy” is not the answer, any more than letting Sacramento seize depositor bank accounts would be the answer.

          All these supply-sider theorists (including Ellen Brown) think they have the solution. They are all delusional. The universal solution of economists is more stimulus, only a more “fair” stimulus, better targeted at the cancer of a bad economy.

          No stimulus is fair. The cancer is caused by the stimulus regimen. It’s just silly to think any stimulus could be fair or healthy.

          The solution is found in understanding no matter whose idea stimulus is, because of human nature, it will always be corrupted. Stimulus solves nothing and incentivizes negative attributes in an economy -in both good times and bad times. That’s why we are where we are. The tools of the FED are ineffective over the long run.

          Strong economies grow like weeds in a vacant lot.

          • http://www.facebook.com/people/Carl-Herman/100000930261713 Carl Herman

            With all respect, the subject is how what we use for money and credit is created. The way we have now creates what we use for money as debt, with private banks creating it. The result of this mechanical system is increasing aggregate debt that can never be repaid. This is one subtopic I introduce in this article for the purpose of ending state budget deficits.

            Critical thinking and professional cost-benefit analyses will show the advantages of public banking versus our current system, if you care to use them.

            I’m sorry, Harry, but with all good heart and humor I have to jest: you’re now promoting growing weed for a strong economy???

            We’ll see what happens with human nature when we have victory, Harry.

          • Honest Harry’s Used Cars

            You’ve been duped by the current regime into believing debt is something it isn’t.

            I am saying the term “debt” has been redefined by the FED. The FED is creating a mess, but it’s not truly what is historically thought of as “debt”. The FED has created something that is other-worldly in economies. It is not anything we should take as being encompassed by the term “debt”. It’s something else, idiotic.

            The term “debt” has been applied to what the FED has been doing by bloggers and alternative media gobbledegook-blabbermouths too. Again, what the FED is doing is not debt in any conventional sense. A new term is needed. All this bailout money is not “debt”. It’s only “debt” because the nitwits who discuss it have no better term for what is going on.

            Critical thinking has hit a new low in the age of the alternative media. It has hit a new low, because everyone in the alternative media thinks they’re an expert, when they’re merely parroting what they’ve read elsewhere -too proudly believing their ability to mimic to be the sign of their genius.

            Debt used to be -when banks (or individuals) loaned out (depositor) funds. The slow change in this “debt” concept came to fruition under the age of fractional reserve banking. We are long past the age of fractional reserve banking. Every bank in the country is bankrupt, if we call in all the loans they’ve made, loans that came about not due to depositor funds, but rather are due to free money coming from the FED and the Treasury.

            Debt has been redefined to be when banks loan out newly printed FED money. No one can loan out their own funds any more. Money isn’t worth anything because the FED has monopolized and destroyed the function of debt and changed “debt” into something other than “debt”.

            Debt involves risk to the creditor. The FED accepts no risk when it prints money. So this is not debt in any conventional sense.

            What you and Ellen Brown are both advocating is to accept what the FED is doing, and take it one step further. You both accept what the FED is doing, without understanding that the FED gas redefined “debt”. So, you each have missed the problem and the solution.

            You and Ellen Brown are advocating changing what debt is yet again, while simply accepting what the FED is doing is just creating more debt. You want to make matters worse than they are already for savers and wage earners, who get next to nothing for a rate of return on the capital they accumulate.

            It’s weak minded, mealy mouthed know-it-alls who have let the economy become subverted by these seat-of-the-pants FED actions. You’ll attain no victory. The economy is being flushed down the toilet by the FED actions. You’re simply asking for your own chance to pull on the flush handle too.

            Every step you take, and every word you write, puts you and your kind further into the entrapment of the maw of the idiocy inherent to the FED stimulus action.

            Your dull and uninspired attempt at humor, clearly indicates you have no understanding of how capitalism works. Capitalism is not dependent on FED actions. Capitalism is not dependent upon the FED rate. Capitalism is not dependent on fractional reserve banking or free money printed by the FED.

            You and Ellen Brown should go out and start a business. You and she should work that business for forty years. And then -based on your learned-experience- you and she can come back to recommend what changes need to be made to the economy to get us out of the FED toilet-economy.

            Because right now, between the two of you, you might have the learned-ability of that boob Tim Geithner. You both think it’s all so damned easy.

    • john Doe

      Honest Harry’s paid commentary, riddled with ad hominems and rampant stupidity, fails to realize that we elect state officials, but we don’t elect corporate bank CEO’s. Warren Harding would be proud of you Harry, “Less gov’t in business, more business in gov’t,” right Harry? You should probably lay off the crack and start smokin’ more “dope”.

  • gozounlimited

    Oh Yes You Did! ….. Boom Boom Boom ….. Bang Bang Bang ….. http://www.youtube.com/watch?v=nZWQN0n8x00&NR=1&feature=endscreen

  • charlestonvoice

    Legalized (but not moral) Govt Crime: CAFR SCHOOL: Schools and Lottery (RIM of the World Unified School District Expose)

    http://chasvoice.blogspot.com/2013/04/legalized-govt-crime-cafr-school.html

  • jadan

    Honest Harry is typical: trust government to handle your money? How
    dumb can you get? On the other hand when we take a look at our private
    monetary system called “Federal Reserve”, we see that it is in a state
    of collapse. The reason it nearly brought the economy down in ’07 is
    because it is utterly corrupt. And the reason it is so egregiously
    corrupt is that it operates in secret without meaningful government
    regulation and oversight. Our government is itself a corrupt body that
    operates largely in secret, with black budgets and insider dealing that
    cause the public to mistrust it and become cynical like Honest Harry. He
    talks about “government money printing”, and he shows how little he
    understands our financial system. It is the Federal Reserve that is
    creating this money supply. Our government does not control this
    process. This is done by a private banking system over which the
    government has very little meaningful control.

    Government can be effective when people get involved. Once upon a time it helped
    create a thriving middle class. Government regulation of the financial
    system following the collapse of the so-called free market in 1929 kept
    it from destroying itself and made it more equitable so that ordinary
    Americans could achieve the world’s highest living standard post WWII.
    When Ronald Reagan came along with his mindless free market ideology,
    the deregulation began that led to the debacle of ’07-’08. The economy
    has not recovered because it cannot overcome the burden of debt that has
    been created by an unregulated private financial system that does not
    operate in the public interest.

    We need to eliminate the Fed and implement a public banking system that is transparent and accountable. Unfortunately, this is not what Ellen Brown and the Public Banking Institute are trying to do. They propose to create state banks based on the model of the Bank of North Dakota. This is not monetary reform because the Fed remains in place. This will not get us out of the web of debt because the private banks will continue to create the money supply from nothing and charge interest for the use of their money. It is their money. It is not the peoples’ money. We the people are charged interest for the use of it. So long as the FRN is the “coin of the realm”, real public banking cannot exist. The Bank of North Dakota is not a public bank. A genuine public bank creates genuine money, not debt. The greenback was real money. The federal reserve note is debt.

  • jadan

    Honest Harry is typical: trust government to handle your money? How
    dumb can you get? On the other hand when we take a look at our private
    monetary system called “Federal Reserve”, we see that it is in a state
    of collapse. The reason it nearly brought the economy down in ’07 is
    because it is utterly corrupt. And the reason it is so egregiously
    corrupt is that it operates in secret without meaningful government
    regulation and oversight. Our government is itself a corrupt body that
    operates largely in secret, with black budgets and insider dealing that
    cause the public to mistrust it and become cynical like Honest Harry. He
    talks about “government money printing”, and he shows how little he
    understands our financial system. It is the Federal Reserve that is
    creating this money supply. Our government does not control this
    process. This is done by a private banking system over which the
    government has very little meaningful control.

    Government can be effective when people get involved. Once upon a time it helped
    create a thriving middle class. Government regulation of the financial
    system following the collapse of the so-called free market in 1929 kept
    it from destroying itself and made it more equitable so that ordinary
    Americans could achieve the world’s highest living standard post WWII.
    When Ronald Reagan came along with his mindless free market ideology,
    the deregulation began that led to the debacle of ’07-’08. The economy
    has not recovered because it cannot overcome the burden of debt that has
    been created by an unregulated private financial system that does not
    operate in the public interest.

    We need to eliminate the Fed and implement a public banking system that is transparent and accountable. Unfortunately, this is not what Ellen Brown and the Public Banking Institute are trying to do. They propose to create state banks based on the model of the Bank of North Dakota. This is not monetary reform because the Fed remains in place. This will not get us out of the web of debt because the private banks will continue to create the money supply from nothing and charge interest for the use of their money. It is their money. It is not the peoples’ money. We the people are charged interest for the use of it. So long as the FRN is the “coin of the realm”, real public banking cannot exist. The Bank of North Dakota is not a public bank. A genuine public bank creates genuine money, not debt. The greenback was real money. The federal reserve note is debt.

 

 

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