How Our State Can Solve Its Budget Crisis: Create a Public Bank
Cut spending, fire teachers, raise taxes—these are the solutions always proposed to offset Washington State’s budget deficits. Our state’s budget crises do not arise from too much spending or too little taxation on the poor and middle class. Instead, since 2000, corporate tax breaks in Washington State have more than doubled. We simply aren't getting enough tax revenue from corporations (see: realwashingtonstatebudget.info).
Also, since the 2008 financial market collapse, banks have cut back on lending. When small local businesses can't secure low interest loans, there are lay-offs and business closures in the private sector, which also cause state revenues to plummet. To solve this problem, since 2010, 17 states, including Washington State, have drafted legislation to establish public banks based on the successful Bank of North Dakota.
Bottom line: To reboot our economy we will need a fair tax structure as well as a public bank.
There was a public hearing in Olympia this Thursday February 14th at 1:30 pm on establishing the Washington Investment Trust. Our State taxpayers currently send $3 billion per year in needless payments to Wall Street banks on $30 billion in public debt. If we had a public bank, we could save billions of dollars and cut the cost of public projects, such as building schools, in half.
Keep the money in Washington State.... IN Washington State!
You can send emails supporting SB 5029 establishing the Washington Investment Trust. Please put “Yes on SB 5029 WIT” in the subject line. You can keep your comments brief if you want, just something like: The Washington Investment Trust will keep tax money working locally and lower costs for infrastructure projects.
Send these folks a message. Let them know why YOU want a public bank!
Last Updated on Saturday, 16 February 2013 18:19
Have you moved your money yet?
Wall Street Banks make money off of other people's money. A growing movement encourages ordinary people to invest their money in their communities, instead of in the “too big to fail” banks whose risky investments helped tank the economy.
A report from the firm Javelin Strategy and Research found that between November 2011 and January 2012 5.6 million people moved their money out of big banks and into local banks and credit unions.
Watch below to learn how to move your money out of the too big to fall banks and into your local community bank.
A 12 year old girl Victoria gave a 5 Minute Presentation in front of a national conference of 600 people in Philadelphia in April 2012. She describes how private bankers have enslaved the Canadian people. This video has already been viewed by more than 100,000 people… She says “Have you ever wondered why the bankers are becoming richer and the rest of us are not?” The private banks are just like the money changers in the temple of our Democracy.
Please share this incredible video with anyone you know. We can take back control of our economy and our government simply by taking back control of our money system.
David Spring Washington Public Bank Coalition.
Report from Cindy Cole and John Repp on the Public Banking Convention in Philadelphia April 26-28 2012
The Declaration of Independence and the Constitution were written and adopted here in Philadelphia. It is the home of the Quakers, who as a colony, created a monetary system that was stable and prosperous for the people. Naturally, during the conference we had much discussion about our broken money system and how to fix it. In a nutshell: the biggest problem is that money is created as debt and the interest to pay for that debt is compounded over time and must also be borrowed, leading to more debt. Therefore, our system must continue to grow infinitely in a finite system. As we are aware the economic system is coming up against the ecological limits of the earth. Our present economic system also allows for the concentration of wealth in the hands of a few and the system itself is oppressive and destroys democracy. Public Banks are part of the solution. We also heard about local currencies, mutual credit systems, public banks as public utilities, designing monetary systems using bio-systems as a model. All of this and more will be put on the www.Publicbankinginstitute.org web site and Facebook page in the next few weeks. For now, check out this presentation by 12 year old Victoria from Canada, who succinctly describes how private interests have colluded to change the Bank of Canada from a public bank to one that enslaves the Canadian people in debt to the private banking cartel.
Welcome to the Washington Public Bank Coalition
--Dan Leahy, “Introduction to
Which is a Better System for the People of Washington State?
Bank of America
(Where the bulk of Washington state’s tax dollars go)
A Public (state) Bank
(Where none of our state tax dollars go; we don’t have a public bank..yet.)
B of A took dicey home loans (loans they had made to high risk merchant borrowers, and rechristened them as high-grade, AAA-rated securities and sold them off to unions, pensioners, foreign banks, retirement funds and any other suckers the banks could find.
Later a group of these pension and retirement funds, including public employees from Mississippi to Los Angeles, sued Bank of America with misrepresenting the value of more than $16 billion in these mortgage-backed securities. In the end, 2011 B of A paid only $315 million in damages. Actual losses to pension funds are in the billions of dollars.
Meanwhile due to the fact that folks who had been lent money couldn’t make their mortgage payments and B of A didn’t have their paperwork due to their haste to make these loans, B of A unleashed a practice called robo-signing, which drawing up fake documents for court procedures to aid in foreclosing on these folks.
In 2010, a Bank of America robo-signer named Renee Hertzler gave a deposition in which she admitted not only to creating as many as 8,000 legal affidavits a month, but also to signing documents with a fake title. B of A brought tens of thousands of Americans to foreclosure court using this bogus, "robo-signed" evidence.
B of A entered into an $8.4 billion settlement with multiple states over their predatory lending practices. It agreed to provide homeowners with modified loans and promised not to raise rates on borrowers. But no sooner was the deal signed than the bank "materially and almost immediately violated" the terms, according to Nevada Attorney General Catherine Cortez Masto. It jacked up rates on homeowners, and instituted a policy punishing any bank employee who spent more than 10 minutes helping a victim get a loan modification
Interest Rate Conspiracy
Another scheme to hurt people was conspiring with other big banks to artificially lower the London Interbank Offered Rate. (Many adjustable-rate financial products are based on LIBOR – so if the rate goes down, they pay out less to customers who bought those products.). About $350 trillion worth of financial products globally reference LIBOR, says one antitrust lawyer familiar with the case. "Which means," she adds in a striking understatement, "that the scale of this conspiracy is extremely large."
Tax Payers on the Hook for
B of A Speculation
In 2011, the Federal Reserve allowed Bank of America to move a huge portfolio of dangerous bets into a side of the company that happens to be FDIC-insured, putting all of us on the hook for as much as $55 trillion in irresponsible gambles.
Taxes (as in not paying any)
Bank of America didn't pay a dime in federal taxes in 2010 and 2011. In fact, they got a $1 billion refund in 2011. They claimed it was because they had pretax losses of $5.4 billion in 2010. YET---they had paid out $35 billion in bonuses and compensation that year. You do the math.
Bank of America torched dozens of institutional investors with billions in worthless loans, repeatedly refused to abide by contractual obligations to buy them back, evaded hundreds of millions in local fees and taxes, pushed tens of thousands of people into foreclosure using phony documents, ignored multiple court orders to stop its illegal robo-signing, and exploited President Obama's signature mortgage-relief program.
WHAT MORE DO WE NEED TO KNOW TO STOP OUR STATE FROM DEPOSITING OUR TAX MONEY IN BANK OF AMERICA?
The Wall Street Bank System
Public banks are mandated to invest in public infrastructure projects and offer low interest loans to businesses. Money stays in the state. They don’t make risky loans nor do they finagle with rating agencies to lie about their rating. There have been no defaults on loans to municipalities and counties for infrastructure projects in 100 years. The money made in principal and interest repayment is returned to the state’s general fund. To be saved… or used again for public purposes.
Illegal Foreclosures: NO
Public banks do not originate home loans. Instead they partner with other banks to make home loans ONLY to buyers who are good credit-risks. The partnership bank originates the loans and the public bank can increase the size of the loan or bring down the interest rate. In North Dakota, the only state with a public bank, there have been next to no foreclosures.
Interest Rate Conspiracy: NO
Public banks, like regular banks, use leverage (modest leverage) and are able to take advantage of the Federal Reserve Discount Window. There is no Conspiring to raise or lower that interest rate.
Public banks do not engage in gambling like the big wall street banks. There is no derivative speculation. Public banks are like normal boring banks.
Paying Taxes: NO
A pubic bank is a public entity. Public entities, like schools and fire and police departments don’t pay taxes. Basically, a public bank is operated just like a boring bank, but it returns its profit to the state general fund, not to shareholders or bank employees. No profit incentive to a lucky few.
Public Banks are ...
• Viable solutions to the present economic crises in US states.
• Potentially available to any-sized government or community able to meet the requirements for setting up a bank.
• Owned by the people of a state or community.
• Economically sustainable, because they operate transparently according to applicable banking regulations
• Able to offset pressures for tax increases with returned credit income to the community.
• Ready sources of affordable credit for local governments, eliminating the need for large “rainy day” funds.
• Required to promote the public interest, as defined in their charters.
• Constitutional, as ruled by the U.S. Supreme Court
Public Banks are not…
• Operated by politicians; rather, they are run by professional bankers.
• Boondoggles for bank executives; rather, their employees aresalaried public servants (paid by the state, with a transparent pay structure) who would likely not earn bonuses, commissions or fees for generating loans.
• Speculative ventures that maximize profits in the short term, without regard to the long-term interests of the public.
WHAT MORE DO WE NEED TO KNOW TO CONSIDER OUR STATE DEPOSITING OUR TAX REVENUE IN A PUBLIC BANK?
The Public Bank System
The Public Bank System
Here is the resolution that the Washington State Labor Council passed in favor of establishing a Public Bank here in Washington State.
Use this example to write your own Resolution!
RESOLUTION ON STATE INVESTMENT TRUST
WHEREAS, the state-owned Bank of North Dakota, created in 1919, has, for more than 90 years, served to stabilize the economy and meet the banking needs of the people and businesses of North Dakota; and
WHEREAS, during the current severe economic recession, the state of Washington and other states have experienced revenue shortages of billions of dollars, compelling them to make drastic cuts in human services and other essential programs, causing widespread suffering among the people; and
WHEREAS, during this recession,
WHEREAS, since the year 2000, North Dakota’s gross domestic product has grown 43%; its wages have risen 34%; it currently has a $1 billion budget surplus; and it has the nation’s lowest unemployment rate at 3.4%; and
WHEREAS, over the last decade, the Bank of North Dakota, in a state of 600,000 population, has provided a third of a billion dollars to the state’s general fund; and
WHEREAS, legislation introduced in the 2011 session of the Washington State Legislature called for the establishment of a State Investment Trust, an institution with a mission and a method of operation patterned after that of the State Bank of North Dakota; now, therefore, be it
RESOLVED, that the Washington State Labor Council, at its 2011 convention, endorse and pledge to actively support legislation to create a State Investment Trust.
“Imagine financing student aid, industry and community development. Imagine providing access to capital for small businesses, or otherwise leveraging our resources instead of having to do it with tax incentives. Imagine keeping our resources local instead of exporting them as profits, never to be seen again—that’s what this bank could do.”
"All the perplexities, confusions, and distressed in America arise, not from defects in their constitution or confederation, not from a want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation."
---John Adams in a letter to Thomas Jefferson
“When the local people put money in a bank like this, they know that it understands their community and its opportunities. Its loans and activities, in turn, help to further the community's economy.”
--John F. Kennedy
“I sincerely believe, with you, that banking establishments are more dangerous than standing armies.”
--- President Thomas Jefferson 1816