The key reason that communities are struggling is the huge burden of interest payments that are flowing to the big banks. Think about this, if you buy a home for say $100,000 dollars, typically you will have paid $250,000 once the loan is paid off. This means the typical loan will incur $150,000 in interest charges.
The same concept applies when a community builds an infrastructure project such as school, road, bridge, sewer or other project. That $1 million dollar school could end up costing taxpayers in the community $2.5 million after interest charges.
So taxpayers are paying more to the financiers of the project than to those who supplied the materials and actually did the labor to build it. Are you OK with them acting as a middleman sucking prosperity from our communities? Any good business model dictates the efficiency of eliminating middlemen.
If we look at cities like Detroit and Philadelphia, hundreds of millions of dollars in interest payments and fees are leaving the city and flowing into the coffers of Wall St. This lost money impoverishes your community while Wall St gets bigger and richer than ever. The video below describes a solution to this problem.
In a local newspaper I recently read an article regarding how a school district was looking to “refinance” their outstanding bonds in an effort to reduce the interest burden on their debt. In the same issue I read how another school district expends nearly $2,000,000 yearly just to pay the interest burden on their debt.
Clearly our school systems face a considerable interest burden on their debts. It is already a matter of public record that US municipalities, school districts, and pension funds were victims of fraud due to the rigging of the commission bids as laid out in an article called “The Scam Wall St Learned from the Mafia” by Matt Taibbi. Many of these municipalities, schools, or other entities were also the victims of a type of derivative called Interest Rate Swaps where the big banks induced them to gamble with public money on the direction of the market, but the end result was often that the “bet” went bad. A great example of this was Jefferson County in Alabama where the original cost for a sewer project was estimated at $250 million and ended up indebting the county $5 BILLION. Since we do not know all the details, it is difficult at this time to determine specifically how many states, counties, municipalities, and school districts may have been victims of financial fraud which resulted in an increased debt burden paid by the taxpayers as a result of the LIBOR rate rigging scandal that is still unfolding.
Consider this…, when a municipality or school district wishes to do a repair, a capital improvement or infrastructure project, the amount of money paid in interest costs to the financiers exceeds the amount of money paid to those who supply the materials and do the labor on the project. Most people should feel angered by this. Why should those who simply move money around, make more money than those who produce the materials and do the actual labor on the project? Most readers can probably relate to this personally because the interest burden of financing the purchase of their homes causes the final total cost of the purchase to far exceed the original cost of home itself. There needs to be a better system of financing public projects.
Perhaps engaging in creative thinking would result in cheaper financing of public projects. Proposed solutions still center on using conventional or Wall Street financing instead of looking to alternative sources. Well, there is a better way and it can provide any sized government or community entity with financing at zero or near zero interest. One needs only to look at the Bank of North Dakota (BND) for a solution, which is currently the only state-owned bank in the country. This bank has been in existence for 92 years and has a history of safe, secure, and highly profitable banking. In fact North Dakota has a budget surplus, much of which can be attributed to the reduced borrowing costs of public projects. The BND’s purpose is to provide loans to build economic capacity within the state. Examples include loans to state entities in the form of low cost loans to municipalities, schools, small businesses, agriculture, infrastructure projects, and students. The BND does not imperil state funds or tax money but is self-funding and self-sustaining. The BND enjoys broad political support from both major parties inside of North Dakota.
A public bank can be state wide or can be started or acquired by any sized government or community. It could extend county wide, allowing municipalities and other public entities access to its credit. It could be a consortium of school districts that form their own bank to save financing costs for large projects or purchases such as Haddonfield is considering. It could also be a consortium of colleges and universities seeking to reduce their interest costs which is currently driving the huge debt burden of higher education for students. Some might criticize this as “socialism”, but the system we currently have is “socialism”, where the big bank profits are kept by the banks, and the losses are subsidized by the taxpayers. The biggest advantage of a public bank is that public entities could access the resources of the bank to obtain zero or near zero interest loans. The bank would have access to the Federal Reserve discount window which makes loans available to banks currently at approximately .25% interest. This significant savings could be passed on to the loan seekers. Any profits generated by the bank are recycled back into its operation allowing it to charge the lowest rates possible. By keeping the profits inside of public coffers instead of sending them to Wall Street, the taxpayers are saved most of the costs of public projects by eliminating the financiers.
The costs associated with running a public bank are significantly lower than those for the large Wall Street banks because the employees are public workers and are not paid exorbitant salaries and multi-million dollar bonuses. A public bank is also counter-cyclical, meaning that is can extend credit precisely when private banks are reducing their credit availability and credit is most needed. A public bank is economically sustainable because they are run by professional bankers, operating transparently according to applicable banking principles. By returning credit income to the community in the form of near zero interest rates, the pressure for tax increases is reduced.
So why has this not been done outside of North Dakota? Inertia is a major force. Most commissioners, business administrators, treasurers, and others who handle local finance are not familiar with the concept of public banking. There are also the vested money interests on Wall Street who do not want to see their cash cow removed and they vigorously oppose any moves to initiate public banks or to advertise their advantages. Despite this, the momentum for public banking has been increasing with fourteen states now having either introduced bills to form state-owned banks or to do feasibility studies. The bills were introduced in Oregon, Washington State, Massachusetts, Arizona, Maryland, New Mexico, Maine, California, Montana, and New York. They join Illinois, Virginia, Hawaii, and Louisiana which introduced bills in 2010. Washington and Oregon commissioned the Center for State Innovation based in Madison Wisconsin to do a detailed analysis and it concluded that “state-owned banks would have a positive impact on employment, new lending, and state and local government revenue.” This is a viable solution.
As a former teacher for 15 years and a school administrator for 16 years, I have seen the devastating effect that budget cuts have had on our educational programs. During my time as an administrator, due to budget pressures I witnessed the elimination of the following programs and personnel in the school district where I was employed: Wood Shop, Home Economics, Metal Shop, Child Care Program, Cooperative Industrial Experience (work-study), Print Shop, Philosophy, Auto Shop, elementary librarians, the entire Business Department, Technology Lab, and Carpentry. There were also reductions in the following programs: Art, Music, Performing Arts, and Foreign Language. The loss of these enrichment programs degrades our educational offerings and leaves our society at a distinct disadvantage to other countries where the curriculum is more robust. Don’t we want more for our children and our country’s future?
Isn’t it time to redirect interest payments back into our schools? Isn’t it time to lower debt costs for local governments? Isn’t it time to cut the costs of infrastructure projects in half? Isn’t it time to invest local dollars into the local economy? Isn’t it time for interest payments for public projects to be returned back to be used for tax reduction instead of going into the pockets of the Wall Street bankers or to tax havens in Switzerland or the Cayman Islands?
So how can we make this happen? Taxpayers need to go to their town councils, their school boards, their county commissioners and ask them if public banking is being considered. If the answer is no, then ask why not? Ask these questions, do not accept “no” as an answer. If you are told that you do not understand these things, tell them to make you understand.
To those public officials who are truly interested in serving their communities better: be bold, be innovative, and empower your communities. We owe this to our fellow citizens, our children and our future. To learn more about the possibilities that that public banking offers, to learn how to get started, and where to find help in implementation, visit the following site:
Rudy Avizius has been researching and writing articles on economic and social issues for over 10 years. He is concerned that our current path is not sustainable economically, socially and environmentally and that the time for real change is rapidly running out. He has also been a guest speaker on several radio talk shows in the US and internationally.
Is this sort of intimidation and police force really necessary against peaceful protestors? The Phoenix Arizona police clearly outnumber the protestors and they have the badges and the guns. Who are they “protecting”?
This footage shows police lobbing a flash grenade into a group a people who were trying to help a critically injured person. This injured person was an Iraq War veteran who served 2 tours of duty as a marine and survived. Now he is gunned down by a rubber bullet to the face by those sworn "to protect and serve". He was diagnosed with a skull fracture by the hospital. Who was this cop “protecting”? Do you think he will face any charges?
Looks like our streets are more dangerous than an Iraq war zone. The Oakland Police Dept actually used tear gas, rubber bullets, and a SONIC CANNON on the protestors. Their offense was a “curfew violation”. Sounds like a reasonable response to such a serious crime to me.
The video above shows Office Anthony Bologna pepperspraying several young women without provocation. Later in the day he indiscriminately peppersprayed again and that was also caught on video and went viral. Who was (yes, I had to laught as well) Tony Baloney “protecting”?
This coward who hides behind his badge and gun, had the audacity to pepperspray someone's daughter. After an "investigation", he was docked 10 vacation days. He remains in a position of leadership in the NYPD. What do you think would happen if you or I peppersprayed one of his daughters?
This criminal needs to be brought to trial for aggravated assault. Do you think that will happen?
For a well written article by a Canadian observer on this subject:
For over a week now, citizens have been gathering in Liberty Plaza in New York City to protest the greed and corruption of Wall Street and its corrosive effects on our nation’s economy and well being.
This last week we witnessed the spectacle of police guarding the bronze bull statue located on Wall Street. This sight is almost biblical in its significance, where the powers that be order their enforcers, the police, to guard the Golden Calf in front of the Temple of Greed where the elites worship their great gods: money, power, greed, envy, and lust.
Lloyd Blankfein, CEO of Goldman Sachs and one of the many high priests in this Temple of Greed, once stated that he “was doing God’s work”. It is likely that much of this selfless and charitable work takes place at this Temple of Greed. It is easy to envision the rituals of this Temple, where with hands in the air, the high priests and their followers chant “more, more”, but “more”, is never enough.
Understanding the significance of this Temple and the Golden Calf makes it very easy to comprehend why the elites and their high priests ordered their enforcers to protect the Golden Calf. Should anything happen to it, the people outside the Temple would lose the grace and love of their gods resulting in an abyss of plague and famine. Those inside the Temple would be protected from this plague and famine because of their devotion to the gods, but those outside the Temple would be devastated.
As those outside the Temple, we should be grateful to these High Priests for their concern and for recognizing the importance of guarding the Temple and Golden Calf. They demonstrated bravery and wisdom by calling out the enforcers restrain those who would challenge the Temple and its values. We applaud those among the police who responded with additional vigor and without question to protect the values of the Temple. While many of the enforcers practiced restraint, it is so comforting to know that there were those who showed their devotion and loyalty to the Temple and Golden Calf by ignoring the rights our nation’s founding fathers fought so hard to provide us. These enforcers who showed this initiative and loyalty to the High priests understand that when it comes to matters of the Temple, that civil liberties and other rights are irrelevant.
We should be grateful to those among the enforcers who prevented the protestors from assembling in front of the Temple.
We should be thankful for those among the enforcers who took away the protective tarps that sheltered the protestors from the rain.
We should admire those among the enforcers who were resourceful enough to dig up a law that is over 150 years old that forbids masks in public and to use this obscure law as a reason to arrest some of the protestors.
We should appreciate that there were those among the enforcers who had the courage and integrity to ignore the First Amendment rights of the independent press and prevented as many as they could from reporting on this protest.
We should be comforted that the corporate controlled media obediently follow the commandments of the high priests and largely suppressed this story.
The audacity of these protestors thinking that they have the right to petition for jobs so they can support their families! The nerve of these protestors thinking they have the right to call for prosecution of the High Priests of the Temple!
These demonstrators who are so ignorantly challenging the morality of these High Priests need to be taught the lesson that it is unwise to challenge the Temple and its High Priests. Hundreds have been arrested, but more arrests are needed. A lesson on blind obedience to the overlords with bowed head needs to be reinforced. Again we are truly indebted to those among the enforcers who had the courage to educate them.
Only by blind devotion and faithful obedience to the commandments of the High Priests can we as people be brought out of the wilderness.
Website for Occupy Wall St: https://occupywallst.org
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Rome crumbles while the nation numbs its mind with NFL gladiator games, propaganda and opinion masquerading as news, celebrity worship, and corporate drivel such as: reality shows, Dancing with the Stars, and American Idol.