John Lawrence • www.sandiegofreepress.com • August 23, 2013
States, Cities and Pension Funds Have Gone into Debt to Wall Street When They Could Have Started a Public Bank and Paid Interest to Themselves
Public banks plow their revenues back into community needs like infrastructure, education, health facilities, local enterprises and other public banks. When municipalities, cities, states, countries and even smaller jurisdictions like school districts fund their deficits with Wall Street, the profits go into the pockets of executives and investors.
Currently, only the state of North Dakota has a public bank. As a consequence North Dakota suffered very little from the Great Recession of 2008, has a robust economy and no budget deficit. California on the other hand struggles every year with its budget because it pays a lot of interest on its loans to Wall Street. If California had a public bank similar to North Dakota’s, it would have no budget deficit at all and could fund its infrastructure needs out of its own revenues.
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