If State Banks, why Not County Banks?

MoneyChanges.org • June 21, 2011

The majority of state and county officials in the United States are staring at serious budget problems from which there is really no escape without significant action. Rising health care costs, employee pension fund losses, and revenue shortfalls are affecting budgets at every level of government. Notably, all of these problems were caused, both directly and indirectly, by speculation in the financial and banking sectors on Wall Street. Cutting pensions, eliminating health benefits, and slashing budgets are a diversion from the source of the troubles.

Tightening our belts and straightforward budget cutting are helpful in the short term but ineffective as long term solutions. Real solutions to our financial dilemma require us to redirect the public’s investments away from speculative Wall Street banks and their too-big-too-fail counterparts.

Read entire article here.

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2 Responses

  1. “Generally a county bank’s activity would be limited to participation loans with other banks and private investors.”

    And therein lies unwanted potential for public-private partnerships made a model in fascist Europe from the mid-1920s to the end of WWII. Private investors simply must be left out of the equation if public banking is to serve the public need most broadly.

    Per “other banks” these would invest in public banks (state/county) solely as a means of gaining safe store of equity capital at rates of return slightly more advantageous than similarly dated U.S. Treasury securities.Their investment’s object is not first for profit, although safely profit they will. Rather it is for posterity: that an economy running like a well-oiled machine — this facilitated by public banks — might present far more lucrative (and only slightly more risky) investment (loan) opportunities.

    Truth be told, though, the full potential of state/county/city public banks cannot be gained without a Bank of the United States directing credit to finance the transformation of the economic platform on which commerce in the U.S. is conducted. And I fear that, any push for an arrangement less than this simply will not work given the multi-trillion dollar investment deficit in the physical economy over the past forty years.

  2. “Generally a county bank’s activity would be limited to participation loans with other banks and private investors.”

    And therein lies unwanted potential for public-private partnerships made a model in fascist Europe from the mid-1920s to the end of WWII. Private investors simply must be left out of the equation if public banking is to serve the public need most broadly.

    Per “other banks” these would invest in public banks (state/county) solely as a means of gaining safe store of equity capital at rates of return slightly more advantageous than similarly dated U.S. Treasury securities.Their investment’s object is not first for profit, although safely profit they will. Rather it is for posterity: that an economy running like a well-oiled machine — this facilitated by public banks — might present far more lucrative (and only slightly more risky) investment (loan) opportunities.

    Truth be told, though, the full potential of state/county/city public banks cannot be gained without a Bank of the United States directing credit to finance the transformation of the economic platform on which commerce in the U.S. is conducted. And I fear that, any push for an arrangement less than this simply will not work given the multi-trillion dollar investment deficit in the physical economy over the past forty years.

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