Re: [Pen-l] How Cash Starved States can Create their Own Credit

[Jim Devine <jdevine03@xxxxxxxxx>]

>"North Dakota is a sparsely populated state of less than 700,000, known for cold weather, isolated farmers and a hit movie - Fargo. Yet, for some reason it defies the real estate cliche of location, location, location. Since 2000, the state's GNP has grown 56%, personal income has grown 43%, and wages have grown 34%. This year the state has a budget surplus of $1.2 billion!"<

Wait, the whole country grew a lot, too, during the bubble years
(while "Fargo" mostly takes place in Minnesota). It's also a bad sign
that personal incomes and wages lagged so much behind gross state
product.

>What does the State of North Dakota have that other states don't? The answer seems to be: its own bank. In fact, North Dakota has the only state-owned bank in the nation.... <

That's a good thing, if it avoided getting involved in the city
slickers' Standard & Ponzi scheme. But who runs that bank? business,
I'd bet.

> Some experts insist that we must tighten our belts and start saving again, in order to rebuild the "capital" necessary for functioning markets; but our markets actually functioned quite well so long as the credit system was working. We have the same real assets (raw materials, oil, technical knowledge, productive capacity, labor force, et cetera) that we had before the crisis began. Our workers and factories are sitting idle because the private credit system has failed.<

Right, it's like I said in my long missive to David, there are a lot
of real productive assets that can be used. It's not just in ND.

> A system of public credit could put them back to work again. The notion that "money" is something that has to be "saved" before it can be "borrowed" misconstrues the nature of money and credit. Credit is merely a legal agreement, a "monetization" of future proceeds, a promise to pay later from the fruits of the advance. Banks have created credit on their books for hundreds of years, and this system would have worked quite well had it not been for the enormous tribute siphoned off to private coffers in the form of interest. A public banking system could overcome that problem by returning the interest to the public purse. This is the sort of banking system that was pioneered in the colony of Pennsylvania, where it worked brilliantly well. <

this is wishful thinking, isn't it? it's not about to be instituted,
is it? The ND state bank isn't going to be doing monetary policy, I'd
bet.

(you betcha!)
-- 
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) -- Karl, paraphrasing Dante.
_______________________________________________
pen-l mailing list
pen-l@xxxxxxxxxxxxxxxxxx
https://lists.csuchico.edu/mailman/listinfo/pen-l