Share on Google Plus Share on Twitter Share on Facebook 13 Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend 8 (21 Shares)  
Printer Friendly Page Save As Favorite View Favorites View Stats   2 comments

OpEdNews Op Eds

Pennsylvania: broke, unless you count the $91 billion

By (about the author)     Permalink       (Page 1 of 2 pages)
Related Topic(s): ; , Add Tags Add to My Group(s)

Must Read 5   Well Said 5   News 3  
View Ratings | Rate It

opednews.com Headlined to H4 5/29/12

Become a Fan
  (8 fans)
- Advertisement -


budget cuts by get-government-jobs.com
For almost four years, the administration and Congress have showered money, protection and even praise on those who caused an economic catastrophe that still rolls across America like a slow motion tidal wave. 

It is crystal clear who Washington represents, and what the American people can expect from the next administration and Congress -- more of the same, rhetoric and excuses.

But the needs of the American people can't wait another four years. States and local governments must do the job Washington will not. New leaders and new ideas are urgently needed. One such idea is public banking.

A public bank, such as the hugely successful Bank of North Dakota (BND), is capitalized with public funds, has one shareholder - the people -- pays no outrageous compensation for managers and offers no incentive to gamble.

A public bank partners with community banks, credit unions, other local financial institutions and municipal governments to provide the sustainable and affordable credit which is essential to support locally directed economic development, restore vital public services and create jobs.

Wall Street hates the idea, fearing the loss of trillions of dollars of state and municipal deposits, and the huge fees they reap for providing cash management, payroll and other services which states and municipalities could provide internally and at far lower cost -- if they owned their own bank.

The parasites-in-pin-stripes argue, "But your state is broke. Where will you get the money to capitalize a bank?"

But are the states broke? An examination of the finances of U.S. states and municipalities turns up an astonishing fact. They keep two sets of books.

- Advertisement -

The one that gets all the attention is used for operating budgets, and generally paints a picture of state and municipal budgets stretched to the limit. But the other set of books, required by law and called the Consolidated Annual Financial Report (CAFR), indicates that there is public money stashed all over the place. Nationally, it amounts to trillions of dollars.

California, with its giant economy reports more than $600 billion in these "off budget" funds. In Pennsylvania, the total is about $91 billion -- not exactly small change -- and it can be found in the state's 2011 CAFR in three categories.

Proprietary Funds, generated when a government charges customers for the services it provides.

Fiduciary Funds, in which the state acts as a trustee to hold resources for the benefit of others, such as pensions; and

Component Units, which are legally separated organizations for which the government is financially accountable, and the revenue is derived from assessments, fines, penalties, licenses, etc.

- Advertisement -

If only twenty percent of these funds were used to capitalize a bank and were leveraged at a conservative ratio of 8 to 1, Pennsylvania could inject more than $145 billion into its economy, creating an economic revival on a scale never before seen.

Wall Street responds to this prospect with scare tactics. "You mean put twenty percent of our pensions at risk?"

To which proponents rightly respond, "No, we mean get those pension funds under better and more productive management."

Next Page  1  |  2

 

http://www.publicbankingpa.org

Author of the forthcoming novel "Pursuits of Happiness," a director of the Public Banking Institute and chairman of the Pennsylvania Project. Mike is an international transportation and logisics executive with broad experience in U.S. government (more...)
 

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon


Go To Commenting

The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact Author Contact Editor View Authors' Articles
Related Topic(s): ; , Add Tags
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

The crash of 2016: Wall Street gets ready

Pennsylvania: broke, unless you count the $91 billion

Lou Dobbs: Overpopulation threatens all that makes America great

Public Banks: helping workers by helping people

The Coming Crash

Sleepwalking to Armageddon?

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
2 people are discussing this page, with 2 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)

Krauss nails it. Austerity and deficits are creati... by R A Bows on Wednesday, May 30, 2012 at 12:11:18 AM
Thanks Mike for exposing the truth about the CAFRs... by Scott Baker on Wednesday, May 30, 2012 at 4:29:10 AM