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Detroit is Not Broke!

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1. Not paying high management fees (see below)

2. Not paying high interest rates on bonds for money already raised in taxes

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3. Investing in the local community (hopefully in a more responsible way if such loans are made by independent, conservative, bankers working for the state, as North Dakota's State Bank has done since 1919)

4. Supporting local community banks and lending institutions (like Credit Unions).   North Dakota has the highest per capita bank to person ratio in the country

5. Support for local small businesses, which are credit-starved in Detroit

6. Job creation both in the banks supported and from the activities of the public bank

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7. Revenue creation (see dividend payouts, above)

8. Performing their fiduciary duty by protecting taxpayer money in the event of a major bank bail-in (a forced deposit for equity swap proposed by the FDIC and the Bank of England in a joint 2012 report).

Third, there is the matter of how much in fees Detroit pays (page 178).   This turns out to be hard to find.   There is this nebulous category of "Investment Expense" totaling $31m for the pension fund as of June 30, 2012 when the report closed (BTW, how have things changed in the year since then?   Where is the 2013 report?).   But is that for the fees for fund management or something else?   In any case, the management of a public bank would be far, far less.   The president of the Bank of North Dakota, for example, earned under $300 thousand last year.  

I especially like this line:

     General     Firemen

                                                                         Retirement Retirement

                                                                           System     System

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Amount Due to Broker for Securities Lending $137,864,912   $336,556,836

Nearly half a billion due to brokers for "securities lending" whatever the hell that is...

And another half a billion is invested in 32 other national currencies (page 90), certainly not helping Detroit, Michigan, USA!

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http://newthinking.blogspot.com/

Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles "America is Not Broke" was published by Tayen Lane Publishing (March, 2015) and may be found here:
http://www.americaisnotbroke.net/

Scott is a former President of Common Ground-NYC (http://commongroundnyc.org/), a Geoist/Georgist activist group. He has written dozens of articles for (more...)
 

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