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OpEdNews Op Eds    H3'ed 6/16/10

Let the Empire State Finance its own budget Gap!

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Today, the NY Times reported:

"Gov. David A. Paterson said that he would unilaterally insert the rest of his budget proposal into an emergency spending bill due on June 28 if the Legislature did not reach a final budget deal with him before then.

The move sets up a major confrontation with lawmakers and raises anew the threat of a government shutdown."

But, the fact is, there is far, far more money than needed to close the budget gap and pay for vital Government services already in State Reserves. According to the Comprehensive Annual Financial Report (CAFR), 2009:

The report expresses concern in their introduction of increasing budget deficits ($8 billion for 2009) and rising debt-servicing costs ($5.3 billion in 2009 projected to $7.8 billion in 2014).

However, in the same report, there are "pension" accounts, worth $111 billion (42), with current member contributions at $2.9 billion (43) and benefits paid at $7.4 billion, with a whopping $99 million administration cost (none of which goes to the citizens of NY State) (43). Types of investments for this $111 billion are listed on page 84.

So, the state is asking to retain $111 billion of public assets to pay "New York's $9 billion budget gap" according to the Times. It's important to understand that any state has literally thousands of various government CAFRs with investments like this. What's required is comprehensive and independent accounting and independent cost-benefit analyses of how much money the public has handed-over to all levels of government and how to maximize public benefit.

An example of the benefits of independent CAFR analysis is an Oregon legislator who read their CAFR and discovered over ten times their budget shortfall available for immediate use.

We didn't elect these people to take our money and "invest" it for us; government is not a for-profit corporation. This is a massive lie of omission to not reconsider these funds for other uses, including a state-owned public banking, based on the highly successful model in North Dakota, which has had a State Bank since 1919 and is currently the only state in the union to be running a budget surplus.
The primary attack is that pension funds are for pensions and illegal to touch. But, keep in mind that this money is already being invested, and sometimes lost, in risky markets by the advisers New York currently pays nearly $100 million to manage their funds.

None of this money is invested specifically in community based New York businesses or needs.

In North Dakota, by contrast, ALL state revenues are invested into State needs - in agriculture, in housing, in student loans etc. - many of which are significantly less risky than the ventures Wall Street money managers currently "invest" in.

Solution: Set up a New York State Bank, use it to make responsible loans, enable the fractional reserve system to create credit (rather than having private banks create it for us and charge us interest) that will create even more money, and pay off New York's obligations with the profits. Why should we pay $99 million to unconnected parties whose main interest is collecting fees, not benefiting New York?

Sign the petition to create a State Bank in New York State:

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Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a former 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:

Scott is a former and current President of Common Ground-NY (, a Geoist/Georgist activist group. He has written dozens of (more...)

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