Detroit/ Michigan in unique position to open a public bank

[detroiter62]

With the emergency manager, Detroit is in a unique position to open a public bank. With emergency manger powers could Kevin Orr open a public bank of Detroit ? If the tax receipts for the city of Detroit were put in its own bank, I believe Detroit could lend money to pay for the city pensions at a ratio of 10:1 loans to deposits and then collect the interest.

This has worked well for North Dakota as the only state owned public bank http://www.motherjones.com/mojo/2009...vy-wall-street

See the new book about the public banking solution http://www.publicbanksolution.com/

[Dan Wesson]

With the emergency manager, Detroit is in a unique position to open a public bank. With emergency manger powers could Kevin Orr open a public bank of Detroit ? If the tax receipts for the city of Detroit were put in its own bank, I believe Detroit could lend money to pay for the city pensions at a ratio of 10:1 loans to deposits and then collect the interest.

This has worked well for North Dakota as the only state owned public bank http://www.motherjones.com/mojo/2009...vy-wall-street

See the new book about the public banking solution http://www.publicbanksolution.com/

I thinks it's great that you know what Fractional Reserve Banking is.

Most of the sheep have no idea.

[Honky Tonk]

I thinks it's great that you know what Fractional Reserve Banking is.

Most of the sheep have no idea.

Baaaaaaaaahhhhhh.........

[Hypestyles]

how would this fit in with the [[dead?) proposal for the city offering its own property insurance plans to compete with the redlining?

[detroiter62]

If the Governor took the 976 million in surplus and were to open a public state bank, the state would be able to loan out 10x that much, the ratio of loans to deposits is 10:1, therefore the state would immediately have 9.76 billion to loan out to local governments for infrastructure inprovements, then all the interest paid pack for the loans would go back to the state bank and then could be loaned back out at 10x the amount- this is fractional reserve banking. Also I believe the state has a debt service line with regular banks to handle all the states financial transactions, if the debt service line was 2 billion, the state would immediately save 2 billion just for setting up the public bank, twice the current surplus.

I believe the same could be said for the city of Detroit, if the city could put its tax receipts in a public city bank of Detroit, they would have 10x the amount deposited to pay for infrastructure or pensions, I believe this could cover any current shortfall and they wouldn't need to get a loan from other banks, I believe they would also save costs on their debt service line as well.

It would probably be easier for the city to setup a public bank because all the finances are controlled by the emergency manager and the bankruptcy court.

[Dan Wesson]

First get rid of the concept of Deficit Spending. Then you have the issue of only lending to those who can pay it back. That means not more of the same.

[MikeyinBrooklyn]

City government should not involve itself in any additional activities; it needs to pare down to essential services and deliver them effectively. We have not managed our existing government for half of a century; we shouldn't throw a bank on as well. North Dakota, to the best of my knowledge, is not a bastion of corruption and inefficiency.

[coracle]

If the Governor took the 976 million in surplus and were to open a public state bank, the state would be able to loan out 10x that much, the ratio of loans to deposits is 10:1, therefore the state would immediately have 9.76 billion to loan out to local governments for infrastructure inprovements, then all the interest paid pack for the loans would go back to the state bank and then could be loaned back out at 10x the amount- this is fractional reserve banking. Also I believe the state has a debt service line with regular banks to handle all the states financial transactions, if the debt service line was 2 billion, the state would immediately save 2 billion just for setting up the public bank, twice the current surplus.

I believe the same could be said for the city of Detroit, if the city could put its tax receipts in a public city bank of Detroit, they would have 10x the amount deposited to pay for infrastructure or pensions, I believe this could cover any current shortfall and they wouldn't need to get a loan from other banks, I believe they would also save costs on their debt service line as well.

It would probably be easier for the city to setup a public bank because all the finances are controlled by the emergency manager and the bankruptcy court.

If both State AND Detroit opened Public Banks. Detroit could bank its tax receipts of say $1B in Detroit Public Bank who could then loan $10B to the State Public Bank who then could then loan out 10[[10 + 1) = $110B to repair the pot holes. This is fun!
Nah! at the end of the day [[if it's still allowed to say that) there's a better possibility of robbing a Bank in Detroit than opening one and the first one up could be Bank of America.

[JBMcB]

I believe Detroit could lend money to pay for the city pensions at a ratio of 10:1 loans to deposits and then collect the interest.

The problem is that it's hard to make money with fractional reserve banking when the fed pegs the prime rate at near-zero percent. That's one of the reasons banks got into all kinds of securities weirdness in the early 2000's.

Now the micro-loan industry might make some money, except the federal government is starting to regulate those out of existence as well.

[Dan Wesson]

What a game we play when it comes to our money.

Money is borrowed into existence. Money is debt. If all debt was paid off there would be no money.

[JBMcB]

Money is borrowed into existence. Money is debt. If all debt was paid off there would be no money.

Money is whatever people use to barter with and exchange value. The only reason you could argue that US currency is debt is because the government made it that way. People could decide to pay for stuff with pieces of gold and silver, but the government frowns on that.

[compn]

a public bank would be great.

imagine 3% apr on state credit cards. mmmm, one can hope cant he?

[Bobl]

This reminds me of a Zolton Ferency plan, decades ago. Anyone remember Zolton!

[Dan Wesson]

Money is whatever people use to barter with and exchange value. The only reason you could argue that US currency is debt is because the government made it that way. People could decide to pay for stuff with pieces of gold and silver, but the government frowns on that.

That is correct. Try to pay your taxes in gold or silver bullion.

Money and currency are two different things that are related.
Our money is a fiat currency. It is a Federal Reserve Note. A note in finance is another way of saying an IOU.

[Hermod]

The board of directors of the Detroit Pubic Bank would include Khwyme, Moncon, and Momma Cheeks.

[MikeyinBrooklyn]

Pretending for a moment that Detroit's opening a bank was both a good idea and practical, the legal hoops, regulations and licensing would take years to be worked out before it opened. So, today's financial and economic issues would not really be relevant, except inasmuch as they provided a cautionary tale to us about biting off more than you can chew.

[Dan Wesson]

Here's an interesting article concerning community Banks...

This I did not know,

To investigate the reasons for Florida's bank failures, the Herald-Tribune obtained state banking reports that had never before been made public. The documents are so secret that even federal judges have kept them sealed in court filings.

But these examinations become public record one year after a bank fails thanks to a law passed by the Florida Legislature in 1992. No other state permits access to such reports until at least 50 years after a failure.
In 44 states, bank examinations are either destroyed or permanently sealed after an institution fails.

Amazing the secrecy embedded into law the banksters have attained over the years.