Friday, March 14, 2014

150.1 - Good News: Vermont towns support public bank

Good News: Vermont towns support public bank

I'll start the week, as I always like to, with some bits of good news.

We'll start with the fact that on March 4, "Town Meeting Day" in Vermont, 19 towns had in the state on their agenda a resolution about whether or not to support a bill now in the state legislature to create a state - that is, a public - bank. Fifteen of those towns said yes. And I think that's good news.

The specific proposal under consideration is Senate Bill 204, which would turn an existing agency, the Vermont Economic Development Authority, into a public bank that would accept deposits and issue loans for in-state projects. Supporters note that capital projects are now financed, as they often are in most states, by selling bonds, which wind up involving both interest and fees that are net costs to the state. Those costs can be reduced and sometimes even avoided by establishing a public bank as a funding source for public projects.

Interestingly, the only state in the country that now has a state bank is the thoroughly red North Dakota. That bank has been in place since 1919 and has survived every attempt to dismantle it. During the economic meltdown of 2008, when the entire world financial system was melting down, that bank made record profits.

Which is part of the reason why, since that time, some states have begun to see the benefit of public banking. And if a public bank, one devoted to the welfare of the citizens of a state rather than the wallets of investors, sounds like socialism - well, yeah, it kinda is.


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