ATLANTA, Georgia, Apr 30, 2010 (IPS) – At least eight U.S. states are considering proposals to start state-run banks in the wake of an economic crisis where many private banks ceased or greatly decreased their lending, literally shrinking the money pool available in state economies.
Economist Ellen Brown, author of “Web of Debt”, has been writing commentaries on various websites and runs a Google Group that has been pushing the idea of state-run banks for a couple of years, efforts which she says have made a lot of state legislators aware that a state-run bank was even a possibility.
North Dakota is the only one out of the 50 U.S. states that is still operating with a fiscal surplus, and some economists argue it is in part due to the state-owned Bank of North Dakota – the only bank of its kind in the U.S. – which has been able to pump money into its own economy by making loans to farmers, small businesses and families.
Numerous states are beginning to consider the idea of starting their own bank, since the issuance of credit is one of the main ways that money enters the economy.
The George W. Bush and Barack Obama administrations have pumped trillions of dollars into private banks through the federal bank bail-outs, with the hope that they will begin lending again. Yet any entity can start a bank, including a corporation, university, nonprofit, or even a governmental entity like a state, city, or county.
Hawaii, Illinois, Massachusetts, Michigan, Missouri, New Mexico, Vermont, Virginia, and Washington each have proposals on the table in their respective state legislatures considering the formation of a state-run bank in one way or another.
In addition, current candidates for political office in eight states – California, Florida, Idaho, Illinois, Missouri, Oregon, Vermont, and Washington State – are pushing a state-run bank as part of their platform.
“I researched this for several months,” State Sen. Hanson Clark of Detroit, Michigan, told IPS. “I spoke to the president of the Bank of North Dakota in early February. It’s a way to get our economy going in the region and the state, to create more jobs. Time and time again business people would tell me they were ready to expand, do projects, but they didn’t have financing.”