Florida political leaders consider state bank: 2% mortgages, 6% credit cards, no state debt costs
PMLA County Nonpartisan Examiner
Even though this idea is obviously cost-effective with just a few moments’ consideration of the facts, even though the idea of creating money and credit for the public good rather than for bank profit has a rich history of support from many of America’s brightest minds, and even though this is the “secret” to the state with the lowest unemployment in the nation along with a record budget surplus (it’s North Dakota, one of only two solvent states today), the idea of a state-owned bank creating its own credit is a new idea for many Americans.
Florida candidate for Governor, economist Farid Khavari, explains that a state-owned bank should replace for-profit banks to provide substantial public benefits while profiting the state. Two percent mortgages would reduce interest payments by 85%, saving $88,000 per every $100,000 borrowed. The bank would pay 5% interest on deposits, charge 6% interest on credit cards, and 3-4% on commercial and vehicle loans.
State-owned banks could operate under existing international credit-creation standards issued by theBank for International Settlements (BIS) of an 8% capital requirement. The Federal Deposit Insurance Corporation (FDIC) has similar minimal capital requirements, called Tier 1 leverage, currently set at 4% or the ability to lend $25 for every $1 of capital. This is the so-called "stress test" leverage ratio.Prominent economists and critics argue that the stress test was designed by the banks, and in no way any signal of correction from management that caused our economic crisis. more