So much of our economic life is controlled by banks -- private banks. When we need money we go to them for loans. And they charge us high interest. When our local governments collect taxes, they deposit the money in private banks, who then use it for loans or even speculate with it for their profit. But what if we the people controlled the money instead? That’s what the State of North Dakota did a century ago when they established what is the country’s only publicly owned bank. Still today it is one of our healthiest banks and it has contributed to the health of the state’s economy, giving low interest loans to farmers and local businesses and students as well as local governments for infrastructure projects. The interest they pay goes back into the State treasury, helping to keep taxes low. Without a public bank state revenue might have been deposited in Citibank and left the state for Wall Street. The public bank keeps it in state where it can create shared prosperity.
Based on the success of the Bank of North Dakota, now across the U.S. local and state governments are considering establishing their own public banks. Using the principle of fractional reserve lending by which they can loan out ten times the reserves they have in hand public banks can leverage tax payer dollars for public projects. Normally when such projects are financed by bonds, half of the total cost goes for interest. Public banking makes tax payer dollars go farther. Public banks can finance green energy, affordable housing and worker-owned cooperatives. And instead of supporting wealthy shareholders, public bank profits return to the communities they serve.
Walt McRee has advised various public banking initiatives, including the Pennsylvania Project and Banking On New Jersey. He has been a leader of the Public Banking Institute, a non-profit that promotes public banking nationwide. He will be joined in this webinar by attorney Ellen Brown, founder and chair of the Public Banking Institute. She is the nation’s leading advocate for public banking and author of thirteen books including Web of Debt. Her latest book is Banking on the People: Democratizing Money in the Digital Age. Brown and McRee are co-hosts of a radio program on PRN.FM called “It’s Our Money.”