Wednesday, December 2, 2009

Let The States Lend Directly To The People For 2% Interest Rate, Get Rid Of The Fed As Intermediary

Florida Governor candidate Farid Khavari economic plans to create The Bank of the State of Florida. This bank would use the fractional reserve regulations that govern all banks, in the process, making billions billions per year for Florida's treasury, while saving thousands of dollars per year for Florida homeowners,".

“Not since the Great Depression has it been so clear,” said Khavari. “We need banks that work for the benefit of the people, not people working for the benefit of the banks. There is no mystery why we are facing another depression: the banks got greedy and stupid, and now they are making us pay for it".

Well, that is an idea. Why make the big banks profit big time for being intermediaries? They borrow at 0.25% and lend at over 4%.

Says Mr. Khavari:

“The economy is collapsing due to lack of demand. The economy needs money, but the banks are cutting credit, and then sucking all the cash out of the economy by raising interest rates to make sure no one has any cash left at the end of the month. The cost of interest is built into the cost of everything. People already work ten years of their lives just to pay interest in one form or another. The Bank of the State of Florida will end that for Floridians.

And this model will work for every state.“We can start the BSF at no cost to taxpayers. We can pay 6% interest on savings. Using the same fractional reserve rules as all banks, we can create $900 of new money through loans for every $100 in deposits. We can loan that $900 in the form of 2% fixed rate 15-year mortgages, for example, and the state can earn $12 every year for every $100 in deposits. That means Floridians can save tens of billions of dollars per year while the state earns billions making it possible for them.“2% fixed-rate mortgages will create a thousand times more jobs than any so-called stimulus can. By reducing the total interest cost on a home by over 85%, the average family will save hundreds of thousands of dollars, and that money stays in Florida,” Khavari said.

“State and local government budgets will balance without higher taxes when the BSF cuts interest costs,” Khavari said. “6% BSF credit cards will save people billions per month, money that stays in Florida instead of going to the big banks—and the state will make huge profits on that, too. Saving billions in interest costs will create millions of jobs without subsidies just by keeping those billions circulating in Florida. Eventually the state will earn enough to reduce and eliminate state and local taxes while every Floridian has economic security in a recession-proof Florida.”

Read more in the Miami Times has an article, or watch the YouTube video:

The problem is that he would going against the big banks. Some may see his idea as socialist. Well, it is not like the capitalist banking system has been very succesful lately.

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1 comment:

Bob said...

People have a funny idea of what "socialism" is.
Socialism is where everyone works for the state. In this case, we have the state making a profit by working for everyone.
We need to think about this as we drive on our socialist roads to pick up our kids at the socialist schools and take them to play at the socialist parks, unless there is a fire somewhere and we have to pull over for the socialist fire truck. Then we can take them home and they can shower in socialist water.
50 years ago, one could say "socialism" and that could be considered an argument.

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