Ellen Brown
January 24, 2011
www.webofdebt.com/articles
Bills were introduced on January 18 in both the House and Senate of the Washington State Legislature that add Washington to the growing number of states now actively moving to create public banking facilities.
The bills, House Bill 1320 and Senate Bill 5238, propose creation of a Washington Investment Trust (WIT) to “promote agriculture, education, community development, economic development, housing, and industry” by using “the resources of the people of Washington State within the state.”
Currently, all the state’s funds are deposited with Bank of America. HB 1320 proposes that in the future, “all state funds be deposited in the Washington Investment Trust and be guaranteed by the state and used to promote the common good and public benefit of all the people and their businesses within [the] state.”
The legislation is similar to that now being studied or proposed in states including Illinois, Virginia, Hawaii, Massachusetts, Maryland, Florida, Michigan, Oregon, California and others.
The effort in Washington State draws heavily on the success of the 92-year-old Bank of North Dakota (BND), currently the only state-wide publicly-owned U.S. bank. The BND has helped North Dakota escape the looming budgetary disaster facing other states. In 2009, North Dakota sported the largest budget surplus it had ever had.
The Wall Street Credit Crisis Is Crippling State and Municipal Governments
That state budget deficits are reaching crisis proportions was underscored in the January 19 New York Times:
[A]lmost everywhere the fiscal crisis of states has grown more acute. Rainy day funds are drained, cities and towns have laid off more than 200,000 people, and Arizona even has leased out its state office building. . . .
“It’s the time of the once unthinkable . . . ,” noted Lori Grange, deputy director of the Pew Center on the States. “Whether there are tax increases or dramatic cuts to education and vital services, the crisis is bad . . . .”
The “once unthinkable” includes not only draconian cuts in services, increases in taxes, and sale of public assets, but now filing for bankruptcy. States are not currently allowed to go bankrupt, but a move is afoot in Congress to change all that. Bankruptcy proceedings would allow states to escape pension and other contractual obligations, following the dubious lead of such megacorporations as General Motors and Continental Airlines.
Meanwhile, fears of state bankruptcy have caused state and municipal bond values to plummet and borrowing costs to soar. As with Greece and Ireland, rumors of bankruptcy become a self-fulfilling prophecy, bringing out the hedge funds and short sellers that turn prophecy into reality.
Addressing the Problem at Its Source: The North Dakota Model
While drastic spending cuts are being proposed and implemented, the states’ woes are not the result of over-spending. Rather, they were caused by loss of revenues and increased borrowing costs resulting from the Wall Street banking crisis. Jammed with toxic assets, derivatives, and the subprime mortgage debacle, the Wall Street credit machine ground to a halt in the fall of 2008 and has still not recovered.
And it is here, in generating credit for the state, that the Bank of North Dakota has been spectacularly successful. By providing affordable, low interest credit for business expansion, new businesses and students, the BND has helped North Dakota sidestep the credit crisis altogether.
The BND partners with private banks, providing a secondary market for mortgages; offers “wholesale” banking services such as check clearing and liquidity support to private banks; and invests in North Dakota municipal bonds to support economic development. In the last ten years, the BND has returned more than a third of a billion dollars to the state’s general fund. North Dakota is one of the few states to consistently post a budget surplus.
Unlike private banks, public banks don’t speculate or gamble on high risk “financial products.” They don’t pay outrageous salaries and bonuses to their management, who are salaried civil servants. The profits of the bank are all returned to the only shareholder - the people.
Washington State Representative Bob Hasegawa, a prime sponsor of the Washington legislation, called the proposal for a publicly-owned bank “a simple concept that will reap huge benefits for Washington.” In a letter to constituents, he explained, “The concept (is) to keep taxpayers’ money working here in Washington to build our economy. Currently, all tax revenues go into a ‘Concentration Account’ held by the Bank of America. BoA makes money off our money and we never see those profits again. Instead, we can create our own institution and keep taxpayers’ dollars here in Washington, working for Washington.”
Hasegawa said a key feature of the Washington banking institution is that it will work in partnership with financial institutions, community-based organizations, economic development groups, guaranty agencies, and others. He said the Washington Investment Trust will offer “transparency, accountability, and accuracy of financial reporting,” a welcome change from the accounting tricks common among the large Wall Street money center banks today.
A public hearing on HB 1320 is scheduled for Tuesday, January 25th, at 1:30pm. The bill is assigned to the Business and Financial Services Committee in the House and the Financial Institutions, Housing & Insurance Committee in the Senate.
For more information on the movement for publicly-owned banks, see http://PublicBankingInstitute.org.
Monday, January 24, 2011
Thursday, January 13, 2011
Public Banking Institute Launched
Seeks to Rescue U.S. Public Finances
There is mounting evidence that the public finances of the United States are verging on collapse.
The national debt has burdened the American people with a debt service – the cost of interest – that threatens to swallow the entire federal budget in years ahead.
States from New Jersey to Illinois, Texas and California are grappling with immense budget deficits. At least fifteen major U.S. cities are reported on the verge of bankruptcy. In a desperate attempt to stave off calamity, state and municipal governments are taking measures that many view as a worse calamity.
Police, firefighters, health care providers and teachers are being laid off. City street lights are turned off at night, responses to 911 calls are provided on a “fee for service” basis, public parks are abandoned and infrastructure vital to commerce is left to decay to third world status. Unemployment is chronic and home foreclosures roll on.
Americans are wondering if there is a way out of what now appears to many as a decades long and accelerating decline of the fortunes of the once fabled American middle class.
A diverse group of American educators, entrepreneurs and businesspeople, local government officials and civic leaders, economists, writers, lawyers and others think they have identified the central problem.
They have banded together to form the Public Banking Institute (PBI), a not-for-profit educational organization that hopes to explain to the American people how a national network of publicly owned banks can revive the American economy.
Ellen Hodgson Brown, founder of the Public Banking Institute is the author of “Web of Debt,” a groundbreaking and frequently cited diagnostic and prescriptive analysis of the American money system. In her view, American banking and finance have been turned upside down.
“We are in an era where the public is being required to lend to private banks, even though banks were originally supposed to lend to the public. What we have now is a system where bank profits are privatized but bank losses are shared by the public.
“We’ve bailed out banks because we know credit is essential to society, like a public utility such as electricity and water – without it, our economic system fails. So, in essence, the supply of credit has more to do with public and governmental services and less to do with private enterprise.”
Brown notes that public banks were introduced by the Quakers in the original colony of Pennsylvania.
“The Quakers were known as the ‘Society of Friends.’ Their public banking concept was a fore-runner of the PSFS – the Philadelphia Savings Fund Society. The word ‘society’ is telling. We want to put the needs and economic aspirations of the whole of the American society back into the banking picture.
“The Public Banking Institute will explore how credit is created using public resources, how to price it competitively, and how to use it as a low-cost alternative that benefits the free market and the public.”
Marc Armstrong is a self described “Philly Boy” who thinks that Quaker legacy offers a lesson and a way forward for the nation.
A former IBM Finance account manager specializing in wholesale banking and a communications expert, Armstrong led the team that created the PBI website (www.publicbankinginstitute.org). He is now organizing a Public Banking Conference that will bring together the thinking, ideas and efforts underway in more than a dozen states to get public banking more widely established in the U.S.
The model that the PBI points to is the public Bank of North Dakota (BND), formed just after the creation of the Federal Reserve as an alternative to control of money and credit by the Fed and major Wall Street banks.
The web site Armstrong helped create makes repeated reference to the contributions the bank has made to the prosperity of North Dakota, one of the few states to run a budget surplus, where unemployment is low and wages and have been rising, bucking the national trend.
The BND makes low interest loans to students, start-ups and existing small and mid-sized businesses, provides a market for municipal bonds and a secondary market for mortgages, and in the past ten years has contributed over $400 million to the state’s general fund.
“And that is in a small state,” Armstrong is quick to observe. “Imagine what can be accomplished with public banking in larger states, with larger populations and greater volumes of economic activity.”
He explains that one of the first tasks of the PBI “is to help people understand what public banking is, and as important, what it is not.” Armstrong ticks off major points from the PBI web site.
“Public banks are owned and operated as public institutions in the governmental jurisdiction in which they are created. They are operated by professional bankers and not as boondoggles for bank executives. Rather, their employees are salaried public servants paid with a transparent pay structure and are not rewarded with bonuses, commissions or fees for generating loans and financial gimmicks. Pubic banks are not speculative ventures that risk failure to maximize profit. Public banks are able to offset tax increases with returned credit income to the community and are ready sources of credit for local governments, eliminating the need for large ‘rainy day’ funds. The costs of public projects financed by public banks are also greatly reduced, because public banks do not need to charge interest to themselves. Eliminating interest has been shown to reduce the cost of such projects, on average, by 50%.”
As quickly, Armstrong makes one other point, perhaps looking to head off critics that see competition for private banks.
“Public banks partner with and compliment the private banks and provide traditional wholesale banking services, like check clearing. There are more private banks per capita in North Dakota than any state in the nation.”
I asked Ellen Brown if it all didn’t sound just a little too good to be true?
“It’s amazing, isn’t it? I think the Bank of North Dakota is a better kept secret than the codes that follow the president to launch nuclear weapons. But the facts speak for themselves. The job of the PBI is to get those facts out, bring together all the best ideas around public banking, and equip people of states, or cities or counties to review the information and decide which way to go.”
It’s pretty clear which way the PBI hopes to take banking in the United States.
“Public banks are in our interest as a nation, so they must be in our future,” says Ellen Brown.
There is mounting evidence that the public finances of the United States are verging on collapse.
The national debt has burdened the American people with a debt service – the cost of interest – that threatens to swallow the entire federal budget in years ahead.
States from New Jersey to Illinois, Texas and California are grappling with immense budget deficits. At least fifteen major U.S. cities are reported on the verge of bankruptcy. In a desperate attempt to stave off calamity, state and municipal governments are taking measures that many view as a worse calamity.
Police, firefighters, health care providers and teachers are being laid off. City street lights are turned off at night, responses to 911 calls are provided on a “fee for service” basis, public parks are abandoned and infrastructure vital to commerce is left to decay to third world status. Unemployment is chronic and home foreclosures roll on.
Americans are wondering if there is a way out of what now appears to many as a decades long and accelerating decline of the fortunes of the once fabled American middle class.
A diverse group of American educators, entrepreneurs and businesspeople, local government officials and civic leaders, economists, writers, lawyers and others think they have identified the central problem.
They have banded together to form the Public Banking Institute (PBI), a not-for-profit educational organization that hopes to explain to the American people how a national network of publicly owned banks can revive the American economy.
Ellen Hodgson Brown, founder of the Public Banking Institute is the author of “Web of Debt,” a groundbreaking and frequently cited diagnostic and prescriptive analysis of the American money system. In her view, American banking and finance have been turned upside down.
“We are in an era where the public is being required to lend to private banks, even though banks were originally supposed to lend to the public. What we have now is a system where bank profits are privatized but bank losses are shared by the public.
“We’ve bailed out banks because we know credit is essential to society, like a public utility such as electricity and water – without it, our economic system fails. So, in essence, the supply of credit has more to do with public and governmental services and less to do with private enterprise.”
Brown notes that public banks were introduced by the Quakers in the original colony of Pennsylvania.
“The Quakers were known as the ‘Society of Friends.’ Their public banking concept was a fore-runner of the PSFS – the Philadelphia Savings Fund Society. The word ‘society’ is telling. We want to put the needs and economic aspirations of the whole of the American society back into the banking picture.
“The Public Banking Institute will explore how credit is created using public resources, how to price it competitively, and how to use it as a low-cost alternative that benefits the free market and the public.”
Marc Armstrong is a self described “Philly Boy” who thinks that Quaker legacy offers a lesson and a way forward for the nation.
A former IBM Finance account manager specializing in wholesale banking and a communications expert, Armstrong led the team that created the PBI website (www.publicbankinginstitute.org). He is now organizing a Public Banking Conference that will bring together the thinking, ideas and efforts underway in more than a dozen states to get public banking more widely established in the U.S.
The model that the PBI points to is the public Bank of North Dakota (BND), formed just after the creation of the Federal Reserve as an alternative to control of money and credit by the Fed and major Wall Street banks.
The web site Armstrong helped create makes repeated reference to the contributions the bank has made to the prosperity of North Dakota, one of the few states to run a budget surplus, where unemployment is low and wages and have been rising, bucking the national trend.
The BND makes low interest loans to students, start-ups and existing small and mid-sized businesses, provides a market for municipal bonds and a secondary market for mortgages, and in the past ten years has contributed over $400 million to the state’s general fund.
“And that is in a small state,” Armstrong is quick to observe. “Imagine what can be accomplished with public banking in larger states, with larger populations and greater volumes of economic activity.”
He explains that one of the first tasks of the PBI “is to help people understand what public banking is, and as important, what it is not.” Armstrong ticks off major points from the PBI web site.
“Public banks are owned and operated as public institutions in the governmental jurisdiction in which they are created. They are operated by professional bankers and not as boondoggles for bank executives. Rather, their employees are salaried public servants paid with a transparent pay structure and are not rewarded with bonuses, commissions or fees for generating loans and financial gimmicks. Pubic banks are not speculative ventures that risk failure to maximize profit. Public banks are able to offset tax increases with returned credit income to the community and are ready sources of credit for local governments, eliminating the need for large ‘rainy day’ funds. The costs of public projects financed by public banks are also greatly reduced, because public banks do not need to charge interest to themselves. Eliminating interest has been shown to reduce the cost of such projects, on average, by 50%.”
As quickly, Armstrong makes one other point, perhaps looking to head off critics that see competition for private banks.
“Public banks partner with and compliment the private banks and provide traditional wholesale banking services, like check clearing. There are more private banks per capita in North Dakota than any state in the nation.”
I asked Ellen Brown if it all didn’t sound just a little too good to be true?
“It’s amazing, isn’t it? I think the Bank of North Dakota is a better kept secret than the codes that follow the president to launch nuclear weapons. But the facts speak for themselves. The job of the PBI is to get those facts out, bring together all the best ideas around public banking, and equip people of states, or cities or counties to review the information and decide which way to go.”
It’s pretty clear which way the PBI hopes to take banking in the United States.
“Public banks are in our interest as a nation, so they must be in our future,” says Ellen Brown.
Wednesday, January 12, 2011
Targeting Public Employees
By: Robert Reich
View this story online at: http://www.alternet.org/story/149435/
In 1968, 1,300 sanitation workers in Memphis went on strike. The Rev. Martin Luther King, Jr. came to support them. That was where he lost his life. Eventually Memphis heard the grievances of its sanitation workers. And in subsequent years millions of public employees across the nation have benefited from the job protections they’ve earned.
But now the right is going after public employees.
Public servants are convenient scapegoats. Republicans would rather deflect attention from corporate executive pay that continues to rise as corporate profits soar, even as corporations refuse to hire more workers. They don’t want stories about Wall Street bonuses, now higher than before taxpayers bailed out the Street. And they’d like to avoid a spotlight on the billions raked in by hedge-fund and private-equity managers whose income is treated as capital gains and subject to only a 15 percent tax, due to a loophole in the tax laws designed specifically for them.
It’s far more convenient to go after people who are doing the public’s work - sanitation workers, police officers, fire fighters, teachers, social workers, federal employees – to call them “faceless bureaucrats” and portray them as hooligans who are making off with your money and crippling federal and state budgets. The story fits better with the Republican’s Big Lie that our problems are due to a government that’s too big.
Above all, Republicans don’t want to have to justify continued tax cuts for the rich. As quietly as possible, they want to make them permanent.
But the right’s argument is shot-through with bad data, twisted evidence, and unsupported assertions.
They say public employees earn far more than private-sector workers. That’s untrue when you take account of level of education. Matched by education, public sector workers actually earn less than their private-sector counterparts.
The Republican trick is to compare apples with oranges — the average wage of public employees with the average wage of all private-sector employees. But only 23 percent of private-sector employees have college degrees; 48 percent of government workers do. Teachers, social workers, public lawyers who bring companies to justice, government accountants who try to make sure money is spent as it should be - all need at least four years of college.
Compare apples to apples and and you’d see that over the last fifteen years the pay of public sector workers has dropped relative to private-sector employees with the same level of education. Public sector workers now earn 11 percent less than comparable workers in the private sector, and local workers 12 percent less. (Even if you include health and retirement benefits, government employees still earn less than their private-sector counterparts with similar educations.)
Here’s another whopper. Republicans say public-sector pensions are crippling the nation. They say politicians have given in to the demands of public unions who want only to fatten their members’ retirement benefits without the public noticing. They charge that public-employee pensions obligations are out of control.
Some reforms do need to be made. Loopholes that allow public sector workers to “spike” their final salaries in order to get higher annuities must be closed. And no retired public employee should be allowed to “double dip,” collecting more than one public pension.
But these are the exceptions. Most public employees don’t have generous pensions. After a career with annual pay averaging less than $45,000, the typical newly-retired public employee receives a pension of $19,000 a year. Few would call that overly generous.
And most of that $19,000 isn’t even on taxpayers’ shoulders. While they’re working, most public employees contribute a portion of their salaries into their pension plans. Taxpayers are directly responsible for only about 14 percent of public retirement benefits. Remember also that many public workers aren’t covered by Social Security, so the government isn’t contributing 6.25 of their pay into the Social Security fund as private employers would.
Yes, there’s cause for concern about unfunded pension liabilities in future years. They’re way too big. But it’s much the same in the private sector. The main reason for underfunded pensions in both public and private sectors is investment losses that occurred during the Great Recession. Before then, public pension funds had an average of 86 percent of all the assets they needed to pay future benefits — better than many private pension plans.
The solution is no less to slash public pensions than it is to slash private ones. It’s for all employers to fully fund their pension plans.
The final Republican canard is that bargaining rights for public employees have caused state deficits to explode. In fact there’s no relationship between states whose employees have bargaining rights and states with big deficits. Some states that deny their employees bargaining rights - Nevada, North Carolina, and Arizona, for example, are running giant deficits of over 30 percent of spending. Many that give employees bargaining rights — Massachusetts, New Mexico, and Montana — have small deficits of less than 10 percent.
Public employees should have the right to bargain for better wages and working conditions, just like all employees do. They shouldn’t have the right to strike if striking would imperil the public, but they should at least have a voice. They often know more about whether public programs are working, or how to make them work better, than political appointees who hold their offices for only a few years.
Don’t get me wrong. When times are tough, public employees should have to make the same sacrifices as everyone else. And they are right now. Pay has been frozen for federal workers, and for many state workers across the country as well.
But isn’t it curious that when it comes to sacrifice, Republicans don’t include the richest people in America? To the contrary, they insist the rich should sacrifice even less, enjoying even larger tax cuts that expand public-sector deficits. That means fewer public services, and even more pressure on the wages and benefits of public employees.
It’s only average workers – both in the public and the private sectors – who are being called upon to sacrifice.
This is what the current Republican attack on public-sector workers is really all about. Their version of class warfare is to pit private-sector workers against public servants. They’d rather set average working people against one another – comparing one group’s modest incomes and benefits with another group’s modest incomes and benefits – than have Americans see that the top 1 percent is now raking in a bigger share of national income than at any time since 1928, and paying at a lower tax rate. And Republicans would rather you didn’t know they want to cut taxes on the rich even more.
Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama's transition advisory board. His latest book is Supercapitalism.
View this story online at: http://www.alternet.org/story/149435/
In 1968, 1,300 sanitation workers in Memphis went on strike. The Rev. Martin Luther King, Jr. came to support them. That was where he lost his life. Eventually Memphis heard the grievances of its sanitation workers. And in subsequent years millions of public employees across the nation have benefited from the job protections they’ve earned.
But now the right is going after public employees.
Public servants are convenient scapegoats. Republicans would rather deflect attention from corporate executive pay that continues to rise as corporate profits soar, even as corporations refuse to hire more workers. They don’t want stories about Wall Street bonuses, now higher than before taxpayers bailed out the Street. And they’d like to avoid a spotlight on the billions raked in by hedge-fund and private-equity managers whose income is treated as capital gains and subject to only a 15 percent tax, due to a loophole in the tax laws designed specifically for them.
It’s far more convenient to go after people who are doing the public’s work - sanitation workers, police officers, fire fighters, teachers, social workers, federal employees – to call them “faceless bureaucrats” and portray them as hooligans who are making off with your money and crippling federal and state budgets. The story fits better with the Republican’s Big Lie that our problems are due to a government that’s too big.
Above all, Republicans don’t want to have to justify continued tax cuts for the rich. As quietly as possible, they want to make them permanent.
But the right’s argument is shot-through with bad data, twisted evidence, and unsupported assertions.
They say public employees earn far more than private-sector workers. That’s untrue when you take account of level of education. Matched by education, public sector workers actually earn less than their private-sector counterparts.
The Republican trick is to compare apples with oranges — the average wage of public employees with the average wage of all private-sector employees. But only 23 percent of private-sector employees have college degrees; 48 percent of government workers do. Teachers, social workers, public lawyers who bring companies to justice, government accountants who try to make sure money is spent as it should be - all need at least four years of college.
Compare apples to apples and and you’d see that over the last fifteen years the pay of public sector workers has dropped relative to private-sector employees with the same level of education. Public sector workers now earn 11 percent less than comparable workers in the private sector, and local workers 12 percent less. (Even if you include health and retirement benefits, government employees still earn less than their private-sector counterparts with similar educations.)
Here’s another whopper. Republicans say public-sector pensions are crippling the nation. They say politicians have given in to the demands of public unions who want only to fatten their members’ retirement benefits without the public noticing. They charge that public-employee pensions obligations are out of control.
Some reforms do need to be made. Loopholes that allow public sector workers to “spike” their final salaries in order to get higher annuities must be closed. And no retired public employee should be allowed to “double dip,” collecting more than one public pension.
But these are the exceptions. Most public employees don’t have generous pensions. After a career with annual pay averaging less than $45,000, the typical newly-retired public employee receives a pension of $19,000 a year. Few would call that overly generous.
And most of that $19,000 isn’t even on taxpayers’ shoulders. While they’re working, most public employees contribute a portion of their salaries into their pension plans. Taxpayers are directly responsible for only about 14 percent of public retirement benefits. Remember also that many public workers aren’t covered by Social Security, so the government isn’t contributing 6.25 of their pay into the Social Security fund as private employers would.
Yes, there’s cause for concern about unfunded pension liabilities in future years. They’re way too big. But it’s much the same in the private sector. The main reason for underfunded pensions in both public and private sectors is investment losses that occurred during the Great Recession. Before then, public pension funds had an average of 86 percent of all the assets they needed to pay future benefits — better than many private pension plans.
The solution is no less to slash public pensions than it is to slash private ones. It’s for all employers to fully fund their pension plans.
The final Republican canard is that bargaining rights for public employees have caused state deficits to explode. In fact there’s no relationship between states whose employees have bargaining rights and states with big deficits. Some states that deny their employees bargaining rights - Nevada, North Carolina, and Arizona, for example, are running giant deficits of over 30 percent of spending. Many that give employees bargaining rights — Massachusetts, New Mexico, and Montana — have small deficits of less than 10 percent.
Public employees should have the right to bargain for better wages and working conditions, just like all employees do. They shouldn’t have the right to strike if striking would imperil the public, but they should at least have a voice. They often know more about whether public programs are working, or how to make them work better, than political appointees who hold their offices for only a few years.
Don’t get me wrong. When times are tough, public employees should have to make the same sacrifices as everyone else. And they are right now. Pay has been frozen for federal workers, and for many state workers across the country as well.
But isn’t it curious that when it comes to sacrifice, Republicans don’t include the richest people in America? To the contrary, they insist the rich should sacrifice even less, enjoying even larger tax cuts that expand public-sector deficits. That means fewer public services, and even more pressure on the wages and benefits of public employees.
It’s only average workers – both in the public and the private sectors – who are being called upon to sacrifice.
This is what the current Republican attack on public-sector workers is really all about. Their version of class warfare is to pit private-sector workers against public servants. They’d rather set average working people against one another – comparing one group’s modest incomes and benefits with another group’s modest incomes and benefits – than have Americans see that the top 1 percent is now raking in a bigger share of national income than at any time since 1928, and paying at a lower tax rate. And Republicans would rather you didn’t know they want to cut taxes on the rich even more.
Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama's transition advisory board. His latest book is Supercapitalism.
Wednesday, January 5, 2011
Public Banking
We can help ourselves or wait for Washington
A tidal wave of home foreclosures has battered the United States since the onset of the Second Great Depression. There is more damage to come.
The industry trade group Realty Trac reports that foreclosures in 2009 "shattered all records... jumping 21 percent from 2008 and 120 percent from 2007."
Realty Trac reports that 6,285 Pennsylvania properties were foreclosed in October of 2010 - one in every 875 Pennsylvania housing units. That is a 9 percent increase from the previous month and 13 percent above the level reported in October 2009.
Mark Zandi, chief economist at Moody's Analytics, estimates that when the December figures are in, there will be 1.8 million foreclosed homes in the United States in 2010 and that the number will reach 2.1 million in 2011.
In Bucks County, 307 homes were foreclosed in only December of 2010 - a month when the foreclosure mill slows down. But it will be back to business now.
One consequence of home foreclosures is of course homelessness. And while not every family that loses a home winds up on the streets, sleeping in their cars or in tent cities and abandoned buildings (Some can move in with family or friends), many do.
Estimates of the number of homeless vary. The U.S. Department of Housing and Urban Development (HUD) authorizes a "point in time count ," a once and done snap shot taken by social service providers, police departments and other agencies, and estimates that 1.5 million Americans are living on the streets today.
But many are skeptical and believe that like estimates of the unemployed by the federal Bureau of Labor Statistics, the official count of the homeless at best underestimates the scale of the problem, or at worst is meant to disguise it.
Researchers like Jay Levy, author of "Homeless Narratives," put the number at between 2.5 and 3.5 million. It is a number unheard of in modern times, in any of the developed nations of the world. And it will grow in the year ahead.
Dietrich Bonheoffer, the German theologian murdered by the Nazis at the close of World War II once observed, "You can see the sin of respectable people in their flight from responsibility."
Bonheoffer was remarking on the way in which millions of decent, god fearing German Christians closed their eyes and walked away from the evil of the Holocaust that ultimately claimed the lives of 6 million Jews.
But the evil that men do does not always come in the outsized scale of the horror of the Nazis. Sometimes it creeps up on a society, incrementally, bit by bit, at the rate of 2 million foreclosures a year.
But it is no less an evil. Or, if evil sounds too much like a pretext for some do-good, bleeding heart, liberal, tax and spend proposal to help the homeless, try approaching it as a problem for middle class home owners.
The annualized number of foreclosed homes in Bucks County will top 4,000 in 2011, to be added to the thousands of the preceding two years.
There are a lot of unoccupied homes in Bucks County. Who shovels the snow from the sidewalks, or will mow the lawns, or repair a broken shutter or falling down porch?
What do these unoccupied houses do for the already depressed value of the other homes in the neighborhood - in your neighborhood?
And are these homes actually unoccupied, or have they been invaded by the homeless, or become bases of operation for petty crooks and punks, or more sophisticated gangs, criminals and drug dealers, as is being widely reported from Long Island to Arizona to Los Angeles?
Got your attention?
The federal government proposes to do to little either to halt the tidal wave of foreclosures, assist the homeless or save your neighborhood from this growing blight. But there is something that can be done.
The Federal Reserve can pump billions - trillions - into the purchase of municipal bonds, at the same no interest, low interest terms it gave Wall Street. And agencies like the Bucks County Housing Authority can issue those bonds, buy up every foreclosed property in the county at fair market value - residential and commercial both - put crews of the unemployed to work to maintain them, and work with other county agencies to do the job Washington will not, and put people back in those homes and businesses back in the commercial properties.
And if the Fed will not, then a public Bank of Pennsylvania or Bank of Bucks County can be the market for those bonds, just as the public Bank of North Dakota is a market for municipal bonds in that state.
This is one example of what public banks can do for the economy and the American people, and why activity is now under way in more than a dozen states to see how the lessons learned and the success achieved in North Dakota can be shared across the United States.
Or we can wait for Washington.
A tidal wave of home foreclosures has battered the United States since the onset of the Second Great Depression. There is more damage to come.
The industry trade group Realty Trac reports that foreclosures in 2009 "shattered all records... jumping 21 percent from 2008 and 120 percent from 2007."
Realty Trac reports that 6,285 Pennsylvania properties were foreclosed in October of 2010 - one in every 875 Pennsylvania housing units. That is a 9 percent increase from the previous month and 13 percent above the level reported in October 2009.
Mark Zandi, chief economist at Moody's Analytics, estimates that when the December figures are in, there will be 1.8 million foreclosed homes in the United States in 2010 and that the number will reach 2.1 million in 2011.
In Bucks County, 307 homes were foreclosed in only December of 2010 - a month when the foreclosure mill slows down. But it will be back to business now.
One consequence of home foreclosures is of course homelessness. And while not every family that loses a home winds up on the streets, sleeping in their cars or in tent cities and abandoned buildings (Some can move in with family or friends), many do.
Estimates of the number of homeless vary. The U.S. Department of Housing and Urban Development (HUD) authorizes a "point in time count ," a once and done snap shot taken by social service providers, police departments and other agencies, and estimates that 1.5 million Americans are living on the streets today.
But many are skeptical and believe that like estimates of the unemployed by the federal Bureau of Labor Statistics, the official count of the homeless at best underestimates the scale of the problem, or at worst is meant to disguise it.
Researchers like Jay Levy, author of "Homeless Narratives," put the number at between 2.5 and 3.5 million. It is a number unheard of in modern times, in any of the developed nations of the world. And it will grow in the year ahead.
Dietrich Bonheoffer, the German theologian murdered by the Nazis at the close of World War II once observed, "You can see the sin of respectable people in their flight from responsibility."
Bonheoffer was remarking on the way in which millions of decent, god fearing German Christians closed their eyes and walked away from the evil of the Holocaust that ultimately claimed the lives of 6 million Jews.
But the evil that men do does not always come in the outsized scale of the horror of the Nazis. Sometimes it creeps up on a society, incrementally, bit by bit, at the rate of 2 million foreclosures a year.
But it is no less an evil. Or, if evil sounds too much like a pretext for some do-good, bleeding heart, liberal, tax and spend proposal to help the homeless, try approaching it as a problem for middle class home owners.
The annualized number of foreclosed homes in Bucks County will top 4,000 in 2011, to be added to the thousands of the preceding two years.
There are a lot of unoccupied homes in Bucks County. Who shovels the snow from the sidewalks, or will mow the lawns, or repair a broken shutter or falling down porch?
What do these unoccupied houses do for the already depressed value of the other homes in the neighborhood - in your neighborhood?
And are these homes actually unoccupied, or have they been invaded by the homeless, or become bases of operation for petty crooks and punks, or more sophisticated gangs, criminals and drug dealers, as is being widely reported from Long Island to Arizona to Los Angeles?
Got your attention?
The federal government proposes to do to little either to halt the tidal wave of foreclosures, assist the homeless or save your neighborhood from this growing blight. But there is something that can be done.
The Federal Reserve can pump billions - trillions - into the purchase of municipal bonds, at the same no interest, low interest terms it gave Wall Street. And agencies like the Bucks County Housing Authority can issue those bonds, buy up every foreclosed property in the county at fair market value - residential and commercial both - put crews of the unemployed to work to maintain them, and work with other county agencies to do the job Washington will not, and put people back in those homes and businesses back in the commercial properties.
And if the Fed will not, then a public Bank of Pennsylvania or Bank of Bucks County can be the market for those bonds, just as the public Bank of North Dakota is a market for municipal bonds in that state.
This is one example of what public banks can do for the economy and the American people, and why activity is now under way in more than a dozen states to see how the lessons learned and the success achieved in North Dakota can be shared across the United States.
Or we can wait for Washington.
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