Stemming the Transfer of Wealth from Main Street to Wall Street with Publicly-Owned Banks

From the Editor:

As 2013 draws to a close, state, local, and federal governments are battling debt and interest burdens that are greater than ever. Their receipts are down and their bills are up. The only alternative has been to borrow – at interest – creating an exponentially growing debt. While “conservatives” express alarm at the ever-increasing debt levels and “liberals” denounce calls for austerity and cuts in essential services, there is one concern that should be shared by the 99%: Borrowing at interest increases costs and debt and transfers wealth out of our communities and into the pockets of wall street financiers, unless we borrow from our own publicly-owned banks.

From 2000 to 2010, the total debt of state and local governments increased by a factor of 2.5 from $1.2 trillion to approximately $3 trillion. With burdening compound interest, this increased debt has put a strain on the budgets of states and local communities, which are required to balance their budgets, forcing states and communities to not only cut spending, but, in some cases, take on further debt. Some states, including Californiaand New York, have worked to curb their debt spending as their debt burdens had become increasingly unmanageable.