FT 7-06: Bank of Fremont Act (Passed)

[The world will shine with light in our nightmare]

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Sponsor: Speaker Scott

72 hours of debate, 24 hours for the sponsor to explain and advocate.

[The world will shine with light in our nightmare]

Nearly one hundred years ago, a small rural state called North Dakota became the first – and to this day, the only – state in the union of the Republic to adopt its own state-run bank.  It was formed because of the belief that the state’s farmers were being exploited with high interest rates.  Today, the Bank provides an indispensable service to all the state’s financial institutions and state agencies, as well as and especially, the private sector.

As the Senate considers legislation to eliminate federal banking programs, which help countless people involved in agriculture, small business, energy, housing, telecommunications, waste disposal, and transportation, it is important that we adopt this measure to to sustain economic growth in Fremont.  With that, it must be said said the Bank of Fremont can only be successful if it partners with the Commonwealth’s financial institutions, not competitors.

The Bank’s primary service must be to aid Fremont’s state institutions and agencies, and in the situations in which it deals directly with Fremont residents, it is to fill a need that is underserved and for which the private sector has required our involvement.  And, like all government institutions, Parliament must ensure strict oversight of this Bank, lest we fail financially or lose out to corruption and misconduct.

In the future, should our experiment in public banking be successful, the next step should logically be towards expanding opportunities for education and strengthening our infrastructure.  However, almost all of the text of this bill was taken and modified from the original 1919 North Dakota law.  The cost for this bank is a mere fraction of our budget surplus, even after being measured for inflation.  And though I encourage Members to read the law for themselves, it has been peer-reviewed for legal soundness by Mr. Reactionary, whom as you might expect, is not a fan of this “socialist bank bill.”  But I digress.

Put simply, the mission of Bank of Fremont will be to promote agriculture, commerce, and industry in the Commonwealth.  I urge the honorable members to support commerce, support renewable energy, support our farmers and innovators, and support local business, by voting for this legislation.

[Goldwater]

I'll be honest, part of has a knee-jerk reaction against a large scale government project like this.

Having said that though, this looks like it might not actually be a bad idea. As long as this is well managed, it seems like it could only help with economic growth and prosperity. I would be curious to hear what the argument against this would be, since I don't have one.

[YE]

Vague and hard to answer question but how confident should we be that the bank won't collapse?

[The world will shine with light in our nightmare]

I'll be honest, part of has a knee-jerk reaction against a large scale government project like this.

Having said that though, this looks like it might not actually be a bad idea. As long as this is well managed, it seems like it could only help with economic growth and prosperity. I would be curious to hear what the argument against this would be, since I don't have one.

I figured if a little bit of socialism works in North Dakota, it can pretty much work anywhere.

Vague and hard to answer question but how confident should we be that the bank won't collapse?

Given that the bank would be state-run, I'm not sure if it could 'collapse' in the same way traditional banks do.  The best prototype we have for this would be the BND, which survived both the Depression and the Great Recession.  In fact, most of North Dakota was in good economic standing during the Great Recession as it continued to create jobs while every other state was losing jobs.  (And I wouldn't put all the credit for that on the boom-and-bust oil industry, as states which rely more on oil were hit harder by the financial collapse.)

[Mr. Reactionary]

Can confirm ... policy preferences aside, this bill as written is legally sound to accomplish what Scott wants.

[Wikipedia delenda est]

I support this bill. The Bank of North Dakota has proven to be be successful and economically beneficial, so it seems to me that a Bank of Fremont would have the same positive effects.

[The world will shine with light in our nightmare]

Any more questions/comments?

[VPH]

I would be interested in seeing some kind of parliamentary audit process incorporated to ensure that the bank is running smoothly and fulfilling its duties?

[The world will shine with light in our nightmare]

Sure.

Amending to insert a new Section 8 and renumber accordingly:

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Members have 24 hours to object.

[Devout Centrist]

I think this looks good. I'm willing to support this bill.

[The world will shine with light in our nightmare]

Hearing no objection, the amendment is adopted.

[Pericles]

As far as I can tell, this bill is a good bill and would benefit Fremont-and the audit process confirms that judgement. I'd vote aye on this legislation, and I hope the rest of this parliament does so too.

[Coastal Elitist]

I have concerns with this. With government owned banks decisions are driven by politics instead of economics. In the 1800's there were many state owned banks and they all failed miserably at the expense of the taxpayer. Studies have found that state run banks lower economic growth.

[The world will shine with light in our nightmare]

I have concerns with this. With government owned banks decisions are driven by politics instead of economics. In the 1800's there were many state owned banks and they all failed miserably at the expense of the taxpayer. Studies have found that state run banks lower economic growth.

I would request evidence of that, but if all your examples are from the 1800s then I think they would be rather outdated.  We have one state-run bank in the Republic of Atlasia and it works for everyone.

[Devout Centrist]

I have concerns with this. With government owned banks decisions are driven by politics instead of economics. In the 1800's there were many state owned banks and they all failed miserably at the expense of the taxpayer. Studies have found that state run banks lower economic growth.

The Federal Reserve system did not exist in the 19th century. Most of these state banks failed because of bank runs and a lack of public confidence in the solvency of the institutions. Because there was no lender of last resort nor reserves to guarantee deposits, most of these banks failed.

[The world will shine with light in our nightmare]

We've passed the 72-hour mark... any more arguments or comments?

[Coastal Elitist]

The Bank of North Dakota is a massive subsidy to the fossil fuel industry. A bulk of its below market lending has been to the fossil fuel industry. This is typical of government-owned banks, which tend to subsidize the powerful and connected. Additionally, much of the bank's credit risk is ultimately shifted to the federal government, particularly through its federally guaranteed student loans.

Research has been done that shows that higher government ownership of banks is associated with slower subsequent development of the financial system, lower economic growth, and, in particular, lower growth of productivity. https://goo.gl/6PppqG

Another issue is that the vast majority of funding for the Bank of North Dakota comes from the state's deposits, much of which is generated from tax and fee revenue. The bank is able to offer below-market rate loans to borrowers because it pays the state less interest on its deposits.

This is essentially a hidden subsidy. Had North Dakota kept its deposits with private banks, it would have received more interest on its deposits. The setup therefore functions as a transfer from taxpayers to borrowers. Rarely is such a lack of transparency in the interests of the general public.

[The world will shine with light in our nightmare]

Calling the Bank of North Dakota a massive subsidy to the fossil fuel industry is a little unfair when fossil fuels are a staple of the state's economy.  The bill as written would give energy-heavy boom-and-bust states in the Commonwealth the chance to diversify their economies and expand entrepreneurship, as it lessens the loan risks of private banks and helps them finance larger projects.  This bank, like the BND, would not pay any taxes to the government.  Fremont also have a hefty surplus in case of any losses, so taxpayers would not be left on the hook.

Arguably, there is less risk in establishing this bank in the region now than at any other time, when our economy is thriving and growing in multiple sectors - especially in technology.  We would bear even less risk than North Dakota did at the time their bank was first established.  No one is accusing North Dakota of having lower productivity or economic growth.

As for "lack of transparency," I feel as though our last amendment addressed this problem.  All activities of the bank will be public record and posted on a weekly basis, with a mandatory annual audit from Parliament.  The people's money will remain the people's money.

[The world will shine with light in our nightmare]

Also, would you shorten your url, please?

[Southern Delegate matthew27]

We've passed the 72-hour mark... any more arguments or comments?

More government within my mind is a good idea. Time to start pushing back against the small government types that want to abolish all government that has done nothing but fail these past 40 years. A central Bank for Fremont would be a great idea as it would provide stability within the banking sector. I'll vote for it!

House member Trumpsucks,

[_]

We've passed the 72-hour mark... any more arguments or comments?

More government within my mind is a good idea. Time to start pushing back against the small government types that want to abolish all government that has done nothing but fail these past 40 years. A central Bank for Fremont would be a great idea as it would provide stability within the banking sector. I'll vote for it!

House member Trumpsucks,

Sir, can you please post again what you said before?  Before you edited it away?  I believe it was something to the effect of sending those who believe in Small Government to Somalia?

[Southern Delegate matthew27]

We've passed the 72-hour mark... any more arguments or comments?

More government within my mind is a good idea. Time to start pushing back against the small government types that want to abolish all government that has done nothing but fail these past 40 years. A central Bank for Fremont would be a great idea as it would provide stability within the banking sector. I'll vote for it!

House member Trumpsucks,

Sir, can you please post again what you said before?  Before you edited it away?  I believe it was something to the effect of sending those who believe in Small Government to Somalia?

I didn't say that. I said making Fremont into Somalia. Sorry for the misunderstanding.

[_]

We've passed the 72-hour mark... any more arguments or comments?

More government within my mind is a good idea. Time to start pushing back against the small government types that want to abolish all government that has done nothing but fail these past 40 years. A central Bank for Fremont would be a great idea as it would provide stability within the banking sector. I'll vote for it!

House member Trumpsucks,

Sir, can you please post again what you said before?  Before you edited it away?  I believe it was something to the effect of sending those who believe in Small Government to Somalia?

I didn't say that. I said making Fremont into Somalia. Sorry for the misunderstanding.

Ah, my fault for misinterpreting then.  Apologies.

[Coastal Elitist]

We've passed the 72-hour mark... any more arguments or comments?

More government within my mind is a good idea. Time to start pushing back against the small government types that want to abolish all government that has done nothing but fail these past 40 years. A central Bank for Fremont would be a great idea as it would provide stability within the banking sector. I'll vote for it!

House member Trumpsucks,

Reseach shows that government ownership of banks is not a good idea. It's not me saying this. I'm going off the research.