Readers are concerned about the sorry state of affairs in Illinois.
Specifically, reader Mark asked about Ellen Brown’s July 23 article Saving Illinois: Getting More Bang for the State’s Bucks.
Brown says Illinois pensions have “surplus funds and rainy day funds tucked away around the state.”
That statement alone is enough place her in the looney bin, but it gets much worse.
She proposes guaranteeing the pensions, liquidating them, then paying down the state of Illinois debt. The results would then be “the pension fund would be self-funding; the state would have a bank that could create credit to support the local economy and pensioners would have money to spend, increasing demand.”
Her magic is then compounded because “Better yet, it [the state] could borrow from its own bank and pay the interest to itself. The proceeds could then go to its pensioners rather than to bondholders.”
Why stop with pensioners? Let’s borrow a trillion dollars, pay the interest to ourselves and live happily ever after, stimulating demand. Yeah, right.
If I Only Had a Bank!
As much as I hate central banks (and I do think they should all be eliminated – to be replaced by free markets), bureaucrats in the US would likely do much worse on monetary policy than the central banks.
Please consider this scary video by Ellen Brown.
The idea that North Dakota, a small loosely-populated farm state is in good shape only because it has a state bank is preposterous.
Worse yet, Brown takes that absurd position to the extreme with a proposal to end the Fed and put California and Illinois politicians (state politicians in general) in charge of printing money to support union causes.
Brown understands various problems with the Fed, but proposes a solution that is worse, putting politicians in charge of printing presses.
Mike “Mish” Shedlock