Pennsylvania Cash Advance Loans

On March 13, 2008, Erik Sirri, director of the SEC's division of trading and markets, told Congress that this credit crisis has spread to municipal bond auctions. "There isn't any question that this recent dislocations inside municipal bond markets are creating unanticipated hardships for municipal issuers along with some instances dramatically increased their borrowing costs," Sirri said. The inability of cities and states to market municipal bonds to investors at reasonable interest levels seriously threatens plans to create new roads, schools, airports as well as other public works projects.1

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Although the price of borrowing is going up for municipal governments, this is not because these are bad credit risks. In fact, these are extremely a good credit rating risks. Creditors know where to get them, and local governments hold the power to tax to cover their bills. The problem lies with the bond insurers called "monolines," that have ventured in to the very risky mortgage-backed securities market. This has put the insurers' triple-A ratings in jeopardy, along using the ratings of the municipal bonds they insure.

While borrowing costs for municipal governments are skyrocketing, a person's eye rate the Federal Reserve charges to s continues to be going down, despite the simple fact that s are proving being much riskier investments than local governments. The Federal Reserve can be a private ing corporation that's belonging to other s. It was established in 1913 to stop runs and otherwise keep your s from stepping into damage to over-leveraging (lending out often their assets), knowing that remains its principal function today. The Federal Reserve recently extended 0 billion in financing to twenty top investment s at wholesale rates, however these low rates usually are not being passed onto municipal governments or home buyers. The Federal Reserve is evidently working for the s more than for taxpayers or local governments.Thinking Outside the Box: The Minnesota Transportation Act

Many people are getting tired of waiting for that Federal Reserve and also the authorities to act, and among them is really a Minnesota resident named Byron Dale. Dale has drafted a bill called "the Minnesota Transportation Act" (MTA), that's scheduled for hearing prior to Minnesota Senate Transportation Committee on March 25, 2008. If adopted, the check could represent a significant innovation inside way state and local projects are funded. It would mandate Minnesota's Transportation Department and State-chartered s to penetrate into a contract providing how the s would advance funds for legislatively-approved transportation projects inside the same method that s make commercial loans - by just "monetizing" the projects themselves. Banks routinely monetize the promissory notes of borrowers simply by making book entries to your checking account and saying "you use a new deposit with us." (More for this below.)

Under the MTA, the state-chartered s would create a pass-through account titled an Asset Monetization Account (AMA), monetizing the bid value of projects. This would be done inside the same way that s monetize collateral, except how the deposit would go on the 's books as an asset as opposed to a liability, turning the bid value of the project into "money" without debt. This money will be debited electronically out with the AMA and credited on the State's Transportation Account (STA), from which it will then be debited out and credited in towards the contractor's account in a state , according for the terms of the contract. The contractor would spend these funds to complete the project. The money would flow into Minnesota's economy, where it could provide for better, safer, tougher roads and bridges. It could be utilized to purchase goods and services, benefiting business. It would go to pay taxes, enhancing the State balance its budget. And it could flow back in to the state-chartered s as interest on outstanding loans, reducing the number of loan defaults and improving the profits in the state-chartered s. In this way, says Dale, the MTA would benefit every segment of society.Too Radical? Maybe Not . . .

Dale says he continues to be proposing this type of state funding alternative for years; only now, with all the looming liquidity crisis, have legislators begun to adopt him seriously. His plan will not be this kind of radical departure from existing practice as it sounds. Commercial s already are inside business of making money. Except for coins, our entire money supply is currently produced by s inside the type of loans.2 Indeed, s create each of the money they lend. This was confirmed through the Chicago Federal Reserve in a booklet called "Modern Money Mechanics," which states:

"Of course, [s] don't really pay out loans from your money they receive as deposits. If they did this, no additional money would be created. What they do after they make loans is to take promissory notes in return for credits towards the borrowers' transaction accounts. Loans (assets) and deposits (liabilities) both rise [by a similar amount]."3

Many other authorities have confirmed this money-creating mechanism of business s.4 State-chartered s obtain authority to generate money from the State, and also the State has the authority to determine the reason which is why s create money. State s have become permitted to generate money to monetize a home loan or any other promise to repay. They could as simply be authorized to "monetize" the promise of contractors to offer labor and materials towards the State in the type of road and bridge repair and construction.

The argument against this creative approach is it can be inflationary, but would it? Inflation results when "demand" (money) increases faster than "supply" (goods and services); and on this case goods and services can be increasing along with the money available to spend, keeping the money supply in balance and prices stable. In fact, it is the lending of income created beyond thin air which is inflationary, because s make the principal and not the interest necessary to cover back their loans. Additional loans must therefore continually be taken out just to service the "money" (or debt) that's already in the money supply; which newly-created money goes into the pockets of middlemen in lieu of contributing on the productivity of the community. "Demand" (money) thus goes up without a corresponding boost in "supply," creating price inflation.

The solution for this conundrum would be to authorize s to monetize the production of real goods and services, creating demand and supply at the same time. There is substantial precedent because of this approach, stretching as far back as the early American colonies:

* In early eighteenth century, the colony of Pennsylvania issued money that was both lent and spent with the local government in to the economy, producing an unprecedented amount of prosperity. This was over not only without producing price inflation but without taxing the people.

* When Abraham Lincoln needed money to invest in the American Civil War, as opposed to paying 25 to 36 percent interest charges, he avoided entering debt by printing Greenback dollars which are "legal tender" in themselves. Again, historians in the period attest that issue of Greenbacks was not in charge of price inflation.

* A successful infrastructure program funded with interest-free "national credit" was instituted in New Zealand after it elected its first Labor government inside 1930s. Credit from its nationalized central allowed New Zealand to thrive in a time when the others in the world was being affected by poverty and lack of productivity.

* The island state of Guernsey, located inside the British Channel Islands, continues to be funding infrastructure with government-issued money for over 200 years, without creating price inflation and without government debt.5 But is It Constitutional?

These governments could create the quantity of money they needed because these folks were sovereign entities, but how about individual States governed by a federal Constitution? In the United States, the U.S. Constitution controls. But that august document says very little about the creation of income - so very little that s have stepped in and brought within the business by default. Here would be the sole Constitutional provisions directly addressing the creation of money:

Article I, Section 8, Clause 5

: The Congress shall have Power...To coin Money, regulate the Value thereof, as well as foreign Coin, and connect the Standard of Weights and Measures.
Article I, Section 10, Clause 1

: No State shall...coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt.

Congress continues to be because of the power to coin money, but minting coins isn't a similar thing as issuing paper money, checkbook money, accounting-entry money, or electronic money - the kinds of money used most often today. Arguably, "to coin" money was an archaic strategy for saying "to create" money, however what is to become made with the clause stating, "No state shall . . . make any Thing but silver and gold Coin a Tender in Payment of Debt"? "Coin" here clearly means precious metal coins, period.

That clause is interesting for another reason: when was the past time you heard of a State paying its debts in gold or silver coin? States routinely pay their debts using the -created accounting-entry money that now composes over 97 percent with the U.S. money supply (M3), knowing that form of cash is omitted from the Constitution altogether. The States therefore violate the Constitution every day, something they must do if they may be to pay for their debts at all, since gold and silver coins are no more generally speaking circulation. The Constitution obviously needs being amended to suit the times. Meanwhile, the Tenth Amendment to the Constitution (part from the Bill of Rights) provides:

X - Rights with the States under Constitution

: The powers not delegated for the united States by the Constitution, nor prohibited by it on the States, are reserved towards the States respectively, or towards the people.
Creating checkbook money just isn't specifically delegated on the United States, therefore it has to be delegated to the States, unless it can be specifically prohibited to them. What about the provision that "No State shall . . . emit Bills of Credit"? According to "the 'Lectric Law Library," "bills of credit are declared to mean promissory notes . . . . Bills of credit might be defined to be paper issued and meant to circulate from the community for its ordinary purposes as money redeemable with a future day." Bills of credit are promises to pay for later in lieu of what's being discussed here: checkbook money issued as "legal tender" - the sort of dollars s issue daily when they make commercial loans. The Constitution doesn't say who is authorized to issue this kind of money - whether in paper, electronic or accounting-entry form - so beneath the Tenth Amendment, this right is reserved to the States and on the People.

As the loan crisis deepens and exposes the inability with the existing ing structure to match the public's needs, creative funding plans similar to the proposed MTA may be popping up in communities across the country. If the U.S. Congress as well as the privately-owned Federal Reserve will not issue the funds required for bridge and road repair and also other urgent public projects, we can easily encourage our State legislators to fill the breach; of course, if they will not do it, we people could possibly get together, apply for any charter, that will create the funding ourselves. (See E. Brown, "How to Start Your Personal Bank," webofdebt.wordpress.com, February 23, 2008.)

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