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Khavari: The era of commercial banks is over; state banks are the future.

Posted on 20 November 2009 by admin

Farid Khavari

Farid Khavari

Miami, FL   — Noted economist Farid Khavari, a  Democratic candidate for Florida governor, has gained national and international attention for his plan to create a state-owned bank in Florida.

“Not since the Great Depression has it been so clear,” said Khavari. “We need banks that work for the benefit of the people, not people working for the benefit of the banks. There is no mystery why we are facing another depression: the banks got greedy and stupid, and now they are making us pay for it.

“The economy is collapsing due to lack of demand. The economy needs money, but the banks are cutting credit, and then sucking all the cash out of the economy by raising interest rates to make sure no one has any cash left at the end of the month. The cost of interest is built into the cost of everything. People already work ten years of their lives just to pay interest in one form or another. The Bank of the State of Florida will end that for Floridians. And this model will work for every state.

“We can start the BSF at no cost to taxpayers. We can pay 6% interest on savings. Using the same fractional reserve rules as all banks, we can create $900 of new money through loans for every $100 in deposits. We can loan that $900 in the form of 2% fixed rate 15-year mortgages, for example, and the state can earn $12 every year for every $100 in deposits. That means Floridians can save tens of billions of dollars per year while the state earns billions making it possible for them.

“2% fixed-rate mortgages will create a thousand times more jobs than any so-called stimulus can.  By reducing the total interest cost on a home by over 85%, the average family will save hundreds of thousands of dollars, and that money stays in Florida,” Khavari said.

“State and local government budgets will balance without higher taxes when the BSF cuts interest costs,” Khavari said. “6% BSF credit cards will save people billions per month, money that stays in Florida instead of going to the big banks—and the state will make huge profits on that, too.  Saving billions in interest costs will create millions of jobs without subsidies just by keeping those billions circulating in Florida. Eventually the state will earn enough to reduce and eliminate state and local taxes while every Floridian has economic security in a recession-proof Florida.”

Asked whether a state-owned bank is socialism, Khavari smiled. “Are public schools socialism? Public roads, police and fire protection, municipal water? Socialism is where everyone works for the state. In these cases, and with our Bank of the State of Florida, the state is working for everyone. I call that general capitalism.”

Farid A. Khavari, Ph.D. is an economist and author of nine books, including Environomics. His latest book, Toward a Zero-Cost Economy, is available in stores or for free download at his website,

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7 Comments For This Post

  1. Helge Nome Says:

    Look at North Dakota! They are doing it already with their Bank of North Dakota:

  2. Susan Says:

    Go Khavari ! ! !
    You have my vote !

  3. Lars Osterman Says:

    This proposal is not bad at all – but it is most definitely controversial as the banking lobby will do everything in its power to kill this initiative.

    Stephen Zarlenga with American Monetary Institute does not like this at all as he seems to think the state should not be in the banking business. I tend to think banking is so crucial for society it is too important to be left to the private usurocracy…therefore I welcome this.

    Someone should tell Greece, Latvia and Iceland about this creative solution.

  4. truthbomb Says:

    Private banks speculate and keep the profits if they win.

    When they lose, the People bail them out.

    Time for a new plan. gives hope to the people to decentralize
    power from Washington and Wall Street just like Jefferson,
    Franklin and Madison designed the Republic.

    When the dollar collapses, the states need to have
    a plan to keep their people working.

  5. Chales B. Lawson Says:

    Dr. Khavari is the only gubernatorial candidate with an economic plan to create over one million new jobs in the state of Florida in the private sector without subsidies. No other candidates even have a clue about creating jobs in Florida.

    We must get Khavari into the office before it is too late.

  6. steven Says:

    Great idea Mr. Khavari. I’ve just sent some money to your campaign and will work to help make you governor!!

  7. blachy ral Says:

    Look at my blog about the same thind

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