while the Fed continues playing parlor tricks to try and stimulate the economy, a much simpler method of igniting long-term economic growth and stability exists in North Dakota. Yes, North Dakota, a state operating with a surplus of cash and unemployment at 4%. In the early 1900’s the economy of North Dakota was agriculture-based, and the farmers there were experiencing serious financial problems that prevented them from buying and selling crops and financing farm operations. Grain dealers from out-of-state controlled prices and kept them artificially low, while farm suppliers continually increased their prices. To no one’s surprise, interest rates on loans climbed.
By 1919 the people of North Dakota had had enough and wanted state ownership and control of marketing and credit agencies, and so the legislature established the Bank of North Dakota. Its mission: to promote the development of agriculture, commerce and industry in ND. The Bank of North Dakota is a public bank that is robustly solvent, with a strong record of financing loans for agriculture, housing and higher education, as well as funding municipal bonds. All tax revenues and fees in the state go into the State Bank, allowing North Dakota to finance construction of roads, bridges and other infrastructure, maintain schools and libraries, and assist local businesses.
The Bank of North Dakota is truly a peoples’ bank that exists for the benefit of the state and its residents, only, with loans made at low interest rates and no bloated, outrageous CEO salaries and benefits that squander funds. And no shady derivatives allowed, either; a novel concept indeed. For 91 years the bank has flourished and North Dakota today is a rare example of economic strength in a sea of debt-ridden states that must slash services and raise taxes to stay afloat, giving a whole new meaning to the term “red states.