This document presents four multi-trillion dollar paths to a thriving America based on the book "America is Not Broke". The four paths are: 1) Sovereign Money, which argues the government should create debt-free money; 2) Land Value Taxation, which advocates taxing the value of land; 3) Public Banking; and 4) Ending Government Financial Asset Hoarding. The document focuses on explaining Sovereign Money and Land Value Taxation in more detail. It argues that governments could fund public services through collecting $5.3 trillion in economic rent from land rather than through other taxes.

1. 6/25/15
1
Presented by:
To:
Date:
America is Not Broke!
Scott Baker
The Henry George School
6/23/15
4 Multi-Trillion Dollar Paths to a Thriving America
Based on the book “America is Not Broke!” available from Tayen Lane:
https://tayen-lane.squarespace.com/america-is-not-broke
And Amazon: http://amzn.to/1zZQKks
The Big Four: Each worth over a Trillion Dollars per Year
1 Sovereign Money, aka Debt-Free Money
2 Land Value Taxation, aka Georgism
3 Public Banking
4 Ending Government Financial Asset Hoarding (GFAH)
Also, smaller reforms can still add billions to the economy, such as…
 Local Exchange Currency Systems (LETS)*
 Appropriate Regulation – because a criminogenic environment
ultimately costs society more*
All of these super-macro economic solutions have been shown to work
though their proponents don’t always work together. This has to change! To
succeed, we have to stipulate that:
1. People are plastic and can change, at least given the right incentives
2. People are open to reason and persuasion
3. People want something better, even if outside their comfort zone
*These are discussed in more detail in chapter 5 of my book, but I won’t cover them today.
$$$ 1. Sovereign Money $$$
The 4 solutions correspond to the first 4
chapters of my book and the other reforms are
discussed in chapter 5. I don’t expect you to
believe them yet, but you must believe in the 3
stipulations for that to even be possible! It
doesn’t matter if you are a liberal or
conservative, and these are mostly labels
designed to divide us anyway.
The first solution – Sovereign Money
These are, or were, all sovereign money.

2. 7/27/15
2
What is Money?
Is money a “thing”? Money has been
everything from Cowrie shells to beads
to precious metal tokens. Some of these
worked well for a long time, but were all
ultimately limited by the quantity and
availability of the underlying commodity.
Money is:
1. A means of exchange
2. A Store of Value (however imperfect!)
3. Not Wealth! I bought one of these for U.S. $7!
1rst Axiom: Money should exist in sufficient quantity to
meet the Productive Capacity of the Nation.
Modern American money, since coming off the gold standard in the 1971, is purely fiat money. Fiat
Money is not based on a commodity and is simply:
“inconvertible money made legal tender by a government decree (fiat).”
Taxes are one of the main ways Government can make a particular kind of money acceptable as
“legal tender.”
What can Fiat Money do for the Economy?
1 Pay for infrastructure
2 Pay for Social Security
3 Pay for R&D in science, space
programs, foreign aid, education, etc.
4 …Pay for anything that has a positive
money multiplier – e.g. The Money
Multiplier for Social Security is from $1.80
to $2.00 for every dollar spent, according
to 2 independent studies.
If the money multiplier is positive, the
money spent is an investment that pays off
more than the amount spent.
Examples of negative Money Multipliers are tax cuts for the rich – who mostly invest
in non-productive assets like stocks, bonds and land – and military spending, which
produces things that mostly get blown up or can’t be used or repurposed.
But, what have the trillions spent on banks – up to $29 Trillion including rolling loans,
says Professor L. Randall Wray – actually produced, other than asset bubble inflation?
But…what about inflation?
The non-partisan Congressional Budget Office (CBO)
calculates the Output Gap. From Investopedia:
Remember the first axiom: Money should exist in sufficient quantity to meet
the Productive Capacity of the Nation.
The CBO says we averaged a trillion dollar/year
Negative Output Gap from 2008-2013. So, we could
have spent nearly a trillion dollars per year into the real
economy without producing inflation and many
economists say we are still below our productive capacity.
There are other proposals to control inflation too:
including creating a new Government oversight body
called a Monetary Authority (e.g. HR2990).
An economic measure of the difference between the actual
output of an economy and the output it could achieve
when it is most efficient, or at full capacity. There are two
types of output gaps: positive and negative. A positive
output gap occurs when actual output is more than the
full-capacity output. Negative output gap occurs when
actual output is less than full-capacity output.
Has the FRB managed the Value of the Dollar well?
Quantity and Availability are two different things. The
first has to do with the absolute numbers of coins, bills
etc, while the second has to do with how they circulate
and how easy they are to obtain. If someone has a
monopoly of gold coins and gold coins are all the kind
of money there is, the economy will stagnate for lack
of currency availability even if there is sufficient
quantity. Technically, all legal tender is fiat money, but
only money with no commodity value can be said to be
purely fiat money.
Zimbabwe $100 Trillion dollars available from the
Great American Coin Group - http://
www.greatamericancoincompany.com/c120/
Zimbabwe-Notes-2008-AA-Series-c103.html
Professor L. Randal Wray and his 2 Phd students’
study is discussed here: http://
www.huffingtonpost.com/l-randall-wray/bernankes-
obfuscation-con_b_1147291.html
Source for calculating the Output Gap: http://
en.wikipedia.org/wiki/Output_gap
Chart: Fivethirtyeight

3. 6/11/15
3
Why are we Renting our Money when Government could Create it?
Since the Federal Reserve Act of 1913, with minor alterations, the Federal
Government has paid the Federal Reserve Bank for money with interest-bearing
Treasury Bonds whose rate is largely determined by the FRB itself.
But why?
1 The Constitution has a Coinage Clause (Article 1, Section 8, Clause 5), which
allows Congress to “coin Money”*
2 We actually had debt-free paper money in circulation – United States Notes –
from $451m to $300m from 1862-1996**.
3 The Supreme Court ruled in Julliard vs. Greenman (1884) that the
Government may make paper money under the Constitution.
4 We can create electronically any kind of money we can create physically.
* Case structure in the original clause, and lower case ‘c’ was used consistently when referring to ‘coin’ as in ‘to make’ while actual ‘Coin’ was always capitalized.
** Treasury burned its stock in 1996, but U.S. Notes are available on eBay for about twice face value.
United States Note: Note Red seal and wording at top
“United States Note” vs. “Federal Reserve Note”
Why does the Debt matter?
Some schools of thought say the debt doesn’t matter because they
believe that the Federal Reserve Bank (FRB) is already part of
government and so we are already creating our own money. But
consider:
1 The FRB owns only about 18% of Treasury Bonds. The rest are
owned by other entities, including foreign governments like China
(the second largest holder), who use them to depreciate their own
currency and strengthen ours, making their exports more
competitive vs. ours, and ultimately taking away our jobs through
off-shoring.
2 A whole class of very wealthy Rentiers makes a living off the
interest on Treasury Bonds – money that government could issue
itself interest-free.
3 The independent FRB can neutralize government spending with high interest rates precisely when it
is needed the most, during a recession/depression (e.g. The Great Depression).
4 Even in “good times” interest-bearing debt adds as much as 50% to the cost of long-term projects,
including those where the money multiplier shows there is a net benefit!
5 But what about Government corruption? Well, is Government inherently corrupt or is it corrupt
because of the influence of outside money, and if the latter, then would Sovereign Money help end
that corruption?
6 As Thomas Edison said “If the government can create a dollar bond, it can create a dollar bill.”
Who do you trust to create money for the People more:
the Banks or the Government? (We could also have both).
2. Land Value Taxation, aka Georgism
Henry George was a
19th Century
Political-Economist
who wrote the best-
seller “Progress and
Poverty” in which he
identified monopoly
in Land as the cause
of unjust inequality.
It is particularly
evident in dense
urban areas. His
philosophy is called
Georgism.
Modern Monetary Theory (MMT) treats the FRB as
part of the government. Do you agree?
Edison quote: “"If the Nation can issue a dollar bond it
can issue a dollar bill. The element that makes the
bond good makes the bill good also. The difference
between the bond and the bill is that the bond lets
the money broker collect twice the amount of the
bond and an additional 20%. Whereas the currency,
the honest sort provided by the Constitution pays
nobody but those who contribute in some useful way.
It is absurd to say our Country can issue bonds and
cannot issue currency. Both are promises to pay, but
one fattens the usurer and the other helps the
People.” - http://quotes.liberty-tree.ca/quote_blog/
Thomas.Edison.Quote.6991
Land gets value from demand created by ALL of us,
not by the landowner.

4. 6/11/15
4
Location
2nd Axiom: “There is Enough, and to Spare,” (Henry George) for us
all to live a decent life.
But is Location Really that Important?
Well, try to imagine an ultra-lux building like One57,
where condos go for up to $100m, relocated from
midtown Manhattan to midstate New York. How
much would it be worth then?
In fact, NYC is the most densely
productive place in the country with over
$1 billion in GDP per square mile.
Explaining Home Value Change
Sovereign Money will only get you so far. If we
don’t collect the rent on natural resources, the
Rentier will take all the new surplus.
None of these resources were created by a land
owner! They are part our commons and those
who use them should pay rent to all of us!
But Location is perhaps the most important and
highest in value.
Explaining Home Value Change
The real property tax, from the standpoint of economics, is
really two taxes, each with its own very different dynamics. The
tax on structures penalizes maintenance or improvement, and
has no beneficial purpose at all. At the same time real estate
improvements, like all capital goods depreciate over time and
typically constitute an ever smaller proportion of the holding's
market value. It is the other component of the real property tax,
the land site, that appreciates in value, reflecting the ambient
worth of locations of all sites in its vicinity. A land site's value is
a function not of what any titleholder does to his property but is
due rather to the market value placed on locations in a
neighborhood, or even more wide ranging.
When homeowners think of their property appreciating in
market value, beyond from whatever inflation may cause, they
need to understand that it is the land site that appreciates, even
while the building declines in value. Over the course of its
lifetime its value typically declines by half, and the land site
comprises an ever larger proportion of the total property value.
One Federal Reserve Board study calculated that houses
depreciate at a rate of about 1.5 percent annually, and that land
appreciates on average at about 4 percent. Real estate
bubbles in select regions have been known to raise prices by
as much as 20 percent annually for short periods. This rise is
really land value, or the capitalized flow of land rent.

5. 6/11/15
5
The Canons of Taxation
Sources of public revenue should be:
1. Light on production
2. Easy and cheap to collect
3. Certain
4. Fair
"Left-wing" proposals call for society to achieve equity by
redistributing most of the wealth. No distinction is made
between the sources of income (land, labor or capital),
and individuals control only a small portion of the wealth.
Taxing the Fruits of Labor and Capital vs. Collecting Land Value
"Right-wing" proposals hold that efficiency requires more
wealth to remain in private hands (also making no
distinction between rent, wages and interest), and that
society, or government, should only get the minimum it
needs for necessary services, e.g., the role of "traffic cop.”
The Georgist proposal makes a
distinction between the
unearned income of land (rent)
and the earned incomes of
labor and capital (wages and
interest). Rent goes to society,
wages and interest to the
individuals who earned them.
The Georgist proposal achieves the goal
of "left-wingers" for security and social
action, but without restrictions on
liberty. It achieves the goal of "right-
wingers" to attain freedom, but without
privilege and monopoly.
How Bad is it Now? We have Anti-Georgism!
Ultra-Lux Condos like One57 paying less than 1/100th
the property tax rate of Condos costing 1/100th as
much! And many of their owners don’t even live or
spend here!
Parking lots paying
1/10th the property tax
as efficiently used built-
upon property next door!
(36-37 St. & 2nd Ave.)
Vacant Lots paying just $300/year in Property Taxes! (301
East 139th St.)
Meanwhile, nearly 60,000 people are homeless while vacant
and underutilized land is warehoused and under-taxed!
Everyone approves of fairness, of course, but in
terms of taxation, what is fair?
Two basic principles are used:
1. ability to pay – a straightforward higher burden
on those with greater incomes.
This principle seems fair — but, it places the same
burden on what is earned, by productive
contributions to the economy, and what is merely
collected due to privilege.
2. benefits received – a charge proportional to the
particular advantages the individual (or corporation)
has received from the activities of the community, or
from the earth itself.
The benefits received principle, on the other hand,
is truly fair – it is a payment for valuable services or
advantages that have already been enjoyed.
How does Georgist economics differ from
other approaches to tax collection?
A recent study by Picture-the-Homeless and Hunter
College found that there are 3X as many vacant
apartments as needed to house every sheltered homeless
person, yet the city spends many times more on
temporary housing instead! Who benefits?
Source: Picturethehomeless.org, http://
www.coalitionforthehomeless.org/pages/basic-facts,
http://www.huffingtonpost.com/2013/03/07/new-york-
city-homeless-shelter-spending-surge-800-million-
dollars_n_2831909.html
New York Post: How NYC Does Not Tax the Super Rich -
http://nypost.com/2015/03/09/new-yorks-super-
wealthy-pay-less-on-property-taxes/

6. 6/11/15
6
What would we lose under LVT?
Answer: Record-setting 8-figure, even 9-figure, condo sales. As the rent is increased,
the price will come down, because low rent is capitalized into high prices.
Here's today's Quiz:
Assume you are a billionaire looking to buy that $100m penthouse that just sold at
One57. Now, how high would you go if the property tax was $1.73m/year instead
of just $17,268/year (in other words, the property was taxed at about the same
rate as for the $1m condo)?
A. The same $100m
B. $75m
C. $50m
D. Less than any of the above
Several factors probably play into your decision, like how long you will retain the apartment, i.e.
how long you have to pay the property tax (which will probably go up over time too).
One thing is for sure though: a $100m Condo looks a lot less attractive when the property tax is
$1.73m than when it is only $17,268. Another thing is for sure, the city would benefit
immensely from collection of a more appropriate property tax.
How much Money Are we Talking About?
Georgist economist Mason Gaffney, explains the loss
of economic rent. US Governments could scrap
their bad taxes and fund public services out of
community-created rents of $5.3 Trillion.
Another professor of economics, Nicolaus Tideman,
reports that the rent readily available through
taxation is at least $1.5 trillion, compared to about
$175 billion in rent collected today, and he
calculates that annual income of the average
American family would rise by $6,300 if the Single
Tax was adopted.
With the Land Value Tax, we could eliminate:
• Deadweight taxes on wages, sales, fixed capital, etc.
• The major cause of boom-bust cycles: Land Speculation
• Most Rent-Seeking activity
• Much of the cause of political and other corruption
• Unjust inequality based on monopoly of resources
• Urban sprawl, as land gets used more efficiently
• Blighted warehoused neighborhoods
• Enormous tax breaks for Developers who would then build to sell at more
reasonable prices
Under current NYC assessments:
We could replace the taxes on
1 Wages
2 Sales
3 Buildings
4 Commercial occupancy
5 Hotels
6 etc.!
...with a levy of 18% on land value alone
From article and videos: Cheating and the
Corporate Cannibals - http://bit.ly/YOSbRW
Do any of these taxes does actually
benefit the city's economy?
If New York could get by without
them, it would be better off, wouldn't
it?
But...

7. 6/11/15
7
A shift toward LVT
would increase the cost of holding land.
This would:
 Stimulate new construction!
 Create new jobs and new housing!
More revenue from land
means less penalty on
 Buildings, both new and renovated!
 Sales, and commerce in general!
 Wages — costs less to hire workers
The effort to provide “property tax relief” to
various constituencies has gradually created an
assessment roll that has far lower estimates of
land value than actual market prices – or rental
values.
So don't press the panic button yet!
If the land were accurately assessed, then a far
lower percentage of land value would suffice to
yield the needed revenue!
And remember, we're talking about the
“drastic” (and politically unfeasible) step of
replacing that entire list of taxes with LVT.
A more gradual shift to LVT is totally feasible, and
would greatly benefit the city's economy.
New York City currently raises over $7
billion per year in wage taxes – or nearly
$1,000 per resident.
This makes it more expensive to hire
workers in the city, and drives jobs
outside, to lower-tax areas.
Remember, if a thing can move away to
avoid being taxed, it will!

8. 6/11/15
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What’s the bottom line for me?
Even under the mess that is
our current assessment system,
A revenue-neutral shift
to a 25% lower tax on buildings,
making up the difference
with a higher tax on land value
would mean lower taxes
for most homeowners in NYC!
Guess what! It’s been tried, right here!
Here is a Lexington Avenue street fair, in front of a bunch
of those classic “pre-war” buildings that New Yorkers prize.
3. Public Banking – Banking in the Public Interest
There is currently one State Public Bank in North Dakota (The Bank of North
Dakota), and a fully owned Indian Nations Bank in Oklahoma (Bank2)
While it's true that owners of Class 1
buildings (1-3 family buildings) and condos
in Manhattan would pay more, they are only
a small fraction of homeowners in the whole
city.
The majority of Class 1 building and condo
owners in Bronx, Queens, Brooklyn and
Staten Island would gain!
And, of course, renters would gain, city-
wide.
What are we waiting for?
Ever wonder why “pre-war” buildings have such cachet –
and why there are so many of them?
After World War I, many New Yorkers suffered from lack of
housing. To solve the problem, Governor Al Smith persuaded
the state legislature to allow New York City to tax land, but
not the buildings on it — for ten years.
New construction more than tripled. Not only was there more
housing — and thus lower cost apartments — there were
more jobs and higher wages for construction workers, and
more business for merchants who sold goods to them.
Even though the law expired in 1931, New York City
continued to grow, despite having begun the period with a
higher density than other cities, and without expanding its
boundaries.
Banks create 97% of the money in the system. Are they
operating in the public good?

9. 6/11/15
9
Banks literally make money. As the Bank of
England recently put it . . .
“Banks do not act simply as intermediaries, lending
out deposits that savers place with them, and nor do
they ‘multiply up’ central bank money to create
new loans and deposits … Commercial banks create
money, in the form of bank deposits, by making new
loans.”
‘Money creation in the modern economy’,
Quarterly Bulletin, 2014 Q1, Bank of England.
Why a Bank?
Community banks
Dividends
(Interest)
& Local Needs
A typical Systemically
Important Financial
Institution (SIFI) like JP
Morgan has just a 31%
Loan to Asset ratio – less
than ½ of ND’s community
banks. SIFIs don’t make
most of their money by
making loans!
Yes, banks value collateral before making loans on it,
but leading up to the crisis, they paid appraisers to
inflate estimates of land and homes in order to make
larger loans, which they then sold to unsuspecting
investors, while netting millions in fees. Can their
evaluations of collateral be trusted when they have no
skin in the game? A Public Bank would keep all loans
on its own books, instead of securitizing them.
Which system is more risky?
Don’t forget community banks! In North Dakota,
which has the country’s only State Bank, there hasn’t
been a bank failure in over 20 years. Nationwide,
there have been over 500 bank failures just since the
year 2000 (FDIC) and with consolidation, we are down
to barely 6,000 banks, from 8,000 in 2008.
For a city-based Public Bank, substitute “City” for
“State” and add Community Banks in between City
Bank and City Projects.
Source: Center for the Study of Innovation report on
State Bank possibilities in Washington State.
Why are community banks so important?
The Public Banking Story is also a Community Bank story.
Notice how lending by North Dakota’s community banks
has pulled away from that of otherwise comparable states.
Banks with low levels of loans to asset ratios, like
JPMorgan Chase & Co., where loans are 31% of assets,
have more diversified sources of revenue, including from
investment banking, asset management, and derivatives.
Source: http://www.valueline.com/Tools/
Educational_Articles/Stocks/
Getting_To_Know_A_Bank_With_Financial_Ratios.aspx
The TBTF banks are called Systemically Important Financial
Institutions (SIFIs) by the Fed and the FSB, but “important”
to whom, and for what reasons???

10. 6/11/15
10
The Smallest Banks Make Most of the Small Business
Loans, but the Biggest Banks have Most of the Assets
3rd Axiom: Small and Close Services are Better for Communities than
Large and Distant Services.
The Biggest Banks have the Biggest
Losses by Percent and Amount
Source: Institute for Local Self-Reliance: http://
bit.ly/1LQkOAJ
It’s the largest banks that have caused the most
economic problems. Without them, there might
not have been a crisis at all!
“... counties in which community banks account for a higher
than average share of the market have endured significantly
fewer home foreclosures.” - Institute for Local Self-Reliance
from: Journal of Banking & Finance Volume 35, Issue 9,
September 2011, Pages 2498–2509
Small business creation has been halved from 1978-2011
due to deregulation and big bank market-share
consolidation, says Robert Reich, former Labor Secretary
under Bill Clinton. “In consequence, many small businesses
can't get the financing they once got from state and local
bankers. Over the past two decades, loans to small
businesses have dropped from about half to under 30
percent of total bank loans.” The Revolt of Small Business
Republicans - http://bit.ly/1TdYVjI

11. 6/11/15
11
Small Banks are Disappearing
40% of the cost of public projects goes to interest.
Rent in Public Housing
Cost of interest on capital 77%
Drinking Water
Cost of interest on
capital 38%
Garbage Collection Fees
Cost of interest on capital 12%
From Margrit Kennedy, http://www.monneta.org/upload/pdf/Pres_MK_CompC.pdf
What of public expenditures?
Other Reasons for a Public Bank
 New liquidity rules could cause bond interest rates to soar
 State and municipal bonds excluded from “high quality liquid assets.”
 Without interest, California could be $72 billion richer.
 General Obligation, Revenue, & other bonds, 2013
 $92 billion principal + $72 billion interest = $164 billion. Nearly double!
 Minimal operating costs
 No bonuses, fees, commissions
 No high-paid CEOs
 No need for buildings, branches, tellers
 No need to advertise
 Banks have unlimited low-interest credit
 Lines with the Fed: States and municipal governments have no credit line with the Fed
 States are now hit with lower credit ratings, making borrowing even more expensive
 Banks face new regulatory & compliance issues with Dodd-Frank. A State Public
Bank could help community banks comply.
 A much better lending option for the poor & unbanked. Can team up with existing
micro-lenders too (e.g. Grameen Bank, Postal Banks).
 Countercyclical lending allows sustained growth.
 Less corrupt, more efficient, more profitable.
 The Bank of North Dakota outperformed private banks and has been scandal-free since
inception (1919)
Interest & Principal owed
by California
OK, small banks are good for the community. So, how
have they been faring?
Small banks have consolidated and disappeared due to
regulations, acquisitions, and (some) economies of scale,
but mostly bankruptcies.
Source: FDIC Report -
community_banking_by_the_numbers_clean-1.pdf
And the interest on public expenses goes straight to the
biggest commercial banks who failed the economy. Why
not pay interest to a public bank which pays dividends
back to the State?
Proper risk analysis should include more than that for
the Public Bank. North Dakota has had no bank failures
in over 20 years, while there were 517 bank failures
through the end of Sept, 2013 nationwide since 2000,
says the cash-strapped FDIC, which has to pick up the
pieces.
Sources: Bank of North Dakota Outperforms Wall Street
– Ellen Brown - http://
www.counterpunch.org/2014/11/20/bank-of-north-
dakota-outperforms-wall-street/

12. 6/11/15
12
Possible Funding Sources
6) Transfer of City’s/State’s deposits and cash accounts
currently held in large commercial banking or other
institutions
7) City’s/State’s equity investment, funded through a one-
time appropriation from the General Fund or transfers
of assets from the municipality’s existing investment
pool (see next section).
A public bank could funded through a variety of sources and vehicles, including:
Source: http://www.seattlepublicbankcoalition.org/public-bank-solutions
1) Equity investments in non-voting shares sold to local governments and pension
funds
2) The issue of debt (short-term and medium-term notes) purchased using funds
under management by the City/State Treasurer
3) New Certificates of Deposit sold to the Treasurer and other “outside”
investors
4) Banker’s acceptances
5) Repo-like operations that would be conducted with the City/State
Treasurer to insure adequate provision of short-term liquidity.
…And about that funding:
4. Ending Government Financial Asset Hoarding (GFAH)
Each year, every government entity from the local fire department
to the State Pension fund, is required to produce a report of their
total assets.
This is called the Comprehensive Annual Financial Report (CAFR).
The CAFR lists all assets of the entity for all time, and differs from the
Budget, which is just a statement of liabilities and assets for the
year.
There are over 200,000 CAFRs adding up to
Trillions of dollars…maybe much more.
A gusher of money…but for whom?
What does the CAFR Include?
1. Governmental Funds
2. Propriety Funds
3. Fiduciary Funds
4. Component Units
The budget you hear about involves primarily the Governmental Funds. The other
three major categories are not included in the budget and this is in most cases where
most of the surpluses are located…Even in the items that are part of the budget
(Governmental Funds) there are surpluses they are not telling you about. Here is
how it works. A proper budget is made up of three parts:
1) Balance brought forward from previous year's revenues not spent;
2) Current projected revenues; and
3) Current projected expenditures. The budget is Items 1 and 2 minus Item 3. It is
just that simple.
However, in the governments' budget process, they forget about Item 1. Money
available and not spent in previous years is not included in the budget.”
– from CAFRMAN.COM
“The CAFR is prepared under the accounting and reporting
standards outlined by the Government Accounting Standards
Board (GASB). It is an audited report. The CAFR has four parts:
4th Axiom: If a Process can be Made Complex and Obscure in order
to Benefit the Elite, it Will Be.
I’m gong to focus on #7 in a moment, but there are
actually many possible sources for initial funding of a
public bank.
CAFR Figures based on Walter Burien’s and Clint
Richardson’s estimates.
Source: http://web.archive.org/
web/20040708041151/http://
www.cafrman.com/

13. 6/11/15
13
What are Our Assets Right Now?
Check the Comprehensive Annual Financial Reports (2014)…
 $181 billion in NY State Fiduciary Net Position (March 31, 2014, p. 44)*
 $192 billion in NY City Fiduciary Net Position (June 30, 2014, p. 52)*
What if 10% of these 2 liquid funds ($37.3B) was reallocated to a Public Bank?**
There are 10s of billions in other NY Investment funds too
OK, these assets are not quite a Money Tree, but they
are money that can be loaned into the community,
often with higher returns or at least less risk than
some Wall Street investments.
Remember: it is not under-funding that hurts pension
fund returns, it is under-performance and volatility.
* Liquid investments only. Does not include fixed capital
** By comparison, the Bank of North Dakota has $6.9B in assets (2014 FS)
Governments do have to pay their obligations for services and to
pensioners, but are Governments really broke when…
1 In almost every case, governments have more than enough in their major
investments (e.g. pension funds) to cover expenses for years, even decades, even
with 0% ROI. They often have enough just in “Rainy Day” funds to cover their entire
deficit. E.g. Public Banking Institute Founder Ellen Brown found $71b in a
Treasurer’s rainy day fund, more than enough to cover California's 2010 $26.3
billion deficit. Since when was government supposed to operate at a profit and use those
profits to pay its bills instead of taxes?!
2 New York State lost $42b from 2008 to 2009 in its pension fund, while complaining
about a $9b “budget gap.” Which is the more serious amount?
3 Multi-decade projected investment returns are based on currently underperforming
assets – e.g. bond returns in an historically low interest environment (Reuters).
4 Employee/Employer contributions are not counted as part of the fund income when
deciding whether the fund has a “shortfall.” If it was, this could reduce the
necessary ROI (often unrealistically given as high as 8%), in half.
5 It is the private fund managers who decide how to measure and present the ROI, not
the overseeing Comptrollers and Treasurers. This has been shown to distort actual
returns positively.
6 Non-current liabilities are measured years out, but only current assets are reported
against them. “The new GAAP accounting implemented over the last 8 years
established by (the) GASB requires local government accounting to project all
liability as if it is due today.” – Walter Burien, CAFR1.COM.
Clearly, the CAFRs need an independent audit, and
not by officials whose next job may be on Wall Street!
Until then, anyone with patience and a computer can download their
municipal CAFRs online and use this Review Process to learn what assets
are available: http://www.cafrman.com/ReviewProcess.htm.
REVIEW PROCESS
Introduction
The review process is very simple. It involves only two worksheets (schedules). [NOTE: Most people are not interested in the details of forms and explanations
of the forms. However, in The CAFR eBook both forms are presented in a couple of ways as well as a spreadsheet program and a word processing program for
each of school district, city, county and State.]
A computer is not needed to conduct a review or do an economic impact analysis. All that is needed is:
-A copy of the government’s Comprehensive Annual Financial Report (CAFR)
-Two forms
-A sharp pencil
-A calculator.
Steps in conducting a review and preparing the economic impact analysis
1. Get a copy of the government’s/school district’s most current Comprehensive Annual Financial Report (CAFR).
2. Go to each fund/subfund section, locate the accounts with surpluses based on the steps shown below; total them for each subfund, and write them down as
shown below. In addition the Exhibit A in each of the State reports provided in this writing. The Exhibit A is the complete review. So a person has over 40
examples to use in the learning process.
3. Total the list of subfund surpluses to arrive at the total surpluses for the government.
4. Divide the result in Step 3. by the population and you have the per capita surpluses.
5. Take the total surplus amount to the proper economic impact form and complete the computations shown for each cell in the economic impact form. The
computations are very simple.
That's it. The next step is preparing a report on the results of the review and economic impact analysis. Go to the Report Section of this writing.
These rainy day and pension funds – detailed in CAFRs – total
10s of trillions, nationwide. They could be partly invested in
Public Banks, eliminating the need to float a bond to form a
bank, adding even more debt.
The assets of pension funds swing wildly due to market
gyrations. In New York State alone, the pension fund has
gone from $156 billion (2007) to just $110 billion a year later
(2008), and then back to where it started - $153 billion, at the
end of 2011 - all while pensioners required only $4.5 - $8.9
billion, net of contributions. It’s the investments that cause
havoc, not the outlays!
Sources: http://www.osc.state.ny.us/finance/index.htm,
http://comptroller.nyc.gov/reports/comprehensive-annual-
financial-reports
Sources: Brown, Ellen: The Mysterious CAFRs: How Stagnant
Pools of Government Money Could Help Save the Economy -
http://www.huffingtonpost.com/ellen-brown/the-
mysterious-cafrs-how_b_585011.html
Long, Cate “Moody’s flawed estimate on public pension
liabilities,” Reuter’s, 06/28/13 - http://blogs.reuters.com/
muniland/2013/06/28/moodys-flawed-estimate-on-public-
pensionliabilities/
McGehan, Patrick, NY Times, Wall Street Fees Wipe Out $2.5
Billion in New York City Pension Gains - http://
www.nytimes.com/2015/04/09/nyregion/wall-street-fees-
wipe-out-2-5-billion-in-new-york-city-pension-gains.html

14. 6/11/15
14
Which Reform will you Choose to work on?
Sovereign Money? Land Value Taxation? Public Banking?
Ending Government Financial
Asset Hoarding (GFAH)?
Whichever one you choose, there
are many groups and individuals to
help guide and work with you.
Just remember…
America is Not Broke!
Thank You!
Available from Tayen Lane:
https://tayen-lane.squarespace.com/america-is-not-broke
And Amazon: http://amzn.to/1Ihcc54
America is Not Broke!
by Scott Baker
My book lists several organizations working on
all of these reforms. Join one or more!