This public finance pool not only provides a means for small businesses, and i mean very small businesses in chiaintown, from the woman selling walnuts on the street, to the operator of a small print shop that makes less than $20,000 a year. This is what I mean by small businesses. IT does not compete with the current banking structure, and simply expands the structure. By doing this, small business people, and young people may utilize loan pools to refinance their debt at significantly lower, public rates. Furthermore, people with already bad credit can refinance their debt by applying to loan pools, where community individuals could vouch for them in some way in front of a jury board. However, particularly bad applicants can be screend out as wel in the same manner. Certainly, some individual privacy is lost in this scheme, but participation is purely optional. And the private market remains open to these individuals as well.
By empowering voters with sovereignty over public econmic development decisions, it not only localizes the money spent, and gives small businesses a better chance at securing a share of grants, it can also act as a social safety net. Instead of paying high percentages for hopstial debt incurred, the public jury could make health loans for individuals that will more likely repay lowing interest loans over loger period of times to their own community, than to a distant bank in deleware. Members of the community are also trained by professional banker "judges" if you will, whose job is to explain the proper means and appropriate determinations for making a loan. Jurors ultimately have toe choose among a small group of loan applicants to disburse a pool of funds, which are administered by the jury bank.
In cash based societies, where much of business conducted does not produce receipts, it is more difficut to secure loans. A jury bank would enable people who are not otherwise participating in the officials system, to contribute a share of taxes, through the profits gained through public financne This employment of productive labor in the official system wil expand the participation of an entire new class of consumers in the credit markets, potentially expanding the markets of private institutions wh can bank with teh successful borrowers from the public institutions -- credit scores and history's for high risk individuals are expanded. People whose health insurance does not cover critical prventative care, can utilize public finance t o take care of health problems without paying default rates, but rather low interbank rates. This would save the poor, and likely the federal government hundreds of billions of dollars in finance costs paid to finance companies. This money would be utilized in business start up, and consumption, rather than buying luxury goods and investment products.
Ebay, paypal, google, will see a huge jump in revenue, as people utilize small loans of $5,000, $10,000 to start up a website and advertise a product. If they are successful, the community has a new employer, and a good loan applicant who repays the community with interest. This money expands the amount of loanable funds, or can be expended for grants and public works which provide no additional productivity to the community. A community with such a bank would enjoy a level of autonomy unseen since athenian times, but would also produce a historic loyalty among members. It wpuld build human capital, in both the applicants, the jurors themselves who hear ideas, demystifying entrepreneurship.
Mortgages could be financed for community members to own their housing rather than simply to rent it. Community members could ten afford to live in mixed income housing, and overcrowding and high rent issues would be alleviated with additional housing, as well as a short term insurance pool to tide people over who are in need of money. Since so many in the community will have participated in this scheme over time, the information will be well dispersed so that anyone who wants a loan from this jury would be able to apply.
Such pool, if successful, will naturally have rates lower than the private market, because its decisions are more efficient. However, pools which make bad decisions, will naturally have a higher interest rate than the market rate, and individuals with good credit can go to private lenders and get loans at good interest rates. Thus, there is only expansion rather than the zero sum game some like to play. Furthermore, by leveraging community development funds, a single infusion of grant money brings 10 times more funds into the community than typical economic development grants.
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