Saturday, October 11, 2008

Raising Detroit's economy from the dead

Lately i've been advising people i know to pool their money together to start local banks. Today i came across this blog where the term was aptly coined 'locabucks'. You don't have to read the blog as it really has no pertinence here. The writer was reposting an article about how some European countries were able to work through the Great Depression (don't tell me that fleeting thoughts of tent cities sprouting up in Campus Martius hasn't crossed your mind) by creating their very own currency.

So all my sage advice may have been barking up a wrong tree with all of the local credit unions we have around here, but here's the difference. Local banks would solely be invested in the community they belong to. But don't get too excited, there is one more element that would be required to make this work and to breathe life into our communities. The local bank would have to set a deal with the City to guarantee a portion of property taxes.

I've been told that this idea would be similar to a TIFF (Tax Increment Finance Fund). I'm not an economist, so i'll take their word for it. In my mind, the bank would set a geographic area and be guaranteed a precentage of property taxes to loan money against. For example, the Palmer Park Bank would set itself up as a not-for-profit bank and would lend low interest loans to the residents of Palmer Park. The residents would use that money for home improvement repairs, education expenses or even be applied to developers that would seek to build concientious developments under the strict supervision of the local Community Development Corporation.

Feel free to nail me to the stake for this proposal, but i welcome any thoughtful insight you may have to see if this thing has legs.


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