Sometimes you walk into a dark room and a sense of anxiety overcomes you. You dread tripping over or bumping into something you cannot see. What else lurks under the cover of darkness? Then, suddenly you realize the obvious. There’s a light switch right at your fingertips … you merely need to turn it on.

That is how I view the Sovereign State Solution to our current physical economic collapse. Even if prosperity is indeed just around the corner, green shoots are in full bloom, and the elevated DOW is proof positive of an economy on the mend, there’s still simply no denying that unemployment continues to rise, that Federal debt is out of control and that 49 of 50 States are in a state of budgetary panic.

If all 50 States (and the District of Columbia) were to follow the model of the 1 State currently enjoying a budget SURPLUS this fiscal year, the spectre of rising unemployment could be defeated.

Truly, our unemployment problem is our biggest challenge, as it creates a cascading effect of default, which in turn fuels foreclosures, real estate depreciation, security backed asset devaluations, default insurance payouts, declining tax revenues and a virtual whirlwind effect of self-perpetuating collapse.

Federal stimulus money has to trickle down to the States, with headlines every day reporting that it is doing so too slowly, and inefficiently, to reach it’s intended target of job creation. When it does arrive, conditions on how it may be used limit creativity.

In the model of U.S. economic recovery that actually works, States charter Sovereign Banks as issuers of much needed, but vastly constricted CREDIT to fund their infrastructure projects and social services, and the jobs that come with them, at the discretion of the States (who best know what infrastructure is in need of repair and what services are in need of restoring or increasing). State banks then partner with private banks, as the Bank of North Dakota does, to originate or help buy down private sector loans, helping their local and regional banks to remain competitive.

In that economic recovery model, funds are more quickly and more efficiently dispersed–by many banks instead of one. The Federal “bottleneck” disappears. Jobs are created, services are restored, and the productive machinery of American economic enterprise is jump-started.

Greedy, reckless too-big-to-Failures like Bank of America who are capitalizing in anticipation of the next bust can keep their precious capital – the States won’t need it, and the mega-banks can keep on doing what they do best – paying their foreign debts on their lost bets. Their U.S. corporate customers will refinance outstanding loans with State bank co-opted loans featuring more favorable terms. And then the JP Morgan’s and Goldman Sach’s can go on playing international Russian roulette with their collective economies, instead of ours.

In that model, the Failures will fail and no-one will care. After all – who will they present a systemic risk to? Certainly not the United States. Protectionism? Well, when your Federal government fails to protect you, or your State, it certainly makes sense to have the common sense to protect yourself.

The light switch is right there at your fingertips America. We just need to turn it on!

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