Talking about his proposal to borrow $8.75 billion ($6 billion or so to pay off overdue bills, the rest for what Democrats do best, new spending, I guess), Governor Pat Quinn said,
“Saying ‘No’ is not enough unless you are willing to offer real alternatives.”
Well, I’ve got a possibility.
Why not charter a state bank as North Dakota has?
As I understand the arrangement that the Federal Reserve has with banks is that it loans money to banks for very low interest rates.
Quinn and his budget advisers argue that paying 1% per month to vendors that cannot be paid on time is an expense that should be lowered.
He suggests doing so by floating a bond issue for the amount owed. My guess is the interest rate would be cut approximately in half.
Why not try to cut it by closer to 99%?
That’s if the Fed Funds Rate is 0.25% and Illinois can access money at that rate.
I don’t know the ins and outs of banking.
Maybe there is a fatal flaw in this idea.
Another idea would be to lower the interest rate paid to vendors on overdue bills from 1% per month to one or two percentage points above the prime rate. The prime rate is 3.75%.
That could be done by changing state law.
So, here are two ideas to chew on.
Anyone want a bite?