Why the Fed Needs Public Banks

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      Private banks are not following through on the Fed’s attempted money injections, but publicly-owned banks would. In countries with strong government-owned banking systems, public banks have historically increased their lending when private banks pulled back. Public banks have a mandate to stimulate their local economies; and unlike private banks, they can do it and still turn a profit, because they have lower costs. They have eliminated the parasitic profit-extracting middlemen, and they do not have to focus on short-term profits to please their shareholders. They can pour their resources into improving the long-term prospects of the economy and its infrastructure, stimulating local productivity and strengthening the tax base.

      Three promising new bills are before Congress that would facilitate the establishment of a public banking system in the US.

      HR 8721, ”The Public Banking Act”, was introduced on Oct. 30, 2020. As described on Vox, the Act would “foster the creation of public [state and local government-owned] banks across the country by providing them a pathway to getting started, establishing an infrastructure for liquidity and credit facilities for them via the Federal Reserve, and setting up federal guidelines for them to be regulated. Essentially, it would make it easier for public banks to exist, and it would give some of them grant money to get started.”

      In September, Sens. Bernie Sanders and Kirsten Gillibrand also introduced The Postal Banking Act, which they said would
      —Create $9 billion in revenue for the postal service, saving it from privatization;
      —Protect low-income or rural families and communities from predatory lending; and
      —Reestablish postal banking to provide basic, low-cost financial services to those who cannot access banks

      Jesus: Hey, Dad? God: Yes, Son? Jesus: Western civilization followed me home. Can I keep it? God: Certainly not! And put it down this minute--you don't know where it's been! Tom Robbins in Another Roadside Attraction

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