US News Cites Public Banking as Potent Economic Problem Solver


Contact: Marc Armstrong

The latest edition of US News & World Report calls America's only public bank a "bright star in the dark night of America's Great Recession," that might hold the key to economic recovery of American cities and states. The article Can Public Banking Finance the New Economy? suggests the answer is "yes."

Increasingly, Americans seem to agree. Since 2010, efforts to establish public banks have been initiated in legislatures in 20 states with municipalities and counties now showing interest in the idea as well.

US News & World Report lists several reasons for this growing public banking momentum:

- Providing affordable credit for local businesses. Jobs and local businesses have been starved of credit by big banks in recent years.

- Lower risks for invested public funds. Large private banks have speculated disastrously with their clients' public funds, causing significant losses for communities across the country.

- Public banks can leverage public funds more powerfully in the public interest. Owning a bank enables a community to stimulate local investment and lower government expenses through targeted program loans and lower costs of borrowing.

- Public banks can generate new non-tax revenues for community treasuries.

States and municipalities are also looking at how public banks can provide the foreclosure relief Washington has not, and how affordable credit and banking services can be provided to the small and micro businesses and unbanked consumers that Wall Street has abandoned.

A public bank gives both local communities and states new tools to solve financial problems caused by systematic failures within the national and world economies.

"Public banking is the keystone to constructing the post-Fed, post-Wall Street banking system" says Marc Armstrong, Public Banking Institute Executive Director. "Everybody knows we need an alternative to the private banking monopoly that has done so much damage to so many American families. Now we are beginning to realize the solution has been right in front of us for years."

As the US News report indicates, the growing popular movement toward public banking faces significant opposition from the big banking lobby which fears losing control of trillions of dollars in publicly generated funds. "Public banking in the US is on its way, but it's going to take strong local support to make it happen," concludes Armstrong.

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