Public bank could help businesses get federal aid

Letter to the Editor by Beth Finn, published in the Philadelphia Inquirer on Oct. 25, 2020

In reference to “Billions in aid funds are untouched” (Oct. 20), it is sobering to learn that of all the states and municipalities in the country, only Illinois and New York’s Metropolitan Transportation Authority have taken advantage of the opportunity to get funding from the Federal Reserve. Clearly, the terms are too onerous for states and municipalities that are reeling from the pandemic. If the Fed could create money without strings to bail out private banks after the 2008 recession, certainly they have the capacity to bail out states and municipalities. Interest payments on municipal debt end up transferring more than $160 billion every year from taxpayers to wealthy investors and banks on Wall Street. The Fed should offer state and local governments long-term, zero-cost loans. Furthermore, a local public bank could be used to administer these funds in a much more equitable way than that experienced by the small business in the article because it could establish its own lending guidelines driven by service to the public good rather than profit.