AOC and Rashida Tlaib propose creating public banks

[Jarhyn]

I was addressing what was proposed in this thread and that's a lot more than savings. A simple savings system probably wouldn't actually be economic (the postal service would end up eating some of the costs) but probably worthwhile.

You are making a grievous mistake: loans will still be profitable. They just won't be AS profitable. And they don't need to be anywhere near as profitable because "the owners" don't need to turn a profit: there is no parasitism off the top.

Once again, the usual infinite pool of profits that can be used to fund whatever you deem worthy. Note, also, that no profits means no growth--they can't keep up with the economy unless you continue to add money.

You assume right off the bat that offering loans to poor people will cause the bank to not generate enough revenue to pay the postal workers, despite that the post office itself without any interest bearing products already makes enough money to pay it's workers.

And here you go into loony land. In 2019 the postal service lost $18,747 per employee.

If you go with the payments that republicans forced them to make to prepay their pensions account for nearly half a century.

I'm not going to count that ridiculousness against them.

 

[Harry Bosch]

Yes, that's my point. Funded and self-sustaining are opposites.

And the wiki link you provided provides the answer to your "Is it?" question.

Decades later, Vermont Sen. Bernie Sanders' 2016 presidential campaign platform included plans for postal banking.[22] In 2018, Massachusetts Sen. Elizabeth Warren and New York Sen. Kirsten Gillibrand supported such a program.[23] ...

It only provides that answer if when you said "people" you meant "Sanders, Warren and Gillibrand". Bringing back postal banking is a no-brainer since it wasn't a burden on the taxpayers. But this is lpetrich's thread and it's about the Ocasio-Cortez/Tlaib proposal, not the Sanders/Warren/Gillibrand proposal.

"EXCLUSIVE: @RashidaTlaib and @AOC are proposing a new bill that would foster the creation of public banks across the country — with the aim of encouraging investments in public resources such as affordable housing and renewable energy projects. ...
...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.
... public banks, which theoretically would be more motivated to do public good and invest in their communities than private institutions, which are out for profit. ...
... establishing the Public Bank Grant program administered by the Secretary of the Treasury and the Federal Reserve Board which would provide grants...
... fund public infrastructure projects...
...the passage of The Public Banking Act would provide a much-needed financial lifeline to states and municipalities...

She said that she also believes public banks could facilitate the use of public resources to construct “a myriad of public goods,” ... “Public banks empower states and municipalities to establish new channels of public investment to help solve systemic crises.”
... They could also facilitate easier access to funds for state and local governments from the federal government or Federal Reserve.
... or FedAccounts, where everyone gets an account with the Federal Reserve through which they could receive direct payments from the government, for example, during an economic crisis.

"California just legalized public banking, setting the stage for more affordable housing " - "Supporters say the change allows for funding infrastructure demands or providing loans to public agencies at low rates"

So lpetrich, Ocasio-Cortez and Tlaib are clearly not thinking of a self-sustaining system. What they're advocating will plainly be at ongoing taxpayer expense. That's also what Jarhyn is evidently thinking of:

... Fifth, it means that the public is finally capable of engineering loans and interest that actually make sense based on needs rather than "risk", the latter being a concept that is really justification for charging more of those with the ability to pay less. ...

But I take your point -- some people are thinking of more expensive systems than others. It's a mixed bag. Sanders' and Gillibrand's moderate proposals should satisfy Jimmy Higgins' concerns, for instance.

You are making a grievous mistake: loans will still be profitable. They just won't be AS profitable. And they don't need to be anywhere near as profitable because "the owners" don't need to turn a profit: there is no parasitism off the top.

You assume right off the bat that offering loans to poor people will cause the bank to not generate enough revenue to pay the postal workers, despite that the post office itself without any interest bearing products already makes enough money to pay it's workers.

Banks arn't making much profit today lending to strong companies and people with good credit. How will the post office mail delivery people make money from lending to people with poor credit and a low rate?

 

[Jarhyn]

Yes, that's my point. Funded and self-sustaining are opposites.

And the wiki link you provided provides the answer to your "Is it?" question.

It only provides that answer if when you said "people" you meant "Sanders, Warren and Gillibrand". Bringing back postal banking is a no-brainer since it wasn't a burden on the taxpayers. But this is lpetrich's thread and it's about the Ocasio-Cortez/Tlaib proposal, not the Sanders/Warren/Gillibrand proposal.

"EXCLUSIVE: @RashidaTlaib and @AOC are proposing a new bill that would foster the creation of public banks across the country — with the aim of encouraging investments in public resources such as affordable housing and renewable energy projects. ...
...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.
... public banks, which theoretically would be more motivated to do public good and invest in their communities than private institutions, which are out for profit. ...
... establishing the Public Bank Grant program administered by the Secretary of the Treasury and the Federal Reserve Board which would provide grants...
... fund public infrastructure projects...
...the passage of The Public Banking Act would provide a much-needed financial lifeline to states and municipalities...

She said that she also believes public banks could facilitate the use of public resources to construct “a myriad of public goods,” ... “Public banks empower states and municipalities to establish new channels of public investment to help solve systemic crises.”
... They could also facilitate easier access to funds for state and local governments from the federal government or Federal Reserve.
... or FedAccounts, where everyone gets an account with the Federal Reserve through which they could receive direct payments from the government, for example, during an economic crisis.

"California just legalized public banking, setting the stage for more affordable housing " - "Supporters say the change allows for funding infrastructure demands or providing loans to public agencies at low rates"

So lpetrich, Ocasio-Cortez and Tlaib are clearly not thinking of a self-sustaining system. What they're advocating will plainly be at ongoing taxpayer expense. That's also what Jarhyn is evidently thinking of:

... Fifth, it means that the public is finally capable of engineering loans and interest that actually make sense based on needs rather than "risk", the latter being a concept that is really justification for charging more of those with the ability to pay less. ...

But I take your point -- some people are thinking of more expensive systems than others. It's a mixed bag. Sanders' and Gillibrand's moderate proposals should satisfy Jimmy Higgins' concerns, for instance.

You are making a grievous mistake: loans will still be profitable. They just won't be AS profitable. And they don't need to be anywhere near as profitable because "the owners" don't need to turn a profit: there is no parasitism off the top.

You assume right off the bat that offering loans to poor people will cause the bank to not generate enough revenue to pay the postal workers, despite that the post office itself without any interest bearing products already makes enough money to pay it's workers.

Banks arn't making much profit today lending to strong companies and people with good credit. How will the post office mail delivery people make money from lending to people with poor credit and a low rate?

Realize what your post implies. If banks have to make money through predating on the poor via high interest junk debt, then that's another mark of why they should fail.

But you can't really say that, can you? Banks make plenty of their money through mortgage accounts and business loans.

 

[Harry Bosch]

Yes, that's my point. Funded and self-sustaining are opposites.



It only provides that answer if when you said "people" you meant "Sanders, Warren and Gillibrand". Bringing back postal banking is a no-brainer since it wasn't a burden on the taxpayers. But this is lpetrich's thread and it's about the Ocasio-Cortez/Tlaib proposal, not the Sanders/Warren/Gillibrand proposal.

"EXCLUSIVE: @RashidaTlaib and @AOC are proposing a new bill that would foster the creation of public banks across the country — with the aim of encouraging investments in public resources such as affordable housing and renewable energy projects. ...
...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.
... public banks, which theoretically would be more motivated to do public good and invest in their communities than private institutions, which are out for profit. ...
... establishing the Public Bank Grant program administered by the Secretary of the Treasury and the Federal Reserve Board which would provide grants...
... fund public infrastructure projects...
...the passage of The Public Banking Act would provide a much-needed financial lifeline to states and municipalities...

She said that she also believes public banks could facilitate the use of public resources to construct “a myriad of public goods,” ... “Public banks empower states and municipalities to establish new channels of public investment to help solve systemic crises.”
... They could also facilitate easier access to funds for state and local governments from the federal government or Federal Reserve.
... or FedAccounts, where everyone gets an account with the Federal Reserve through which they could receive direct payments from the government, for example, during an economic crisis.

"California just legalized public banking, setting the stage for more affordable housing " - "Supporters say the change allows for funding infrastructure demands or providing loans to public agencies at low rates"

So lpetrich, Ocasio-Cortez and Tlaib are clearly not thinking of a self-sustaining system. What they're advocating will plainly be at ongoing taxpayer expense. That's also what Jarhyn is evidently thinking of:

... Fifth, it means that the public is finally capable of engineering loans and interest that actually make sense based on needs rather than "risk", the latter being a concept that is really justification for charging more of those with the ability to pay less. ...

But I take your point -- some people are thinking of more expensive systems than others. It's a mixed bag. Sanders' and Gillibrand's moderate proposals should satisfy Jimmy Higgins' concerns, for instance.

You are making a grievous mistake: loans will still be profitable. They just won't be AS profitable. And they don't need to be anywhere near as profitable because "the owners" don't need to turn a profit: there is no parasitism off the top.

You assume right off the bat that offering loans to poor people will cause the bank to not generate enough revenue to pay the postal workers, despite that the post office itself without any interest bearing products already makes enough money to pay it's workers.

Banks arn't making much profit today lending to strong companies and people with good credit. How will the post office mail delivery people make money from lending to people with poor credit and a low rate?

Realize what your post implies. If banks have to make money through predating on the poor via high interest junk debt, then that's another mark of why they should fail.

But you can't really say that, can you? Banks make plenty of their money through mortgage accounts and business loans.

Do you have a link showing that banks are making "high interest junk debt" to the poor? Banks are not doing very well. Check out their earnings right now. They are not doing well. I'll answer my first question to you: banks are not doing the high risk to loans to people with poor credit. That's being done by non bank entities. Banks today are desperate for profit. Do you honestly think that they would not be in this market if there was profit to be had? Lending to high risk individuals at a lower interest rate will lose money. If you're comfortable with that, great. But let's not go to fantasy land here.

 

[Loren Pechtel]

Realize what your post implies. If banks have to make money through predating on the poor via high interest junk debt, then that's another mark of why they should fail.

But you can't really say that, can you? Banks make plenty of their money through mortgage accounts and business loans.

It's not like the postal bank will magically have lower default rates and thus be able to charge lower interest.

 

[Loren Pechtel]

Do you have a link showing that banks are making "high interest junk debt" to the poor? Banks are not doing very well. Check out their earnings right now. They are not doing well. I'll answer my first question to you: banks are not doing the high risk to loans to people with poor credit. That's being done by non bank entities. Banks today are desperate for profit. Do you honestly think that they would not be in this market if there was profit to be had? Lending to high risk individuals at a lower interest rate will lose money. If you're comfortable with that, great. But let's not go to fantasy land here.

You fund it out of that infinite pool of profit that exists for any worthwhile leftist undertaking! Pay no attention to the fact that it's mythical.

 

[Bomb#20]

And here you go into loony land. In 2019 the postal service lost $18,747 per employee.

If you go with the payments that republicans forced them to make to prepay their pensions account for nearly half a century.

It wasn't "republicans"; it was "Congress". It was a bipartisan bill. It passed unanimously in the Senate, and by voice vote in the House, meaning there weren't enough opponents to bother counting.

I'm not going to count that ridiculousness against them.

Right not to count it against them; but it wasn't ridiculous. The arrangement to prepay their pensions was actually proposed by the USPS itself, which is presumably why there wasn't a fight over it in Congress. A bunch of USPS accountants calculated that their plan was the best way to manage the finances, and Congress rubber-stamped it. It might even have worked if the Great Recession hadn't intervened.

 

[laughing dog]

It wasn't "republicans"; it was "Congress". It was a bipartisan bill. It passed unanimously in the Senate, and by voice vote in the House, meaning there weren't enough opponents to bother counting.

It was a Republican-led Congress.

Right not to count it against them; but it wasn't ridiculous. The arrangement to prepay their pensions was actually proposed by the USPS itself, which is presumably why there wasn't a fight over it in Congress. A bunch of USPS accountants calculated that their plan was the best way to manage the finances, and Congress rubber-stamped it. It might even have worked if the Great Recession hadn't intervened.

Do you have a source for that, because the plan was financially ridiculous: prepay expected pension costs over the next 75 years oveer a 10 year period.

 

[Jarhyn]

It wasn't "republicans"; it was "Congress". It was a bipartisan bill. It passed unanimously in the Senate, and by voice vote in the House, meaning there weren't enough opponents to bother counting.

It was a Republican-led Congress.

Right not to count it against them; but it wasn't ridiculous. The arrangement to prepay their pensions was actually proposed by the USPS itself, which is presumably why there wasn't a fight over it in Congress. A bunch of USPS accountants calculated that their plan was the best way to manage the finances, and Congress rubber-stamped it. It might even have worked if the Great Recession hadn't intervened.

Do you have a source for that, because the plan was financially ridiculous: prepay expected pension costs over the next 75 years oveer a 10 year period.

Also, I'm interested now to see what else was in that piece of legislation that created this outcome. What bill was it perse? I can't see Dems in either chamber voting for this unless it was attached as pork to something else (or leveraged into funding packages for the USPS at large).

That said, republicans have no monopoly on being shitty and selling our country out.

 

[Worldtraveller]

It was a Republican-led Congress.

Do you have a source for that, because the plan was financially ridiculous: prepay expected pension costs over the next 75 years oveer a 10 year period.

Also, I'm interested now to see what else was in that piece of legislation that created this outcome. What bill was it perse? I can't see Dems in either chamber voting for this unless it was attached as pork to something else (or leveraged into funding packages for the USPS at large).

That said, republicans have no monopoly on being shitty and selling our country out.

On the USPS thing, here's what politifact has to say. It's a mixed bag, like most internet BS. It's not as cut and dry as anyone seems to make it out to be.

 

[Jarhyn]

It was a Republican-led Congress.

Do you have a source for that, because the plan was financially ridiculous: prepay expected pension costs over the next 75 years oveer a 10 year period.

Also, I'm interested now to see what else was in that piece of legislation that created this outcome. What bill was it perse? I can't see Dems in either chamber voting for this unless it was attached as pork to something else (or leveraged into funding packages for the USPS at large).

That said, republicans have no monopoly on being shitty and selling our country out.

On the USPS thing, here's what politifact has to say. It's a mixed bag, like most internet BS. It's not as cut and dry as anyone seems to make it out to be.

So, they exchanged one onerous pension requirement for another also-burdensome one. It seems that the prefunding portion was a balance against the rest of it to keep the post office burdened, and perhaps increase the burden. It now makes sense how they could get unanimity in the Senate: the bill was a half step forward and then a half step back, making something that did nothing that everyone could nonetheless brag about: "I hurt the post office" is just as true as "I helped the post office", and both sides look like heroes to their base... Until the consequences years later that everyone acknowledges are ridiculous (except Bomb, who expertly avoided making any value judgements while also expertly avoiding including any of this valuable context).

 

[Worldtraveller]

On the USPS thing, here's what politifact has to say. It's a mixed bag, like most internet BS. It's not as cut and dry as anyone seems to make it out to be.

So, they exchanged one onerous pension requirement for another also-burdensome one. It seems that the prefunding portion was a balance against the rest of it to keep the post office burdened, and perhaps increase the burden. It now makes sense how they could get unanimity in the Senate: the bill was a half step forward and then a half step back, making something that did nothing that everyone could nonetheless brag about: "I hurt the post office" is just as true as "I helped the post office", and both sides look like heroes to their base... Until the consequences years later that everyone acknowledges are ridiculous (except Bomb, who expertly avoided making any value judgements while also expertly avoiding including any of this valuable context).

Pretty much, and I'm going to still say that this is 99.99% the GOP's fault, and their intent is to make the USPS fail. Like the ACA, the gop tries to completely gut it and go with something even more horrible than what we had, then they offer these half measures so the dems take them, so at least something gets done. The gop then does it's level best to fuck it up continuously, all while blaming the dems for the system that is mostly a gop clusterfuck, for not working.

It's their MO. Has been since at least Ronnie Raygun.

 

[Loren Pechtel]

I was addressing what was proposed in this thread and that's a lot more than savings. A simple savings system probably wouldn't actually be economic (the postal service would end up eating some of the costs) but probably worthwhile.



Once again, the usual infinite pool of profits that can be used to fund whatever you deem worthy. Note, also, that no profits means no growth--they can't keep up with the economy unless you continue to add money.



And here you go into loony land. In 2019 the postal service lost $18,747 per employee.

If you go with the payments that republicans forced them to make to prepay their pensions account for nearly half a century.

I'm not going to count that ridiculousness against them.

From the fact check later in the thread:

The healthcare (not pension) payments are only about 75% of the losses. Remove them and they would still be bleeding, just not as badly.

 

[Bomb#20]

It wasn't "republicans"; it was "Congress". It was a bipartisan bill. It passed unanimously in the Senate, and by voice vote in the House, meaning there weren't enough opponents to bother counting.

It was a Republican-led Congress.

Right not to count it against them; but it wasn't ridiculous. The arrangement to prepay their pensions was actually proposed by the USPS itself, which is presumably why there wasn't a fight over it in Congress. A bunch of USPS accountants calculated that their plan was the best way to manage the finances, and Congress rubber-stamped it. It might even have worked if the Great Recession hadn't intervened.

Do you have a source for that,

Sure.

https://taxfoundation.org/postal-service-reform-postal-service-retiree-health-benefits-fund/

Also, here's the law itself and the Congressional record of its passage:

https://www.congress.gov/bill/109th-congress/house-bill/6407/actions

(By the way, this whole issue is about unfunded health insurance commitments, not unfunded pension commitments.)

because the plan was financially ridiculous: prepay expected pension costs over the next 75 years oveer a 10 year period.

But that's not what the law required; that's a popular misunderstanding that people with an axe to grind have been repeating without fact-checking. The act gave the USPS fifty years to cover their unfunded contractual obligations. The ten year time frame refers to the payment schedule being front-loaded -- the USPS was supposed to pay at a higher rate for the first ten years than for the last forty. The ten years of extra payments were because the USPS had savings somewhere else so it was agreed to apply those savings to pay down their unfunded health-care liability.

 

[Bomb#20]

It was a Republican-led Congress.

Do you have a source for that, because the plan was financially ridiculous: prepay expected pension costs over the next 75 years oveer a 10 year period.

Also, I'm interested now to see what else was in that piece of legislation that created this outcome. What bill was it perse?

See the link in post #54. It was a standalone.

I can't see Dems in either chamber voting for this unless it was attached as pork to something else (or leveraged into funding packages for the USPS at large).

That said, republicans have no monopoly on ... selling our country out.

So, they exchanged one onerous pension requirement for another also-burdensome one. It seems that the prefunding portion was a balance against the rest of it to keep the post office burdened, and perhaps increase the burden. It now makes sense how they could get unanimity in the Senate: the bill was a half step forward and then a half step back, making something that did nothing that everyone could nonetheless brag about: "I hurt the post office" is just as true as "I helped the post office", and both sides look like heroes to their base... Until the consequences years later that everyone acknowledges are ridiculous (except Bomb, who expertly avoided making any value judgements while also expertly avoiding including any of this valuable context).

Pretty much, and I'm going to still say that this is 99.99% the GOP's fault, and their intent is to make the USPS fail. Like the ACA, the gop tries to completely gut it and go with something even more horrible than what we had, then they offer these half measures so the dems take them, so at least something gets done. The gop then does it's level best to <expletives deleted>

It's their MO. Has been since at least Ronnie Raygun.

Good lord you guys think tribally. Imagining your outgroup as moustache-twirling cartoon villains is a proven effective method for acquiring an enjoyable feeling of moral superiority, but it tends to be ineffective for acquiring a realistic picture of reality.

Has it occurred to you guys that balancing public service budgets is a hard technical problem, plagued by conflicting political constraints, and that one easy way out that's been adopted over and over is to "kick the can down the road" -- to make a devil's bargain to increase long-term future costs in return for reducing immediate costs? If you can get the employees to agree to a smaller pay raise this year by promising them a more generous benefit in twenty years you can make payroll this year, and when it comes time to pay the piper that will be your successor's problem. The USPS, like so many other government and corporate bodies, played that game for decades. The underlying cause of its financial unsustainability was not the details of the payment plan it worked out in 2006 but the $75 billion contractual liability it'd already run up. When you run up a debt like that, paying it down as soon as you are able to is a more prudent strategy for avoiding default than making the bare minimum payments and leaving the future to take care of itself. Congress and the USPS ran the numbers, projected them forward, and thought if they didn't adopt this plan they'd have an even bigger problem in the future. The USPS's short term situation looked solid enough that both parties thought it could afford to shrink the liability and they'd be fools not to take the opportunity while they had it. Normally we condemn politicians for spinelessly kicking the can down the road over and over; now you guys are condemning them for having the cojones not to do that.

Well, fine. Knowing what we know now, they probably should have kicked the can down the road yet again. But in 2006 they didn't know there was going to be an economic meltdown in 2007. The real fault lies in Congress not reversing the policy once they found out the USPS couldn't afford the paydown after all. Everyone in power from 2007 to 2012 bears responsibility for that. (After 2012 it doesn't really matter any more because that's when the USPS gave up, and stopped making the legally required payments.)

 

[laughing dog]

It was a Republican-led Congress.


Do you have a source for that,

Sure.

https://taxfoundation.org/postal-service-reform-postal-service-retiree-health-benefits-fund/

Also, here's the law itself and the Congressional record of its passage:

https://www.congress.gov/bill/109th-congress/house-bill/6407/actions

(By the way, this whole issue is about unfunded health insurance commitments, not unfunded pension commitments.)

because the plan was financially ridiculous: prepay expected pension costs over the next 75 years oveer a 10 year period.

But that's not what the law required; that's a popular misunderstanding that people with an axe to grind have been repeating without fact-checking. The act gave the USPS fifty years to cover their unfunded contractual obligations. The ten year time frame refers to the payment schedule being front-loaded -- the USPS was supposed to pay at a higher rate for the first ten years than for the last forty. The ten years of extra payments were because the USPS had savings somewhere else so it was agreed to apply those savings to pay down their unfunded health-care liability.

Thank you for first link - it is very informative. According to that link, the USPS did come up with a plan but
Although the Service is now sharply critical of the fund, the opposite was once the case. In fact, the creation of a “Postal Service Retiree Health Benefit Fund” was originally the

Service’s idea, contained in a proposal it submitted to Congress in 2003.[13] The Service claimed its proposed fund, which would have been a much more limited fund than the one Congress established three years later, addressed the concerns of Congress, the GAO, and the widely respected bipartisan President’s Commission on the United States Postal Service about its large and growing retiree health care liability.[14] The Service observed that its proposal, as a sweetener for Congress, was structured to avoid increasing the federal deficit.

So Congress increased the fund which was not USPS's accountants idea.

And

Congress and the Administration told the Postal Service to eliminate within a decade 80 or 85 percent of an unfunded liability that had built up over several decades of pay-as-you-go financing, with the remainder to be eliminated more gradually over a longer time frame.

which was ridiculous.

It is true that almost every defined benefit plan (public and private) ran into trouble during that time period. It is also true that these problems were known for a very long time but that no one really acted to deal with them. In all underfunded pension funds problems, the low cost solution to dealing with them is to act early (i.e. not kick the can down the road) - something that Congress failed to do with USPS and with Social Security.

 

[Bomb#20]

... So lpetrich, Ocasio-Cortez and Tlaib are clearly not thinking of a self-sustaining system. What they're advocating will plainly be at ongoing taxpayer expense. That's also what Jarhyn is evidently thinking of:

... Fifth, it means that the public is finally capable of engineering loans and interest that actually make sense based on needs rather than "risk", the latter being a concept that is really justification for charging more of those with the ability to pay less. ...

...

You are making a grievous mistake: loans will still be profitable. They just won't be AS profitable. And they don't need to be anywhere near as profitable because "the owners" don't need to turn a profit: there is no parasitism off the top.

In the first place, we've been through this before. The difference between you and antisemites is that antisemites believe for no reason that their outgroup are parasites, whereas you, in contrast, believe for no reason that your outgroup are parasites. Outgroups are like children: it's different when they're yours. Post all the hate speech you please, but it doesn't qualify as a substantive argument.

And in the second place, no, the loans in question will not still be profitable. If they would be then lpetrich et al. would not have any need to create a new alternative to Bank of America. As noted upthread, there are already plenty of financial institutions whose "the owners" don't need to turn the profit you irrationally label "parasitism", that are perfectly able and willing to make profitable loans: credit unions. The reason AOC and RT are pushing "the Public Bank Grant program administered by the Secretary of the Treasury and the Federal Reserve Board which would provide grants" is precisely because the loans they want made are not the sort of loans credit unions make. Credit unions are not in the grant business. Credit unions care whether their loans are repaid.

You assume right off the bat that offering loans to poor people will cause the bank to not generate enough revenue to pay the postal workers,

I do not automatically assume whatever stupid notion you make up and impute to me. You want to argue with yourself, don't reply to my posts and pretend you're arguing with me. "Offering loans to poor people" is not a synonym for "Offering loans based on needs rather than risk". Plenty of poor people are good credit risks. The Grameen Bank bases its whole business model on that fact.

despite that the post office itself without any interest bearing products already makes enough money to pay it's workers.

Um, by delivering mail. If the post office branches out to additional lines of business, it will have to pay its workers for the time they spend on those additional lines of business; it can't just assign them unpaid overtime. So if the post office offers interest-bearing products then those products will need to have a default rate lower than the interest rate, or else those products will be subsidized by the taxpayers or subsidized by the income from delivering mail. (And it will be the taxpayers, because the USPS is already having enough difficulty keeping mail delivery paying just for itself. It's already canceling overtime to avoid paying time-and-a-half.)

Engineering loans and interest based on needs rather than risk means you don't mind loans not being repaid because you intended all along to run your operation at a loss.

 

[RVonse]

Public banking offers a few very attractive and beneficial elements.

First, public banking means absolute insurance on deposits.

Second, it means the leverage of newer fiscal technologies. It means that the state can finally mandate updated payment systems.

Third, it means that banking deserts go away.

Fourth, it means that having a bank account is a right. The equal protection clause means that everyone is equally entitled to a bank account if the state offers bank accounts.

Fifth, it means that the public is finally capable of engineering loans and interest that actually make sense based on needs rather than "risk", the latter being a concept that is really justification for charging more of those with the ability to pay less.

Public banking is also not anything remotely like "government banks" as they exist today, so fuck off with that noise

#1 is a non-issue, few people have enough in a bank for the current insurance limits to matter.

The rest are going to cause the banks to need huge government subsidies. This is a hidden welfare program and as such I consider automatically bad. (I am not opposed to welfare per se, but I am categorically opposed to hidden welfare programs. One agency, decide how much money to give them and how to allocate it. That's it.)

I'd say if banks will fail without subsidy because the public banking is that good that private banks lose customers, FUCK THEM. Let them crash, and burn, and die.

The banks are like broadband in the US: built on obsolete technologies, and hold a geographic monopoly that cannot be challenged effectively. Their customer service is diesigned to be inaccessible (closed any time you aren't stuck at work anyway).

The minute public banking is available, I will be heading that way. Anyone with half a mind would. And then "investment banking" (leveraging money using other people's money and paying them pennies on the dollar) goes the way it should have a while ago.

I don't agree with you often Jarhyn but this time I'm with you all the way.

 

[RVonse]

If you can do it without public funding, fine. Your proposal will require vast public funding, though.

(Note that if it could be done without a subsidy it would have happened already--someone would have already exploited the market.)

Private banks (too big to fail) have also needed huge public funding in the past and are likely to need it in the future. Whats the difference?

 

[RVonse]

Wait... is your argument, "fuck the poor inner city people"?

Why don't you try actually reading what I wrote? I am not opposed to welfare, I am opposed to Enron accounting. If it's welfare put it on the books as welfare. Make one program so you don't have a huge duplication of effort in deciding who qualifies.

I don't remember the 2008 banking bailout being called welfare....even though it really was.