Commonomics USA - Cities, counties, and states can build a firewall against the incoming administration’s threats, and create long-term fiscal stability in the chaotic years ahead, by opening public banks. By lending at low interest and paying that interest directly back to treasuries, public banks provide governments with both a source of financing and a regular source of revenue. A city-owned public bank could turn a profit for the city in its first year by using the bank to fund its infrastructure with public credit. Not only would the city avoid the costs of the municipal bond market and the risks of Wall Street losing its savings in a bad debt swap or other chicanery, but investment could target the services, economic sectors, or infrastructure upgrades the city needs most.
Even if public banks didn’t offset losses of federal funding
dollar-for-dollar, they would help sanctuary cities build additional
value-generating and budget-saving projects resulting in long-term
immunity from federal fiscal blackmail.