In 2020, the nonprofit organization Action Center on Race & the Economy published a study showing that state and local governments pay $160 billion in annual interest on the money they borrow.
Banks owned by cities, counties, regional authorities, or states—better known as public banks—would enable local governments to recapture that money by borrowing from themselves. By depositing tax revenues into their own bank, their interest payments become not just an expense, but a source of income.
Since each dollar of capital also supports more than a dollar’s worth of loans, putting public money into public banks will leverage those resources to support additional investments.
This means that public banking could be a powerful tool for supporting affordable housing and community economic development. Getting there, however, is far from easy.
THE NORTH DAKOTA BANK EXAMPLE (to be continued)
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