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Thursday, April 26, 2018
Bank Think — Postal banking is back on the table. Here's why that matters
Between 1911 and 1967, the U.S. Postal Service offered savings accounts, but a drop in deposits led to their discontinuation. Kevin Wack - American Banker
That's because, according to Wiki:
The system originally had a natural advantage over deposit-taking private banks because the deposits were always backed by "the full faith and credit of the United States Government." However, because the Federal Deposit Insurance Corporation gave the same guarantee to depositors in private banks, the Postal Savings System lost its natural advantage in trust. from https://en.wikipedia.org/wiki/United_States_Postal_Savings_System
So government privileges for private banks doomed the first US Postal Bank.
Not that a drop in deposits should have been an excuse anyway since every American citizen should have a FUNDAMENTAL RIGHT to use her/his Nation's fiat with the same safety and convenience as the banks, credit unions, etc enjoy via a checking/debit account of his/her own at the Federal Reserve* and not be limited to grubby, unsafe, inconvenient physical fiat, aka "cash".
*Post Offices may make convenient branch locations but the accounts themselves should be at the Federal Reserve alongside those of banks, credit unions and other depository institutions.
Here's an ethical alternative to the problem of payday lenders gouging the poor:
1) Allow all US citizens to have checking/debit accounts at the Federal Reserve so, unlike a Post Office Bank, they can DIRECTLY use US Dollars in account form. These accounts shall be negative interest free up to $250,000 with free transactions up a nominal limit. See The Case for Central Bank Electronic Money and the Non-case for Central Bank Cryptocurrencies if you think this idea is "balmy".
2) Levy negative interest on all other private sector accounts and on US citizen account balances which exceed the $250,000 limit.
3) Use the proceeds from the negative interest to pay for the overhead for the US citizen accounts. This shouldn't be much since no lending is involved.
4) Use the remaining proceeds from the negative interest to pay a Citizen's Dividend equally into all US citizen accounts.
The above GIVES the poor fiat which should: 1) lower the demand for payday loans. 2) lower interest rates - especially if the emission of US sovereign debt is curtailed or eliminated (as Professor Bill Mitchell advocates) to deny the banks a risk-free alternative to private sector lending.
Between 1911 and 1967, the U.S. Postal Service offered savings accounts, but a drop in deposits led to their discontinuation. Kevin Wack - American Banker
ReplyDeleteThat's because, according to Wiki:
The system originally had a natural advantage over deposit-taking private banks because the deposits were always backed by "the full faith and credit of the United States Government." However, because the Federal Deposit Insurance Corporation gave the same guarantee to depositors in private banks, the Postal Savings System lost its natural advantage in trust. from https://en.wikipedia.org/wiki/United_States_Postal_Savings_System
So government privileges for private banks doomed the first US Postal Bank.
Not that a drop in deposits should have been an excuse anyway since every American citizen should have a FUNDAMENTAL RIGHT to use her/his Nation's fiat with the same safety and convenience as the banks, credit unions, etc enjoy via a checking/debit account of his/her own at the Federal Reserve* and not be limited to grubby, unsafe, inconvenient physical fiat, aka "cash".
*Post Offices may make convenient branch locations but the accounts themselves should be at the Federal Reserve alongside those of banks, credit unions and other depository institutions.
If everyone puts their munnie at the post office how will banks then have any munnie to lend out?? :p
ReplyDeleteHere's an ethical alternative to the problem of payday lenders gouging the poor:
ReplyDelete1) Allow all US citizens to have checking/debit accounts at the Federal Reserve so, unlike a Post Office Bank, they can DIRECTLY use US Dollars in account form. These accounts shall be negative interest free up to $250,000 with free transactions up a nominal limit. See The Case for Central Bank Electronic Money and the Non-case for Central Bank Cryptocurrencies if you think this idea is "balmy".
2) Levy negative interest on all other private sector accounts and on US citizen account balances which exceed the $250,000 limit.
3) Use the proceeds from the negative interest to pay for the overhead for the US citizen accounts. This shouldn't be much since no lending is involved.
4) Use the remaining proceeds from the negative interest to pay a Citizen's Dividend equally into all US citizen accounts.
The above GIVES the poor fiat which should:
1) lower the demand for payday loans.
2) lower interest rates - especially if the emission of US sovereign debt is curtailed or eliminated (as Professor Bill Mitchell advocates) to deny the banks a risk-free alternative to private sector lending.
Correction:
ReplyDelete"The above GIVES the poor fiat which should:" should instead be "The above GIVES the poor fiat and should:"