News Release

A “Critical-Care” Bailout for Main Street in the Face of COVID-19

ELLEN BROWN, ellen at publicbankinginstitute.org, @ellenhbrown
WALT MCREE, walt at publicbankinginstitute.org, @PublicBanksNow
Brown is founder and chair and McRee is senior advisor to the Public Banking Institute, which recently released an open letter to Congress: “A ‘Critical-Care’ Bailout for Main Street in the Face of COVID-19 — How Public Banks Can Reboot the Real Economy.”

In the letter, the Public Banking Institute details four immediate actions that will prevent financial catastrophe in our communities and set them up for future fiscal health:

1. “Put real money into the real economy. At least $1,200 per month to all U.S. adults as long as needed.

2. Put money in people’s hands now. Get relief funds to people immediately by restarting Post Office Savings Accounts to direct deposit relief funds and/or by using Treasury Direct accounts to direct deposit newly-issued Treasury dollar bills.

3. Get money to the states. States can get 0 percent loans by forming their own public banks.

4. Cancel debts held by the federal government, starting with student debts.” [Note: “Bank of North Dakota Announces Student Loan Relief Options” — background: “The How One State Escaped Wall Street’s Rule and Created a Banking System That’s 83 Percent Locally Owned.”]

They write: “These relief measures can be funded by tapping into the same money tree Congress and the Fed just used to fund a $4 trillion-plus bailout for Wall Street and Corporate America, as detailed below. States and municipalities can tap into the Fed’s 0 percent rates by setting up their own publicly-owned banks by emergency powers. These banks can provide the low-cost credit communities urgently need during this pandemic, granting 1 percent loans as Germany’s public bank KfW does, vs. the complex SBA programs charging 3.75 percent.”

Brown says: “The same Congress that has insisted we cannot afford a universal basic income, Medicare for All, free state college tuition, and other critically needed programs has suddenly discovered that it has unlimited funds to ‘do whatever it takes’ to rescue corporations and the stock market. Meanwhile the individuals, local governments, and local businesses suffering the devastating consequences of the shutdown have essentially been left out of this bailout. But relief for all is possible, if the central bank is run as a true public utility. The same sort of Treasury-owned Special Purpose Vehicle (SPV) set up in the CARES Act to bail out businesses and financial institutions can be used to bail out the people and states. The systems are already in place to issue relief funds immediately by direct deposit, and this can be done for as long as needed.”

Brown recently wrote two pieces “Was the Fed Just Nationalized?” and “Socialism at Its Finest After Fed’s Bazooka Fails” for her blog Web of Debt.