>So treat deposit accounts and instant payments as a utility and have the Fed hand them out to everyone.
This would be awesome, but it's never going to happen as the fed is the banks' way of controlling the monetary supply. It's their tool, deliberately not beholden to the populace.
I think you are confusing monetary policy with retail banking. Having the post office offer banking services (for example) has nothing to do with "the Fed"'s ability to enact monetary policy.
I was pointing out that retail banks effectively control monetary policy through the fed, and they use it to benefit themselves primarily.
It's their beast and they use it to serve themselves. If other people happen to be able to eat as a result, they're okay with that.
>Having the post office offer banking services (for example) has nothing to do with "the Fed"'s ability to enact monetary policy.
Banks literally create money and loan it out at interest. The fed providing accounts allowing that would directly compete with their business. It's a conflict of interest to serve the public in any way that a bank does, and since they control the fed, they'll use it to block such things.
Fed accounts allow for rapid stimulus payments directly into citizen deposit accounts, instead of the Rube Goldberg IRS payments dance we’re currently doing. Stimulus payments then become a batch job.
They already do a lot of passport issuance and the like, so probably wouldn’t be too much of a problem to expand if they did it gradually.
That said, they’re currently struggling to even deliver packages or letters under
the new leadership (around the time of the election I had multiple mailed checks go missing permanently, and a letter take a month+ to go within the state where it’s usually 3 days max), so maybe putting our hopes on them to save the economy through a massive new program is not a good idea?
Of course. Current organizational failings do cause fallout and long term damage to retention and motivation of key staff, along with reputational issues leading to difficulty getting new qualified staff.
Definitely not unsolvable - pointing out that if you want the USPS to be a happy, well run organization that can take on a massive expansion in scope, it would take awhile and have to fight against the current inertia. It isn’t a slam dunk right now.
Right, it would make more sense for the US Federal Government to just create or buy a separate bank for this purpose.
The British government owns two notable banks, the Bank of England of course (but for less than a century) and the National Savings & Investment Bank ("NS&I").
The Bank of England doesn't have retail services, once upon a time it offered some products like mortgages to permanent staff but this ceased because it is in a real sense self-dealing, and it's hard to explain to a foreign central bank why their $100M unsecured loan to the bank's Chief Executive, who is coincidentally also brother of the leader of their country is a scandal when the Bank of England is loaning the price of a mid-size home counties house to some mid-ranking employee. I mean, these are different things, but they aren't different enough to make the point, so that programme ended.
NS&I however offers numerous popular retail services for ordinary savers in the UK. It has some conventional savings accounts (obviously paying rather little interest these days), term bonds, some specialist UK products like ISAs, but it also has the "premium bond" which is effectively a not very good savings bond except instead of interest you win "prizes" from the pool of money that would have accrued as interest to all savers. The idea being this is exciting like gambling, but you can't lose (except in the sense that on average you'd make more money with a conventional bond of course).
These are very different activities, they possibly reward different management styles, certainly they would share few resources if they were a single entity.
The idea of using the US Post Office instead is good, because the Post Office already has actual branches all over the country, but it would need to staff up considerably to do this work, so having a separate government entity responsible for the actual bank, with the Post Office handling the front-end experience seems like a sound idea.
A number of countries have used postal services for banking with good success (especially early on). I’m decently familiar with Singapore’s, but have heard of others.
This would be awesome, but it's never going to happen as the fed is the banks' way of controlling the monetary supply. It's their tool, deliberately not beholden to the populace.
I wish you good luck anyway.