Wednesday, January 29, 2014

"The Post Office Should Just Become a Bank"

The postal service, with public trust earned over generations and 35,000 outlets in the best real estate in practically every city in America (in fact, the report notes, 59 percent of all post offices are in “bank deserts” with only one bank branch or less), is well-positioned to deliver simple financial services. In fact, it did for over 50 years. Begun in 1911, the Postal Savings System allowed Americans to deposit cash with certain branch post offices, at 2 percent interest.
The banks in this country are not free market institutions, anyway. The majority of their capital (deposits) is government subsidized. Through the miracle of fractional reserve banking they are also allowed to make fraudulent promises to repay to their depositors.

If lending is going to be a creature of the state, you may as well split the huge rents between customers and the government. The P.O. bank idea is sound.

Of course, the ideal, honest solution is to get the government out of lending entirely. If you want to make 30 year loans you really ought to have a committed source of funds for that time period. 

1 comment:

eah said...

In many post offices in Germany you can do your banking as well.