Throughout the final crisis, arguments were made that Wall Street companies needed to be rescued to save Main Street. Then a stable postal banking systemвЂ”a safe place for most peopleвЂ™s moneyвЂ”could be our best defense if preventing Main Street from falling into the flames along with Wall Street is indeed a national concern.
However some advocate for a public-private partnership with current commercial banking institutions, postal banking institutions could rather be a built-in little bit of a fresh monetary architecture insulating the general public and Main Street companies through the storms of high finance.
As an example, imagine the economy busts and individuals begin to lose their jobs. The Federal Reserve could directly credit postoffice reports, either with flat transfers, or ideally wages for federally funded jobs. This policy would inject cash into principal Street and support costs and wages.
And as it pleases if you donвЂ™t like that idea, as even conservative commentator Reihan Salam at The National Review has recognized, a strong postal banking system could eliminate the need for federal deposit insurance and create more room for the private financial sector to innovate. The case for bailing out Wall Street would lose steam as a corollary, if trauma to Main Street could be avoided via the postal banking system.