During pandemic, Fed should grant zero-interest loans to cities and states
The COVID-19 recession has thrown people’s lives into chaos, particularly in Black and Brown communities. We have seen massive losses of income, housing and food insecurity, and parents struggling to make distance learning work despite a lack of child care and proper technology. People who can’t work from home must choose between their health and safety and trying to keep the lights on.
Local, county, and state officials are scrambling to find solutions as 2021 budget deadlines approach.
One proposal recently has come to light as a quick and efficient way to address the crisis. The Federal Reserve could grant zero-interest loans to city, county and state governments, as proposed in a new report by the Action Center on Race and the Economy (ACRE). Together, the governments of Illinois, Chicago and Cook County could save nearly $3 billion a year.
A resolution supporting this proposal recently was introduced at a Chicago City Council meeting. A savings to Chicago of $1.1 billion annually from long-term, zero-interest loans could allow the city to pay for internet access for all CPS students and help 72,600 families avoid eviction by covering rent for a year.
The Federal Reserve already offers banks and private companies low-interest loans. The least they could do is act like the peoples’ bank that they’re supposed to be by extending these benefits to taxpayers. There’s no reason taxpayer money should be going into the pockets of Wall Street investors, who are prospering during the economic recession even as so many people are suffering.
The Federal Reserve should grant loans to cities and states across the country, to save us $160 billion collectively.
There is no one-stop solution to the growing COVID-19 crisis. But we should take this opportunity to help millions of people, particularly the Black and Brown families who have lost the most. Trading Wall Street profits for saving lives is a simple, straightforward opportunity — and the Federal Reserve should take it.
Ald. Rossana Rodriguez, Cook County Commissioner Brandon Johnson
and Illinois state Rep. Lakesia Collins